Xiaomi has hired the president of an online bank to lead the smartphone maker’s budding consumer finance business, the company announced Thursday.
Why it matters: The Beijing-based company is actively seeking new growth opportunities outside smartphones as global handset sales shrink. The company has been trying to leverage its massive global handset user base to boost other business segments such as personal cloud service and consumer finance service.
- Xiaomi has long been planning to spin off its finance business into an independent entity—similar to Alibaba’s division of Ant Financial, which has grown into one of the world’s largest tech startups with an implied valuation of $200 billion.
Details: Xiaomi has appointed Zhao Weixing, the former president at Sichuan Xinwang Bank, as the vice president of its fintech branch, the company said on social media platform Weibo (in Chinese) Thursday.
- Zhao has served as a top executive at China Minsheng Bank, Shanghai Pudong Development Bank, and the Bank of Hangzhou, the company said.
- Founded in 2016, Sichuan Xinwang Bank is China’s third online banking firm following Tencent-backed Webank and Alibaba-backed Zhejiang E-Commerce Bank.
- Xiaomi owns a 29.5% stake in Sichuan Xinwang Bank, according to corporate information platform Tianyancha (in Chinese).
- Zhao will report to Hong Feng, chairman of Xiaomi’s fintech branch, the company said.
- Sichuan Xinwang Bank told Chinese news outlet Caixin that Zhao would continue participating in the bank’s development “by other means” despite his departure.
Context: In January, Chinese regulators gave Xiaomi the green light to set up a consumer finance company in the southwest municipality of Chongqing.
- The company, however, has yet acquired a consumer finance license, which allows holders to lend money to consumers. In March 2019, it had to break up a peer-to-peer (P2P) lending subsidiary based in Zhuhai, Guangdong province amid a nationwide crackdown on online lending.
- Amid the domestic regulation uncertainty, the company is simultaneously eyeing fintech markets overseas.
- The company acquired its digital banking license in Singapore in January and was said to be in talks to expand its financial product offering in India late last year.