JD invests in smart home products maker OMCO to challenge Xiaomi

China’s second largest e-commerce website JD.com signed a shareholder agreement with OMCO, which focuses on smart water purifiers, and jointly launched a crowdfunding campaign on the JD Finance platform this month. This strategy is seen as a move by JD.com to challenge Xiaomi in the smart home scene.

“Water pollution is becoming serious, but water purifying devices are not widely used in homes, so we chose smart water purifiers as an entry point into the kitchen ecological system,” OMCO’s CEO Lin Bingjin said.

“Our goal is to build a safe, convenient smart kitchen system for 100 million middle class families based on the internet of things,” he added.

In his eyes, kitchens have historically been a cell full of oil and smoke, but they are fast becoming an open and social room, where family members or friends can communicate.

Founded in 2014 in Shanghai, OMCO’s team includes water purifier engineers, hardware engineers and internet experts, aiming to upgrade the system of smart water purifiers and intelligent home appliances. Earlier, it landed RMB eight million in angel round financing.

OMCO relies on its OMOS cloud-based system to operate, featuring management and service platforms, as well as a business platform for individual needs. It sets up offline stores and urban operators as a means to access markets. OMCO is using the strategy of “a big platform with small operators” to adjust the cooperation between service and resource providers.

JD.com becoming a shareholder of OMCO should help increase the platform’s sales volume to hundreds of millions of RMB. OMCO plans to select 10 to 20 agents to sell 15,000 to 20,000 smart water purifiers to customers in 2016.

JD.com’s exploration of the smart home market will help it improve its ecological system to cover more market segments.

Chinese electronics manufacturer Xiaomi has actively been producing smart home products for some time. These include a Xiaomi air purifier, Xiaomi water purifier and a smart socket with USB port. JD.com is now looking to be Xiaomi’s competitor in this market.

Besides Xiaomi and JD.com, Baidu, Alibaba and Qihoo 360 are trying to expand their ecological systems to include shopping, food ordering, medical services, finance management and travelling.

(Top photo from ebrun.com)

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