Thank you and welcome to 2022 Fourth Quarter and Annual Results Announcement Conference Call. Today's conference is being recorded. If you have any objections, you may disconnect at this time. If you have any questions and would like to raise during the Q&A session, please press star one on your telephone keypad to register your question. Should you wish to cancel your question, please press star two. I'd like to hand the conference over to your host today, Ms. Anita Chen, Head of Investor Relations and Corporate Finance. Please go ahead, Ms. Chen.
Good evening, ladies and gentlemen. Welcome to the investor conference call hosted by Xiaomi Corporation regarding the company's 2022 fourth quarter and annual results. Before we start the call, we would like to remind you that this call may include forward-looking statements, which are underlined by a number of risks and uncertainties and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of Xiaomi.
This presentation also contains some unaudited, non-IFRS financial measures that should be considered in addition to, but not as a substitute for, the company's financial prepared in accordance with IFRS. Joining us on the call, we have Mr. Lu Weibing, Partner and President of Xiaomi Corporation and President of International Business Department, and Mr. Alain Lam, Vice President and CFO of Xiaomi Corporation, Chairman of Airstar Digital Technology. To start, Mr. Lu will share recent strategic and business updates of the company. Thereafter, Mr. Lam will review the financial performance of the fourth quarter and the full year 2022. Following that, we'll move on to the Q&A session.
Good evening, everyone. My name is Lu Weibing. Very quickly, I'd like to walk you over our performance for 2022 Q4 and for the whole year. It will include the following content. The first is to look at the macro environment of 2022 and an overview of 2022 performance and business. In addition, I will also be focusing on the few business sectors that you are interested in. In addition, we will also talk about our business upgrade and future outlook. As we know, 2022 is a year full of challenge. All industries were impacted by macroeconomic headwinds, including rising global inflation, foreign exchange fluctuation, complex geopolitical environments, and global COVID-19 resurgence, which severely weakened consumer demand.
Particularly, the smartphone industry experienced a fast reversal in supply and demand, with chips inventory shifting from shortage to oversupply, resulting in excess inventory across the industry and intensified market competition. As a result, the global smartphone market declined by 12% year-on-year in 2022 to below 1.2 billion units, a record low in the past nine years. Similarly, Mainland China smartphone market dropped by 14% year-on-year in 2022 to below 300 million units, a record low in the last decade. Nevertheless, each of our business segments remained resilient. In 2022, our total revenue amounted to RMB 280 billion, and our adjusted net profit was RMB 8.5 billion, which included RMB 3.1 billion in expenses related to our smart EV and other new initiatives.
Looking beyond our financial performances, I'd like to share with you the fundamental changes and progress we have made, which may well be your top concerns. Firstly, we have made notable progress with our premiumization strategy. After three years of explorations fraught with many setbacks, we stepped up from the lessons learned and created our own methodology. In 2022, our premiumization strategy has moved from theory to practice.
We upgraded our product concept with a priority from smartphone specifications to user experience and focused on deepening hardware and software integration, aiming for providing premium smartphones with the best of technology and user experience. Meanwhile, we also updated our mobile imaging strategy through strategic cooperation with the Leica, embedding our products with imaging technology that would truly achieve letting the heart see what is invisible to the eye. These strategic upgrades and initiatives began to bear fruits.
Since the second half of 2022, we launched three consecutive premium products, including Xiaomi 12S Ultra in July, Xiaomi MIX Fold 2 in August, and a Xiaomi 13 series in December. Each generated strong word-of-mouth among our premium users, as evidenced by above 98% positive review rate on JD.com in one month after product launch. In 2022, our brand loyalty exceeded 50%, ranking number one among Android smartphone brands. Thanks to our enhanced product capabilities, our market position has also improved. Notably, in the fourth quarter of 2022, our smartphone shipments in the region of RMB 3,000-RMB 4,000 price segment ranked number one in Mainland China.
According to the latest data in January 2023, our smartphone shipments in the CNY 4,000- CNY 5,000 price segment also ranked number one among Android smartphones in Mainland China with a market share of 27%. We believe that it is more vital than ever to invest in our long-term capabilities, especially in times of challenges. In 2022, our R&D expenses reached CNY 16 billion, increasing at a compound annual growth rate (CAGR) of over 38% from 2017 to 2022. Our R&D expenses are expected to exceed CNY 20 billion in 2023 and to expected to exceed CNY 100 billion during 2022 to 2026. As of December 31, 2022, our R&D personnel accounted for nearly 50% of our total employees. Meanwhile, we have obtained more than 30,000 granted patents worldwide, covering more than 60 countries and regions.
