Chinese smartphone maker Xiaomi was the youngest company on the Fortune Global 500 list in 2019, placing 468th in the world with 2018 revenue of $26.4 billion, but is facing slowing smartphone sales and sinking share prices since its 2018 initial public offering (IPO).
Why it matters: It took Xiaomi nine years to grow from a startup to one of the world’s largest corporations by revenue, but since its July 2018 listing in Hong Kong, its shares have fallen more than 45.8% and market cap has shrunk by HK$162 billion (around $20.7 billion). Its reputation has faltered from one of China’s rising technology stars that aimed for a $100 billion IPO to a hardware manufacturer facing slowing demand for its main product as it struggles to pivot to other businesses.
- Xiaomi’s share prices have fallen as the global market for smartphones—its core business—slumps. Global shipments of mobile phones are expected to decline by 68 million units, or 3.8%, in 2019 compared with a year ago, according to a report by market research firm Gartner on July 17.
Details: Xiaomi joined a number of other Chinese tech companies on the Fortune list, on which Shenzhen-based telecom equipment giant Huawei was ranked 61st, e-commerce giant Alibaba ranked 182nd, and social media and gaming giant Tencent 237th in the world by revenue.
- The number of companies on the list based in the Greater China region, which includes Chinese mainland, Hong Kong, and Taiwan, reached a record 129. Chinese companies exceeded the number of US companies, 121, for the first time since the debut of the Global 500 in 1990.
Context: Though the smartphone segment comprises the lion’s share of its revenue, Xiaomi has been expanding into other businesses to shore up growth and broaden its profile as an internet company, not just smartphone maker, for a higher valuation.
- The company said in January it would invest more than RMB 10 billion (around $1.45 billion) into the artificial intelligence of things, or AIoT, over the next five years. The term refers to embedding AI applications into infrastructure components which are linked by an internet of things (IoT) network.