Xiaomi up­grades its ecosys­tem strat­egy with sub-brand

The Pak Banker - - COMPANIES/BOSS -

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.

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