Our latest self-developed pioneering products and technologies include Xiaomi Wireless AR Glass Discovery Edition , and solid-state battery technologies, et cetera. Thirdly, I'd like to share with you in terms of our steady progress in the globalization strategy. Against the backdrop of extreme uncertainties in 2022, our global smartphone shipments maintained its number 3 ranking with a market share of 13%, thanks to our solid global business establishments and fundamental capabilities. It is noteworthy that we remained among the top 3 in Europe in 2022 with a market share of 21%. Particularly, we maintained our number 1 position in Spain with a market share of 33% in 2022, whilst ranking number 2 in Italy and number 3 in both France and Germany.
Dominated by carriers, the entry barrier in Europe is considerably high, with the top three players forming a virtually impregnable fortress, we managed to enter the European market by establishing in-depth partnership with leading carriers. This has laid a solid foundation for our business going forward. We expanded into the global market since 2014, with overseas market contributing 75% of our total smartphone shipments in 2022. Going forward, we will continue to fortify our fundamental capabilities in overseas markets, focusing on prudent operations and strengthen localization strategy in key overseas markets. Meanwhile, we will continue to advance our brand premiumization strategy in key overseas markets to build a secure and efficient global operating platform. As such, we will bring our amazing products to let everyone in the world enjoy a better life through innovative technology.
Fourthly, I'd like to share with you on some of the updates regarding our new retail strategy in Mainland China. Despite the offline foot traffic and sales was deeply impacted by COVID-19's resurgences throughout 2022, the GMV of our offline channels continued to grow. The average single store GMV per month, we can see that it is actually improving, and we can see in January and February in 2023, the GMV increased by over 30% compared to the fourth quarter of 2022. This is quite an achievement. In 2022, I have laid a solid foundation and resisted the challenges and difficulties that we faced. Notably, over 50% of our Xiaomi 13 series is sold via offline retail stores by end of February 2023. You can see that the more expensive the products are, and the more contribution they would make.
For 2022, what we have done is that we have taken a series of measures to improve efficiencies. We strengthen our approach to attract and cultivate talent, training new staff to become experienced store managers and masters of the different categories to improve our professionalism. We have done this work very well in 2022. Secondly, we worked closely with the three major carriers in Mainland China, generating significant profit to Mi Home and our business partners. They have contributed to our partner business greatly. Lastly is the integration of our online and offline business, contributing to over 20% of Mi Home's online orders in the Q4 of 2022. This is my briefing on our four areas of work in the above sectors. In the meantime, we have also done some upgrading for management.
Since our IPO in 2018, we have grown from an early entrepreneurial team to a young, highly motivated professional team of leaders. Our whole tier of talent have been completed, and therefore navigating the market headwinds in 2022, we have done a series of internal reflections on our business. In early 2023, we set up two key committees on group governance. One is our group business operation committee, responsible for overall management of business strategy, planning, budget execution, daily business management. The other is our group human resources committee, they will facilitate more professional practices of human resources strategy and strengthen the synergies between human resources and our business divisions. This is a giant step forward in our professional group governance.
It will significantly help improve the quality and efficiency of corresponding governance decisions whilst facilitating the rapid response and command for business as well as the long-term construction of the system. Looking ahead to 2023 as the macroeconomic environment and the consumer electronics market are showing signs of recovery along with continued risk and challenges, it will take time for a full market recovery to materialize. Given the current environment, for the first time, we are undertaking a key corporate strategy with a dual emphasis on scale and profitability. We will focus on elevating internal operating efficiency whilst improving profitability with the detailed measures. We will capture the positive trends in 2023, including potential exchange rate stabilization and largely normalize the inventory level to reinforce risk management and maintain prudent operation. We are cautiously optimistic about the market in 2023.
We remain confident in the company and our long-term strategy. 2022 witnessed a comprehensive transformation of our fundamental capabilities. It will take time to translate business strategy to sustainable performance. I genuinely hope that our investors, business partners, and friends could maintain patience and confidence with us as the fruits of long-term thinking will reveal themselves when we keep doing the right thing, and the rest time will tell. Thank you very much.
This is my brief introduction. Just to follow on, Mr. Lu, and I would also like to thank all our investors and analysts for participating in our Q4 as well as our annual result announcement telephone call. As Mr. Lu has mentioned, 2022 was a year full of challenges. Global economy and industry development was impacted by a variety of factors. Despite that, each of our business segments remained solid. In 2022, our smartphone revenue was CNY 167.2 billion, accounting for 60% of total revenue. Global smartphone shipments declined by 12% year-on-year in 2022 to a record low since 2014.
