It’s no secret that Chinese smartphone vendor Xiaomi has bigger plans than just making smart hardware, and an important part of its ambition is online finance, a business that has become an absolute must for almost all Chinese internet giants.

As a further move towards the goal, Xiaomi invested 885 million RMB ($115 million USD) in a newly established online bank through its wholly owned financial subsidiary Yinmi Technology.

To some extend, however, the new bank isn’t a “Xiaomi Bank” in the real sense, because the gadget maker only takes a 29.5 percent stake as the second largest shareholder of the joint venture, which has a total registered capital of 3 billion RMB.

This can be reflected in the name of the bank, which is entitled as “Sichuan Hope Bank” (四川希望银行) after New Hope Group, the largest shareholder, which holds a 30 percent stake in the company. Chengdu Hongqi Chain, a chain retailer, holds a 15 percent stake, while remaining investors take a 25.5 percent.

It’s important to point out that a 30 percent stake is government-prescribed upper limit for a single shareholder in a private bank. Tencent and Ant Financial hold 30 percent in WeBank and MyBank respectively as the biggest shareholder of their respective online banking units.

New Hope Group is a business conglomerate with an extensive financial background in banking, securities and insurance. We may also expect the new bank to have an offline presence thanks to Hongqi Chain’s vast physical store network, which is a major asset when competing against other online banks. Of course, Xiaomi will grant the bank access to its huge (and young) user base.

Online financing has been in Xiaomi’s sights for some time.The company has been in financial businesses from payment (MiPay) to lending and financial management services (MiFinance). Apart from in-house services, Xiaomi has also made a series of finance-related strategic investments. Companies they have invested in include P2P lending site JimuBox, brokerage startup Tiger Brokers and investment management platform

Xiaomi’s online banking initiative puts it up against other internet heavyweights. Alibaba and Tencent have expanded considerably into the online banking space since they received their respective banking licenses two years earlier. Xiaomi still doesn’t have the required license, though they have cleared the path to further accreditation by obtaining a payment license as part of their acquisition of third-party payment company Jiefu Ruitong.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.

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