Correction: An earlier version of this story’s headline implied that the expected sales are to come from Xiaomi’s first-party hardware. The expected sales are to come from third-party companies that Xiaomi has invested in.
Lei Jun, CEO of Chinese smart device maker Xiaomi, is known for making ambitious predictions. This year is no different: At the 2016 China Mobile Global Partners Conference last week, he announced the company has invested in 77 hardware makers with total sales expected to be 15 billion RMB (2.2 billion USD) this year alone.
Only a few product categories are designed and made by Xiaomi itself even though it offers a wide variety of hardware products. The company unveiled a “100-hardware-company” strategy in 2014, aiming to invest in all kinds of consumer electronics companies. Branded as Mijia (米家 or Mi Home) in March, Xiaomi has partnered with Shunwei Capital, a VC firm co-founded by Lei Jun, to sell white-label products through Xiaomi’s online and offline channels.
Out of these 77 companies, 30 have so far launched products. These new products include not only popular smart hardware categories, such as self-balancing scooters, cleaning robots, drones, VR headset, smartwatches for kids, and connected bikes but also some interesting products including a connected rice cooker and an electric mosquito repellent device.
Together with the in-house managed categories, including smartphone, laptop, tablet, smart TV, set-top box, and WiFi router, Xiaomi offers now more than 40 categories of electronics products. As its smartphone shipment growth has stagnated, Xiaomi now depends on Mijia products for sales growth and media attention.
The Mijia app, developed by Xiaomi, connects and controls all the devices. Through the app users are also able to buy other related products such as the replacement filters for the water purifier. The app has had more than 50 million installs and more than 5 million daily active users, according to Xiaomi. More than 40 million devices are already connected
Mijia products are leading in several popular categories in China. The Mi Band, the smart wristband developed by Huami Technology, the first member of Mijia, has shipped 23 million units since its launch in July 2014, according to Mr. Lei. Apart from activity trackers, the company has also developed a pair of smart shoes, by partnering with Chinese sports brand Lining, and a smart body scale. Huami Technology unveiled last week that its total annual shipments had reached 16 million and annual sales had reached RMB1.5 billion (roughly US$220 million) (announcement in Chinese).
Xiaomi earbuds, made by 1More, have shipped 18 million units; Ants, a Dropcam-like video monitoring camera, have sold 3.3 million units; the air purifier launched in late 2014 and has shipped 1 million units, according to Mr. Lei.
Some accessories also sold pretty well: Mi Power Bank, one of the first products Xiaomi introduced from a third-party company, and a power strip has sold 55 million units and 5.5 million units, respectively.
16 of the Mijia member companies has exceeded RMB100 million (about US$14 million) in total sales this year and 3 of them have reached RMB1 billion (about US$140 million), according to Xiaomi CEO.
Like other Xiaomi products, these from Mijia products are all very affordable. Xiaomi’s cleaning robot is priced 35% lower than the cheapest Roomba model. Mi Bands are sold for a fraction of their counterparts by Fitbit.
Four of Mijia member companies are “unicorns”, private companies valued at US$1 billion or more, according to Mr. Lei. It is reported that the four companies include Huami Technology and Zimi Technology, the maker of Mi Power Bank.
Not only startups, Xiaomi and Shunwei Capital also make investments in established companies: iHealth whose connected healthcare products are available on Apple’s online store; Ninebot, the Chinese personal transportation device maker that acquired the US-based industry leader Segway last year; and Midea, leading Chinese home appliance companies.
Xiaomi has also established a Mijia open platform, offering custom hardware and software development solutions, cloud services, and other technical support. Accepted products will be able to use the Mijia brand, run crowdfunding campaigns on Xiaomi’s own platform, and sell their products on Mijia’s online store. Third-party products that have successfully landed on Mijia store include an electric toothbrush, a portable smart washing machine, a smart lamp, and a plant monitor.
image credit: Xiaomi