On September 7, it was reported that Counterpoint Research, an international market research organization, recently published a report on the revenue structure of Xiaomi Company.

The report said that although Xiaomi's Internet services accounted for less than 10% of the company's quarterly revenue since its listing in 2018, its gross profit margin and profit accounted for a considerable proportion. Its latest data showed that the average 42.74% of Xiaomi's gross profit was contributed by Internet services. In the second quarter of 2021, the gross profit margin of Internet services reached 74.1%, This is far higher than 11.8% of the mobile phone sector and 18.4% of the company's overall gross margin.

Xiaomi's Internet services mainly include mobile game operations, e-commerce, financial technology, advertising and other projects. At present, more than half of its revenue comes from advertising (accounting for 54% in 2020).

However, the growth rate of Xiaomi's Internet service revenue slowed to 19.1% in the second quarter of 2021, which is far less than the growth rate of mobile phone (86.8%) and IoT (35.9%) businesses. At the same time, the average revenue per user (ARPU) has also declined in recent quarters, which shows that the flow liquidity efficiency from mobile phones is declining.

The report also said that the increasingly strict privacy regulations around the world and users' complaints about advertising have challenged Xiaomi's current model of relying on advertising profits.

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