However, leveraging our global scale and diversified footprints, the fundamental of our smartphone business remained steady. Notably, our global smartphone shipment was 150 million units in 2022, and we have maintained the number three position globally for second consecutive years. We rank among the top three in 54 countries and regions and among the top five in 69 countries and regions globally. We also led the market as the top three players in key markets, including Europe, Latin America, Southeast Asia and the Middle East. As Mr. Lu mentioned earlier, our premiumization strategy made remarkable progress.
In 2022, our global smartphone ASP hit a record high of CNY 1,111. In Mainland China, although the premium smartphone market priced above CNY 3,000 dropped by 13% year-over-year in the fourth quarter of 2022, our premium smartphone sold increased by 35% year-over-year. In 2022, revenue from our IoT and lifestyle products was CNY 79.8 billion, accounting for 28% of total revenue. As of December 31st, 2022, the number of connected IoT devices on our AIoT platform reached 590 million, up 36% year-over-year. In 2022, some of our key IoT product categories outperformed the market. During the year, our global smart TV shipments reached 12.4 million units, up 0.6% year-over-year, ranking among the top five globally.
We achieved breakthroughs in both the quantity and the quality of our smart large home appliances, including air conditioners, refrigerators and washing machines. Its revenue in 2022 rose over 40% year-on-year. In addition, our tablets gained tremendous popularity in the market. In 2022, our tablet shipments in Mainland China increased by more than 160% year-on-year, ranking top three. In 2022, our internet services remained resilient with full year revenue of RMB 28.3 billion, accounting for 10% of our total revenue and achieving year-on-year growth against the macro backdrop. Our global and Mainland China MIUI MAU both reached another record highs. In December 2022, our global MIUI MAU reached 582 million, whilst our MIUI MAU in Mainland China reached 144 million.
In 2022, we added 73.3 million global MIUI MAU, including 13.8 million in Mainland China. In 2022, despite the challenges prevailed in advertising and gaming markets and our advertising and gaming businesses achieved a steady growth. Notably, our gaming revenue achieved a year-over-year growth for six consecutive quarters and continued solid growth trajectory. It is noteworthy that our overseas internet services have also achieved a robust growth with a full year revenue of RMB 6.8 billion, up 35% year-over-year. In the fourth quarter of 2022, our overseas internet business revenue accounted for 26.1% of our total internet services revenue, setting a new record. In addition our years of continuous effort in TV internet services was starting to bear fruit.
In December 2022, our global TV MAU exceeded 58 million, including our TV paid subscribers of 6 million in 2022. Our TV value-added service revenue also increased by over 25% year-over-year. Very quickly to look at our gross margin. In 2022, our overall gross profit margin was 17%, which is above our previous five-year average of 15.2%. Looking at it from different business sectors, our smartphone gross margin was 9% in 2022, primarily due to our enhanced promotional efforts and channel inventory clearance from the second quarter of 2022, as well as a negative impact from US dollar appreciation and the increased inventory impairment provision. However, our smartphone gross margin in 2022 still outperformed our previous five-year average of 8.6% and maintained a healthy level.
Last November, we adjusted the after-sales service policy for a certain series of our smartphones, resulting in one-time charge of approximate RMB 700 million. Excluding this one-time impact, our smartphone gross profit margin would be around 9.4% in 2022, and our total gross margin would be around 17.2%. Our IoT and lifestyle products gross margin reached a new annual high at 14.4% in 2022, up 1.4 percentage points year-on-year, mainly due to the improvement in gross profit margin of smart TVs, thanks to the decreased price of key components as well as that of smart large home appliances. In 2022, our Internet services gross profit margin was 71.8%.
Looking at our total operating expenses in 2022, this was CNY 42.5 billion, up 9.2% year-on-year, accounting for 15.2% of total revenue. This is mainly due to our continuous investment in R&D. In 2022, our R&D expenses reached CNY 16 billion, up by 21.7% year-on-year. This is mainly because of our R&D expenses increase related to smart EV and other new initiatives. By end of last year, our R&D personnel's amount accounted for nearly 50% of our total employees. Our selling and marketing expenses were CNY 21.3 billion in 2022, up slightly by 1.6% year-on-year. Thanks to our tight control of marketing expenses whilst ramping up investment in brand building.
