Ukraine's National Agency on Corruption Prevention (NACP) has labeled Chinese smartphone manufacturer Xiaomi, its founder and CEO Lei Jun, and 12 other executives as "international war sponsors." The NACP accuses the Beijing-based company of continuing business in Russia despite its military actions in Ukraine.
According to the NACP's statement on Thursday, "The reason for inclusion in the list ... was that the company not only continued its work in the Russian Federation after the full-scale invasion [of Ukraine], but is still the leader in smartphone sales in the terrorist state." The NACP added that "Xiaomi Corp is sponsoring the military aggression of a terrorist state and must bear both the reputational and legal consequences of its actions."
On Friday, Xiaomi denied supporting any war activities and asserted that it follows all laws and regulations in every jurisdiction where it operates. In response to a Post inquiry, the company stated, "Xiaomi is a consumer electronics company, offering products solely for civilian and commercial use. We believe that every consumer in the world has the right to access communication tools and information on the internet ... Our mission is to let everyone in the world enjoy a better life through innovative technologies."
Following President Vladimir Putin's invasion of Ukraine in February 2022, numerous global brands withdrew from Russia. Both Apple and Samsung Electronics ceased selling smartphones and other gadgets in Russia a week later. This exodus has created a significant void in the Russian market for various consumer products. As the ruble plummeted, Russian shoppers rushed to acquire essential electronic devices, leading to increased sales of Chinese smartphones from Huawei Technologies Co, Oppo, and Vivo.
By the end of last year, Xiaomi had become Russia's top smartphone vendor, commanding over half the market, as reported by CNN, citing data from Counterpoint Research. In contrast, Xiaomi's market share in the third quarter of 2021 was 26%, trailing Samsung's 34%, according to market research firm IDC.
Xiaomi's inclusion raises the number of companies on Ukraine's war sponsor list to 22, including state-owned builder China State Construction Engineering Corp and US consumer goods giant Procter & Gamble. Presently, Xiaomi is the only Chinese smartphone vendor on the list.
The NACP website states that entities on the list will be entered in the World-Check database operated by America-British data provider Refinitiv, assisting global financial institutions in tracking high-risk individuals and organizations.
While numerous Western tech firms have implemented product export restrictions to Russia, Chinese counterparts have primarily remained silent, partly due to Beijing's opposition to US-led sanctions targeting Moscow.
Nevertheless, prominent Chinese brands such as Xiaomi must consider the risk of operating in Russia and expanding sales in Western Europe, where many oppose the invasion of Ukraine, according to Ivan Lam, an analyst at Counterpoint Research, in an interview with the Post last year.
Despite anti-war sentiment in Europe, Xiaomi's market share is expected to continue growing, bolstered by its robust online sales channel, as per a research note by Fitch Rating on Thursday.
Xiaomi was the world's third-largest smartphone vendor last year, with a market share of just under 13%, according to IDC.
