Xiaomi’s Barra pours cold water on IPO speculation
A high-ranking Xiaomi executive poured cold water on speculation that the Chinese smartphone star is considering an initial public offering (IPO), telling CNBC that there are no plans for the "foreseeable future."
"We raised a significant round late last year. [Also,] we're a profitable company, so we're really not making any plans at this time to go public," Hugo Barra, vice president of Xiaomi's global operations, said on Thursday.
Rumors of a possible flotation have been swirling since last year. In November, the South China Morning Post reported that the Beijing-based technology company is aiming for an IPO as early as 2015, citing two people close to the company. Several reports of a similar nature followed in subsequent months.
However, Barra says the focus remains on growing the company, which was last valued at more than $45 billion, making it one of the world's most valuable technology start-ups.
The growth, he says, will be achieved organically, with no acquisition plans on the cards.
"We have a very unique way of doing things. If we were to acquire one of these companies, I think we would have a hard time integrating them into our culture and our way of doing things. We're softer guys, we try things, we do things very quickly, we beta-test a lot, both on the hardware and software front," he said.
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Xiaomi's share in the global smartphone market stood at 5 percent in the second quarter, flat from the year earlier and trailing Huawei, Apple and Samsung, which each held an 8.2 percent, 12.8 percent and 20.0 percent share, respectively, according to Counterpoint Research.
India, Xiaomi biggest market outside of China, presents one of the most exciting growth opportunities, he said.
In addition, "Indonesia is also growing very, very steadily. We also launched in Brazil, that's also going extremely well. So we'll keep adding markets, focused primarily on these larger markets where we think there's better opportunity for us," Barra said.
Brazil, where Xiaomi both manufactures and sells phones, marks the five-year-old company's first foray outside of Asia. It launched in the Latin American market earlier this month.
Outlook for China operations
In China, where competition is cut throat and smartphone demand is coming off the boil, Barra says he believes the company can still retain an edge with consumers in its home market.
"We've just pioneered a crowd-funding modelling in China whereby our fans or users can decide what products they want us to make, bid on them buy on them ahead of time and then we'll go ahead and manufacture," Barra said.
When asked whether the business would take a hit from the recent stock market turmoil, Barra said he didn't foresee any difficulties.
"The smartphone market is one of these few segments of any industry that's sort immune to any sort of market situation. We don't see any issues with that our business is still growing very healthily," he said.