We continue to control operating expenses, which began to bear fruits in the fourth quarter of 2022. Excluding the expenses related to our smart EV and other new initiatives, our total operating expenses declined year-on-year. Overall speaking, our adjusted net profit was RMB 8.5 billion. In terms of the expenses related to smart EV and other new initiatives was at RMB 3.1 billion. In Q4 of 2022, our adjusted net profit was RMB 1.5 billion. Mr. Lu also mentioned that in terms of our smart EV and other new initiatives was RMB 1.2 billion. Because of the one-time charge of the approximately RMB 700 million resulting from an adjustment of the after-sales service policy for a certain series of our smartphones to improve the customers' after-sales experience in November 2022.
We continue to maintain our strong cash position. In the fourth quarter of 2022, our total inventory was RMB 50.4 billion, decreased by 3.7% year-over-year and 4.8% Q on Q. Our self-owned and channel inventories both declined steadily. As our inventory clearance went smoothly in Mainland China, India, overseas market, our inventory has reduced to a manageable level currently. In addition, in order to create long-term value for our investors and shareholders, in 2022, we have repurchased a cumulative of 235 million shares in 2022, totaling HKD 2.8 billion. We consistently advance our ESG efforts as a participant of the UN Global Compact. We support the Sustainable Development Goals established by the UN.
We attach great importance to integrating sustainability objectives into our practices that align with our business and the industry. Most recently, we collaborated with external carbon data verifications and certification organization to conduct our first life cycle assessment carbon footprint analysis in February 2023. The life cycle carbon footprint of our latest premium smartphone, Xiaomi 13 Pro overseas version is 62.8 kilograms of carbon dioxide equivalent. Our implementation of LCA carbon footprint management system marked a critical step towards our sustainability objectives and underscores our commitment to developing eco-friendly products that benefit both consumers and the planet. Looking ahead to 2023, as Mr. Lu just mentioned, for the first time, we are undertaking a key corporate strategy with a dual emphasis on scale and profitability. We will optimize our internal management structure, step up in expense control and operating efficiency.
Meanwhile, against the backdrop of the complex global macro and geopolitical environment as well as the sluggish demand from the consumers. We will continue to prioritize prudent operations whilst improving our risk management capabilities. Last but not least, more so than any other time, in times of challenges, it is vital to invest in our long-term capabilities to lay the foundation for high quality, sustainable growth. We would like to thank all our investors, analysts, and our business partners for your long-term trust and support for Xiaomi. That concludes our prepared remarks from myself and Mr. Lu. We're now ready for questions.
Thank you, Alain. We now will go into the Q&A session. Please limit your questions to a maximum of two so that we could allow more investors to ask questions. Thank you. We now start the Q&A session. To register your question, please press star followed by one on your telephone keypad. Should you wish to cancel your question, please press star one. Our first question comes from Andy from Morgan Stanley. Please go ahead, Andy.
Thank you. I would like to thank Mr. Lu and Alain for your remarks. My question is in relation to smartphone business. We can see that in China right now we see a lot of different new products, including flagship phones. Will this actually put pressure on your domestic business? Just now we have heard from Alain and Mr. Lu, your focus on this year would be on the smartphone. Second, in terms of investors, in terms of overseas sales and the visibility is actually quite low. Could we please ask our two leaders to tell us about the current inventory level for the overseas market?
Okay, thank you. The first question with respect to the new competitive products, actually you can see that, first, all the brands are quite aggressive. Secondly, in terms of their in terms of their layout and their plans for launching their products, they have also been very aggressive. I think that in the short term, we might face some pressure, but looking at the long term, I don't really think that this will cause a long-term issue. Looking at Xiaomi, looking at our Xiaomi 13 series. We believe that we are selling very well, so we're not very worried about competition. Your second question with respect to overseas market.
For overseas market in the recent two months, we are not really yet seeing that the market has recovered. For us, I think that it will take some time for the market to recover. I think that in terms of the demand, it is not yet recovered. However, for Xiaomi, we think that our inventory has improved quite a lot. Just now, Alain has also introduced and mentioned some specific figures. We can also see that inventory clearance was our priority job last year, and it is currently at a manageable level or even in a virtuous cycle. Alain, anything to add?
Well, Andy, actually, if you look at our inventory in terms of our Q4 inventory, it is already down to CNY 50.4 billion. Compared with the beginning of the year, we were able to bring that down by 15%. In terms of our cost to Q4, it has reached CNY 28.4 billion. Compared with the middle of the year, which was CNY 30 something, CNY 31 billion, this has also come down quite a bit. Under the leadership of Mr. Lu, we have made improvement, but we continue to work and in Q1 and we continue to clear our inventory. However, what you can see is that right now a lot of the inventory issues could be resolved. Looking forward, we believe that inventory level for this year could fall further.
Okay. Thank you. That's very clear. That's very clear. Thank you, Mr. Lu. Thank you, Alain.
