Xiaomi secures $1 billion loan to build more stores and push its overseas expansion

It's likely that a chunk of the loan would go to opening some of the planned 100 retail stores in India, but Xiaomi might also spend on its overseas expansion.

It's likely that a chunk of the loan would go to opening some of the planned 100 retail stores in India, but Xiaomi might also spend on its overseas expansion.


After Xiaomi reported its best-ever quarter in the April-June period this year, the company announced this Friday that it has negotiated a $1 billion loan from a syndicate of 18 banks worldwide. The company is allegedly looking to strengthen its push in Asia and move forward with plans overseas, and that’s pretty much everything we know about where this $1 billion will go.

The deal was coordinated by Deutsche Bank and Morgan Stanley, and involved banks from Europe, India, China, Hong Kong and the Middle East.

Xiaomi briefly became the most valuable startup in the world in 2014, but is still to launch a large-scale expansion outside of Asia. Nonetheless, in the span of a few years, Xiaomi has managed to open 123 stores in China and saw a 328% year-on-year jump in revenues in India in this last quarter, where it plans to open up to 100 stores over the next two years.

Even though 2016 saw below-target sales, which the company even declined to give a full breakdown of, 2017 shapes to be a much stronger period at Xiaomi, as it climbed to third place in smartphone sales in China in Q2.

Xiaomi received almost 3,000 patent licenses in 2016 alone and recently revealed its own Mi AI Speaker, meaning that the company is also actively working to build on its product range. From action cameras to smartphones, to TVs, Xiaomi’s gadgets have already won the hearts of many and have enjoyed considerable popularity in Asia.

Despite that it’s not entirely clear how this $1 billion loan will be spent, we reckon that a part of it may go into facilitating the company’s expansion to western markets. Xiaomi has long gotten rid of the image of a custom Android software developer and now produces noteworthy smartphones, such as its Mi 6 flagship, that could well compete with alternative devices in the west. The company has been rather quiet about its plans to sell its products in America, but we have heard opinions that it does envisage such a move. So, the recent $1 billion loan may mean that Xiaomi’s out-of-Asia evolution is now a question of ‘when’, rather than ‘if’.

source: Reuters

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5 Comments

1. jacky899

Posts: 323; Member since: May 16, 2017

They need to first come up with a killer flagship that everyone wants if they think they can even have a slight chance in succeeding in the US. Otherwise it's a waste of investment. Hardly anyone here will buy their phones.

3. trojan_horse

Posts: 5868; Member since: May 06, 2016

The loan is for expanding in Asia, not in the US.

2. GTRagnarok

Posts: 48; Member since: Aug 22, 2014

A small loan of $1 billion

4. Tabby_Tiger

Posts: 304; Member since: Jan 23, 2017

Expand and get sued by Apple and other big players.

5. yoghibawono

Posts: 240; Member since: May 04, 2016

Big players like Microsoft & Nokia will safe Xiaomi. Since both of them have licensing agreement. Well except if Apple started to play the 'rounded corners' again.

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