Xiaomi secures $1B loan to expand its international presence and offline retail footprint
Chinese smartphone maker Xiaomi has secured a $1 billion loan in order to develop its international focus and build out its offline sales presence.
The company revealed today that it has secured a three-year syndicated loan agreement from 18 banks across Europe, Middle East, India, China, Hong Kong and Taiwan. Deutsche Bank and Morgan Stanley served as joint global coordinator, with Bank of China (Hong Kong) Limited, Deutsche Bank AG, and Wing Lung Bank.
The company previously raised a loan in 2014, months before it raised a $1 billion venture capital round at a valuation of $45 billion. There’s no suggestion that it is about to raise money from investors now, however.
The loan is aimed at further Xiaomi’s key focuses as put forward by CEO Lei Jun this year, they including growing its international footprint — Xiaomi now sells, or has sales partners, in over 20 countries — and building out an offline presence.
The company has opened 149 Mi Home stores in China, while it has opened its first in India, where it hopes to reach 100 stores over the next two years. The stores are aimed to fuse the online and offline commerce worlds to enable customers to get the best of both, for example in-store picks or ordering after trying.
On the international front, Xiaomi didn’t specify which new markets it is targeting, but did it reference a recent patent deal with Nokia that creates “a strong platform” for global expansions.
Xiaomi’s business has experienced a resurgence this year following two difficult years in which its previously impressive sales growth slowed. This year, it declined to give full numbers for 2016, marking its first non-reveal in its history, following an apparently disappointing year as competitors like Huawei, Oppo and Vivo released competitive devices and developed wide offline sales networks. Issues began appearing when Xiaomi missed its sales target for 2015, selling “over 70 million” devices but not the 80 million that Lei had previously forecast.
The past quarter, however, Xiaomi shipped an impressive 23.16 million smartphones, up 70 percent on the previous quarter. In China it leapfrogged Apple to take third place with 15 million devices sold and show it can compete on home soil.