Xiaomi upgrades its ecosystem strategy with sub-brand
China's top smartphone maker Xiaomi has reshuffled its ecosystem strategy by launching a new brand, Mijia, to fully explore the smart home sector, founder Lei Jun announced at a media conference held in Beijing Tuesday.
The move is aimed at differentiating products made by Xiaomi itself and its ecosystem partners, according to Lei. He predicted that products sold by these companies via its own e-commerce platform mi.com would exceed 10 billion yuan ($1.54 billion) this year.
The first product to enter the market under the brand Mijia is a smartphone-controlled induction heating pressure rice cooker. Users can scan the barcode on their rice bags so the device can cook the rice according to brand, type, and origin. Currently, the app can identify 200 brands of rice, and that category will be expanded with the growth of its customer base.
The rice cooker is priced above most Chinese-made ones, at 999 yuan and will be available on March 31.
There would be a new product from this ecosystem each quarter, Lei added.
Previously, under the Xiaomi brand, Huami Inc, which was founded in 2014, had sold 18.5 million fitness-tracking wristbands, ranking No 2 in the smart wearable sector globally. Likewise, Zimi Tech had sold 46.9 million portable power rechargers and Smartmi (or Zhimi in Chinese) had sold one million units of air purifiers each year, Lei said at the conference.
Xiaomi has been building an ecosystem around its core business since two and a half years ago. In addition to making smartphones, it also "makes startups", Lei said. He said Xiaomi has invested in 55 companies, at a speed of one company each every 15 days. The experienced venture capital investor added that 29 companies were set up by Xiaomi from the scratch, including naming, organizing management teams and choosing products to manufacture. Among the 55 ecosystem companies, 20 already have their own products, five have gained an annual revenue of more than 100 million yuan and two have raked in one billion yuan yearly.
Liu De, co-founder of Xiaomi, said the company has a team of 170 employees in charge of its ecosystem business. These employees, who joined Xiaomi at a rather early stage, are responsible for communication between Xiaomi and its ecosystem companies and making sure products from these partners are in line with Xiaomi's culture and design standards. They would also help them with branding, supply chain, sales channels and financing.