Xiaomi's revenue from smartphones falls

Xiaomi Corp said on Wednesday that growth in gross profit margins took a hit after it embarked on clearing high inventories in India during the third quarter ended September 30, which coincided with Diwali promotions and discounts.

Revenue from smartphones, which makes up 60% of total sales globally, fell 11.1% on-year, dragged down by low margins in India and flat growth in overseas markets. "As we are launching into Diwali, the gross margin in India in the third quarter tends to be much lower than the second quarter," said Alain Lam, vice-president and chief financial officer, Xiaomi Corp during its third quarter earnings call.

The decline in gross profit margin growth from India happened on account of more sell-ins, promotions and partnerships, said Tarun Pathak, research director, Counterpoint Research. Our Bureau