Okay, great. Thank you.
We invite the next question, Tina coming from Credit Suisse. Please go ahead, Tina.
Thank you, management team, and thank you Mr. Lu and Alain. This is Tina from Credit Suisse. I have two questions to ask. The first one is that your company's strategy for this year, which is a dual engine growth and to reduce cost and improve efficiency. I'd like to ask, looking at it from a cost perspective, for this year, we can see that a lot of upstream or supply chain in terms of parts, in terms of their price, et cetera, there is quite a lot of increases. For the company yourself, in which areas, for instance there's been quite a lot of decrease actually, apologies. For this year, in what areas do you see a big decrease of price? Is it in camera or in memory, et cetera?
In the IoT system, we can also see that for the ARM part and perhaps they will adjust their fee charges and in terms of the SoC percentage, and it is likely that it will become a divide. So if this is the case. Will this affect your cost reduction and efficiency improvement? On one hand, you need to control the cost and your price. You would also need to make some adjustment or adjust the product structure. For this year, we can also see that the premiumization strategy is something that's very important to you. Going forward for the company and in terms of the brand ASP and how much will we see that improve? This is my first question.
Okay. Yes, indeed. One of our very important strategy is to reduce cost and improve efficiency. At the moment, we can see that there is still more supply than demand. In certain areas, for instance, in memory, SoC, screen, camera, et cetera, at the moment, we can see that there is some decrease going on. I think that there is still quite a lot of room for us to further cut the cost because the oversupply issue hasn't yet been resolved. In addition, in terms of Xiaomi 13 series, it has done quite well, and I think that the management will still have a lot to do with the Xiaomi 13 series.
There's quite a lot of potential for us to unleash. In terms of ARM, I have not yet read the specific report. I think that perhaps for this question, you know, just to answer in a very general way, based on my understanding for any of the fee charges, this would really need to rely on a cycle. We believe that this will be a long-term cycle. I think that in the short-term, in terms of our cost, there won't be any impact. If we're looking at it for the long term, I think that we need to delve into it further. It's very complicated, and we can't really resolve this here. In terms of ASP, we believe that our ASP will continue to go up, because you can see that we are focusing on premiumization, we are very confident about ASP's improvement. Alain, anything to add?
You can see that for our ASP for this year, we have reached a new record high. Mr. Lu has said that our premium products percentage will continue to improve. In addition, Xiaomi 13 Pro, its sales has also exceeded our expectation. Overall speaking for our high-end products and together with our collaboration with Leica in Europe, this has attracted quite a lot of clients. We hope that we would be able to launch more competitive products overseas, this will also help us to improve our ASP.
Okay, great. Thank you. My second question is to ask in terms of your 2023 business. In terms of your 2023 internet business. We can see that for internet industry, perhaps soon we will see some recovery. On the platforms there are also more push forwards. For the company, do you see that, for instance, companies are more willing to spend on their advertisement or on gaming? Do you see any improvement of the gaming revenue? Are these the areas that you think that we will see better growth? In addition, for your value-added services, if we look at the company's profit growth margin, this is very important to support the company's growth margin. What's your view?
Okay, let me answer this. If you are looking at 2022, I think that again, the backdrop was difficult, but you can see that our IoT business is relatively stable. I think that this is because we have some increments in overseas, and we continue to see more users overseas. In the meantime, in the premium phone sector, the life cycle of income versus normal mobile phones, it is higher. With more of the premium products taking up the percentage, this will help with our IoT business. Secondly, how do we look at the market? We're also looking at this recently and looking at some of our peers' announcement, and they are also in the beginning of cutting cost and improve efficiency and for second half of this year. They will weaken their relative cost-cutting projects.
I think that in the short term, as I say, they will be focused on cost-cutting. I think that going forward, we hope that there will be some improvement. Thirdly is on gaming. On gaming, actually, you can see that the market is actually quite pro-gaming these days. You can see that there are signs of the gaming market opening up, and these are beneficial signs that we see and good for our business. In addition, we can see that global network users has reached 1.5 billion people. We believe that if we can grasp this opportunity going forward, we will be able to grow further. Thank you very much.
Thank you. Our next question comes from Timothy from Goldman Sachs. Please go ahead.
Thank you, Mr. Lu and Alain. I have two questions to ask. The first one is that I remember in our last meeting you had shared with us for 2023 China Mobile smartphones sales outlook. Back then I think that you gave us the idea that it was going to be flat. Now with the pandemic measures being lifted, do you have any updated outlook for the sales of mobile phones? Secondly, on the gross profit margin for mobile phones for 2023, it is at what level? If we are going to break it down, for instance, coming from premiumization or cost cutting or for instance, some exchange rate contribution, et cetera. Can you please let us know what are the different percentages of each of these different factors that is boosting your profit margin?
