This morning, Xiaomi Company held a press conference for the Global Offering at the Four Seasons Hotel in Hong Kong. Xiaomi founder, Chairman Lei Jun, and co-founders Lin Bin, Li Wanqiang, Wang Chuan, Hong Feng, Liu De, CFO Zhou Suixian and other senior executives attended the event. Press conference.
At the meeting, some media asked Xiaomi how more than 70% of its revenue last year came from hardware. How would the future increase the gross profit margin and other business income? In this regard, Lei Jun said that the gross profit margin of Xiaomi’s hardware in last year’s financial report was 8.7%. In his opinion, this is Xiaomi's most outstanding place.
Because millet passes through the e-commerce and new retail platforms, a portion of this cost gross margin is also obtained by retail sales. 'This in turn shows that millet's pricing is extremely kind, which is a very different business strategy for Xiaomi. We will always maintain a very low gross profit, and a very low hardware net profit to ensure that Xiaomi’s hardware products are sufficiently competitive in the market. ' Lei Jun said.
Such a low gross profit rate does not mean that Xiaomi does not make money. According to the data disclosed in the prospectus, millet last year had 70% of mobile phones, 20% of IoT and consumer goods, and the Internet service was close to 10%, mainly the income of these three sectors. Last year, the net rate was 4.7%. Lei Jun said that in addition to hardware, profits also come from internet service revenue, eco-chain equity income and so on. 'So I think millet's profit margin is in hardware, we will not exceed 5% in the future, about 2 % to 3%. But last year may be much lower than 2%, 3%. So this is our long-term strategy.
The second issue is IoT. Xiaomi connected more than 100 million IoT devices. It has become the world's largest consumer IoT platform. So Xiaomi's mobile phone revenue has dropped to 70% of its revenue last year. IoT devices and consumer goods have already been Over 20%. The growth rate of this sector is very fast, so we believe that after a while, maybe eight years, ten years later, I think IoT equipment will account for 40% of Xiaomi’s income. ' Lei Jun said.
