Xiaomi’s smartphone sales are falling

Xiaomi Corp said Wednesday that gross profit margin growth took a hit after it began clearing high inventories in India in the third quarter ended September 30, coinciding with Diwali promotions and discounts.

Sales of smartphones, which account for 60% of total sales worldwide, fell 11.1% year over year, dragged down by low margins in India and sluggish growth in overseas markets. “As we start Diwali, gross margin in India tends to be much lower in Q3 than Q2,” said Alain Lam, vice president and chief financial officer of Xiaomi Corp, during its third-quarter earnings conference call.

The decline in gross profit margin growth from India was due to more sales, promotions and partnerships, said Tarun Pathak, research director of Counterpoint Research. Our office

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