Looking at our figure at the moment, for January and February, it decreased by about 4% for the market as a whole. For March it remained flat. For the whole of Q1, I think that there is a year-over-year decrease. From this perspective, we think that it is too early to say that the market has recovered. Will it recover second half of the year?
Of course, we hope so. This is our view of the market. In terms of this year for our growth margin, we think that our growth margin will improve. It is very difficult to say that how much comes from cost cutting, how much comes from premiumization. I think that, but at least because of these reasons, this will be a number of reasons, a combination of all of those. Timothy, actually, if you look at mobile phones growth margin last year was about 9%. Our five-year average was 8.6%. We have improved last year. 2021 was a very good year.
Again, that was because of the demand and supply in the market. If you look at our growth margin and in terms of U.S. dollars strengthening and the benefit it brought to our growth margin is about 1%-2%. I didn't really calculate the specific figure. In terms of inventories price dropping and the impact on this is 1%. If you do the calculation, I think that we could be above 10% of the gross margin for mobile phones. If that's how we look at this, if the exchange rate remains stable or last year's fluctuation of the exchange rate, it does not happen again. If we actually convert that, you can see that our gross margin would actually be above 10%.
Okay. Thank you. Thank you, Mr. Lu.
Great. Thank you. Our next question comes from Ren Jin from CICC.
Thank you Mr. Lu and Alain for taking my question. I have two small questions. First of all, Mr. Lu, just now you have shared with us on the new retail and you have said that it is growing very fast. Could I please ask about your offline shop plans, for instance, for GMV and new shop plans as well as some combination with our premiumization strategy? The second, I would like to ask about the new EV. At beginning of the year, Mr. Lei has also shared with us about some of the updates on the EV. Could I please ask in terms of EV business, is there anything to share?
Okay, thank you. First of all, in terms of the new retail, let me say a few words. In 2021, we said that this was the year of fast expansion of opening shops, and the second year is to improve the efficiency, and this year is to work on the integration. The integration of the shops is key for this year, especially that, this year we'll continue to work with our partners and to ensure that they would be able to present more of a professional service to our customers and to be better integrated. Secondly, we will continue to follow our groundwork laid down in 2022 in terms of efficiency improvement. We have not yet finished that work, and we think that this could be further solidified in 2023.
Apart from this, we should also need to improve our non-mobile phone business. For instance, in the home appliance and last year's growth was very fast, especially in air conditioner that has a lot of improvement. Actually, if you go and look around and for refrigerators or smartphones, people usually have one or two in their homes. We think that in the non-smartphone sector and in the Xiaomi home appliance sector, there is still quite a lot for us to do. Of course, I'm a firm believer in the premiumization. I think that for one, only with the best setting premiumization products that you would be able to bring the foot traffic. Secondly, it will also boost our GMV greatly.
We believe that with all these measures and for the Mi Home and in 2023, we will be going up another step. In terms of EV business and today in terms of our timeline, if we look at our schedule, and according to Mr. Lei, we are actually ahead of schedule, we have already completed the necessary work and tests in addition. Everything is on track. That's what I would say. Just now Mr. Lu has mentioned in his remarks, he has already stated that with the lifting of the pandemic measures in January and February, the GMV is 30% more than last year. You can see that this is the improvement. Comparing with last year, of course it's not that fair.
Our GMV for this year versus last year for each quarter is higher than last year's each quarter. I think that, again, this is a sign of a certain recovery. It's for sure it has recovered. In addition, in terms of a premium product, which is Xiaomi 13, it accounts for over 55% of our offline shops. For IoT, it continues to take up more percentage of our business. In addition, we also have the other business, for instance, the carriers which come into our shops as well as the trading in business. These are all happening at the same time. I think that we are making good progress in terms of our offline shops. In terms of EV business, I think that Mr. Lu has explained it very clearly, and I will not repeat. Thank you.
Okay, thank you Mr. Lu and Mr. Alain.
Thank you. Our next question, Huang Leping from Huatai. Please go ahead.
Thank you Mr. Lu and Alain. I have two questions. The first one is to ask about AI. Recently, the market focuses quite a lot on ChatGPT and its impact on the company. For the company, you have also focused on AIoT business. In terms of the AIoT, what is your technology capability, and will you be able to grasp the ChatGPT opportunity? Secondly, in the past one month, we have seen a lot of volatility, including the collapse of Silicon Valley Bank, and you have a lot of business, including investment business. At the moment, what are your risk exposures of all these volatilities, and how do you cope with such volatilities in the capital markets going forward?
