Tensions between Russia and Ukraine continue. With the ongoing war entering its first year, the inability to make any progress on a ceasefire or peace has negatively affected both countries. With Ukraine nearly devastated by war, Russia is isolating itself from the rest of the world and many global companies, leading to an economic downturn. However, this situation does not only concern countries; neutrals and multinational companies also suffer significant losses. Ukraine recently accused Xiaomi of being a “sponsor of international war”.

Xiaomi unexpectedly found itself in the middle of the ongoing conflict between Russia and Ukraine, and serious charges were brought against the company. The National Anti-Corruption Agency (NACP) reported that Xiaomi has been included in the list of “International War Sponsors”. The Ukrainian government cited two main reasons for this decision.

Officials say that Xiaomi continues to be active in the Russian market and has been the leading smartphone brand in the country since the beginning of the conflict between Russia and Ukraine. Although Xiaomi has not run marketing campaigns since spring 2022, the company still has a significant market share in Russia.

Xiaomi has dominated online sales in Russia since 2018 with a large network of authorized retail outlets. The latest data from NACP showed that Xiaomi’s market share in Russia doubled in 2022, with shipments increasing by 39% in the third quarter compared to the previous quarter. Last year, Xiaomi’s revenue in Russia reached a staggering $202 million.

A Ukrainian press release stated that the decision to include Xiaomi in the list of international war sponsors was based on the company’s continued operation in Russia after the “mass occupation”. Despite these circumstances, Xiaomi remains the leading smartphone brand in what the Ukrainian government has dubbed a “terrorist state”.

Xiaomi has consistently ranked first in terms of sales in Russian online stores since 2018 and supports a large network of offline official authorized retailers nationwide. In 2022, Xiaomi doubled its market share in Russia, strengthening its position as the leading national smartphone brand. As of July 2022, Xiaomi and its sub-brand POCO ranked first in terms of revenue, accounting for 42% of the smartphone sales market in Russia.

Official data shows that in 2021, Xiaomi’s Russian subsidiary earned $202 million in revenue. Ukraine’s National Anti-Corruption Bureau claims that taxes paid from this important income were used to support the Russian military and “finance the war against Ukraine”.

Currently, Xiaomi is actively rehiring its Russian office and has announced the official launch of its flagship smartphones, which indicates the company’s intention to fully resume its activities in Russia. As a result, the Ukrainian government accuses Xiaomi of sponsoring a terrorist state’s military aggression and believes the company will suffer the reputational and legal consequences of its actions.

Currently, the National Anti-Corruption Bureau of Ukraine has included 21 companies in its list of international sponsors of the war. The inclusion of Xiaomi on this list came as a shock to many and highlights the far-reaching consequences of the war between Russia and Ukraine for the global tech industry. Source