Well, let me answer your ChatGPT question first. Yes, ChatGPT is very popular, and we follow this closely. You know that for chat, for Xiaomi, actually, we have tried quite a lot in AI, big models, for instance, for iAssistant, and this is basically an actual application of a model of a prototype and from that into actual practice. I think that is a major challenge. ChatGPT has enlightened us and for instance, our AI team, we have 1,200 people on that team. iAssistant, we worked on this for six years. We have also accumulated a very rich users experience. Going forward, we will continue to work in this area and to introduce more advanced capabilities and to carry out better functions.
For our AI assistant, AI assistants and for iAssistant, basically with AI's support, for instance, for our mobile phones, EVs, vehicles as well as our refrigerators, et cetera. We at the moment have about 115 million people connected to our devices. I believe that this is an area whereby we are very confident about iAssistant and the business it can achieve in the future. Okay, great. For your second question, which is with respect to the volatility in the international financial market, I think that very recently we can see that all these banks are affected. We do not have any deposits with them. This is number one. The banks that we work with, majority of them are tier one banks.
We monitor the market situation every day and to ensure that our money will not be put at risk. This is a foundation and basic work of our responsibility of managing the fund. Secondly, we are also trying our best to bring back all the capital to our headquarter and to manage this. This is part of our homework. Going forward in the future, we are also monitoring the market closely. Of course, the market is changing rapidly, but in terms of what we are doing, we continue to maintain a very robust and stable management of our Capital. We have not yet invested in any derivative tools, et cetera. Relatively speaking, I would say that we are very robust. Thank you.
Thank you. Our next question comes from Huang Yan Yuan from Citic. Please go ahead.
Thank you, Mr. Lu and Alain. I have two small questions. The first one is that on the investor day in beginning of the year, Mr. Lu, you have also shared with us in terms of the overseas offline channels. I'd like to ask when you are building more of these localized basic service provisions, what is your expectation of effects you wish to achieve with these localized shops? This would obviously come with a large cost. I don't know how you would value such cost efficiency.
Second question is that last year we have some streamline of the staff. This is something that's quite common in the internet industry. At that time, I think that, there will be some expenses related to that. Looking at this year, do you think that in terms of our sales, and in terms of expense ratio and, will we see a better decrease of your expense ratios, et cetera?
Okay. First, in terms of our overseas expansion, let me share with you. After Chinese New Year, I went to six countries in three major regions with my team and to look at, our different markets, you know, right after the pandemic, and it was for the first time for us to be able to be on the ground and to have communications. Whatever message that we had before the pandemic, during the pandemic, it was not enough, and definitely not as good as face-to-face communication.
On one hand, we can see that last year, all brands suffered and faced a lot of challenges. Some of the brands in certain countries, they have already exited the market. Xiaomi will continue to adhere and insist on staying in all these markets globally. I think that for Xiaomi's business, especially when the market recovers, and I think that this will be a major boost, and that will be reflected very quickly. Secondly, the global market, of course, is very large, it's very fragmented and diversified. With all of this in the past, perhaps if we look at the market, and generally speaking, we will be looking at whether the market is big enough or what are the structures of the consumers. These two years, actually, because of the geopolitical reasons, we will also be adding the geopolitical risks.
When we select markets, we will be selecting markets that have low risks and with a large population base and with a strong consumption capability. Those are the markets that we would focus on. Based on this, we looked at the 20 countries and markets. In those countries and markets, we will be investing heavily into those. We believe that such investment will definitely generate a good return to us, whether it is from a strategies perspective for our mobile phones or whether it is for our AIoT strategies. I think on both fronts, we will benefit from this. I believe that after many rounds of identification and in terms of our basic strategies pushing forward, I do believe that we have done quite well.
I, myself, I'm a firm believer in this, and I think that Xiaomi going forward, we would be able to achieve a safe and a highly efficient business, and we will always be able to produce and provide our products to our global consumers in a highly efficient manner. This is our long-term goal. Second, in terms of staff streamlining, I'll have Mr. Alain Lam to answer this question.
I think that Mr. Lu's answer reflected a very good point. Going forward, we will continue to have a refined business. In addition, for instance, we have established two important committees. These two committees, in terms of going forward for our refined business, they play a very important role. This is why we need to look at these countries one by one. This is because while we make investment, of course, we make investment in countries whereby we believe that we could generate a return.
This is a part of our local geographic operation. Your second question is about lowering cost and improving efficiency. You can see from our financial statement there is some decrease of staff. In the meantime, we're also investing in some other areas that we believe will give us better returns. For instance, EVs and our other overseas markets. We have in and out, basically. Personally speaking, I think that streamlining of the staff is only part of the job.
Looking at our refined operation, the key is really how to improve our investment, how to make sure that our R&D expenses can be improved in terms of the result. It is not simply just about the human streamlining. It is also about where the strategies are and whether they are following our directions. What I'm trying to say is that I'm not simply focusing on every cent that I spend on a certain person, but rather on the whole picture.
Thank you. In the interest of time, we invite the last question. Jian coming from Orient Securities.
Thank you, Mr. Lu and Alain. I have two questions. The first one perhaps is quite similar to a question before, we can see that in Q4 in terms of your sales and the marketing expenses accounted for 34%, and this is actually the highest figure for all these past few years. Perhaps this is also related to the complicated geopolitical regions. We have also heard that Mr. Lu saying that you need to make a lot of efforts to ensure your advantage overseas. Considering all these, going forward in terms of the sales in China as well as overseas for sales and marketing expense, what's the relationship?
What's your other question? Would you like to finish your question, perhaps?
Okay, sure. My second question is that we can see that for your large home appliance business, in 2022, you have achieved good results. Do you have any experience to share with us in terms of your successful experience and how could those benefit other business?
Okay, thank you. You had talked about Q4 accounting for 53%. I think that in a short term of one quarter, this is related to our strategy, for instance, for Xiaomi 13. There was more marketing expense because we had brought that forward by a month, et cetera. I think that in terms of long term, we still believe that the overseas market still has a lot of room. For one, overseas market development was later than China. We started only in 2014. In the last three years, in terms of the overseas market management, there were a lot of difficulties. Overall speaking, for overseas market, we feel that there is still a lot of room for us to develop and a lot of potential for us to discover because the market size is there, it's always bigger than mainland.
For our AIoT percentage, in overseas is way lower than the Chinese market. For the overseas market, I still believe that there is immense potential. For this year, I have also arranged quite a few business trips for myself and to try and to go to all these different overseas markets to take a look. We are fully confident about the overseas market, whether it's the AIoT product or our premium products, or any other areas. There is still a huge gap between overseas market versus the China market. Through our hard work, we would be able to discover and unleash such potential. Second, in terms of our large home appliance business, especially for air conditioning, I remember that air conditioning grew by 50% and refrigerator was 100%.
Actually, for today in this market, we are not yet a fully-fledged player. I think that we are number five for air conditioning, refrigerator number six. There are still many number one, number two in the respective areas. We are still way behind them. I think that for large home appliance, we were able to grow so much last year is because, first of all, we have been in these industries and sectors for a few years. For a new business, generally speaking, it would take us about just three to four years to complete the business. There is a learning curve that we need to get over it. Roughly speaking, three to four years, that's enough. After the learning curve, we would know that where we should be investing.
I think that last year, first of all, is our investment. For instance, we had invested in a lot of resources, and we were able to look at and grasp these opportunities. For instance, air conditioning, and we were able to grasp the electronic system and for instance, how does the air flow in the air conditioning and to make sure that the air conditioning can run efficiently. For refrigerators and washing machines, we are also working very hard towards making sure that we can grasp these key points. Secondly is that compared with our competitors and our partners, in terms of our manufacturing capability, we are improving it. In addition, this will help us to reduce cost. Thirdly, for Mi Home, and I think that Mi Home has fully helped us to realize our advantage.
You can see that, if you go some people's home, and you can see that, for air conditioning, we will have two air conditioners on the wall and one air conditioning standing in the room. For refrigerator, it's the same. I think that people will really need to try it out and see how they think about it. I believe that the foundation that we have laid out last year, for the next few years, this will continue to play a very important role. Again, as I say, there is a huge market potential.
If you go to my home and basically all my home appliances have been changed into Xiaomi home appliances, and I feel great about it, and I am very confident about home appliance business. Not only that, it has improved our revenue and profit, it has also improved the stickiness of our customers and improved their shopping structure. Alain, do you have anything to add?
Well, if we look at 2022, for China is 50.2% and overseas was 40.8%. It's similar to the year before. As Mr. Lu has said that there will be some impact by the new product launch. Overall speaking, I think that it's 50/50 for China and overseas for IoT, and I think that Mr. Lu has explained it very clearly, so I won't go into details. Okay, great. Thank you. Thank you very much. This concludes the conference call today. Thanks again for joining us. We hope that you can continue to support Xiaomi Group. Thank you, everyone, and goodbye.