Xiaomi is set to build an electronics empire by both investing in startups as well as creating gadgets.
Xiaomi’s founder Lei Jun said in December last year that the company has invested in 77 smart gadget startups in what the company calls the “Xiaomi Ecosystem”. These startups saw their revenue at around RMB 15 billion (USD 2.2 billion) in 2016, said Lei at that time. Among the startups, 30 have launched products, and four have emerged as “unicorns”, that is, startups valued at USD 1 billion or more.
Now Xiaomi-backed startups have covered almost every sector of gadgets, including wearables, home robots, and Virtual Reality (VR) headsets.
Xiaomi raised the concept of the Xiaomi Ecosystem in 2014, when Lei Jun planned to invest in 100 gadget startups over five years. The idea is to apply Xiaomi’s model in a multitude of areas, on the basis of the company’s overwhelming success in smartphones. Lei invested in smaller gadget-making startups, helping them with manufacturing and marketing. Mi Store, Xiaomi’s online store built in 2011, is a major channel to sell smartphone accessories.
For these startups, landing investment from Xiaomi means a lot of resources, including the Mi Store, Xiaomi’s marketing, and a gigantic number of potential users.
Huami, arguably one of the most successful startups, is the company behind the Mi Band. In July 2014, Xiaomi unveiled the first generation of Mi Band, priced at RMB 79. At that time, the prices offered by Mi Band’s competitors were several times that of the Mi Band. From August 2014 to March 2016, Huami smartband shipments reached 20 million, according to the company.
In February, Xiaomi released its first chipset, the Surge S1, representing a major step toward independent gadget making. Will this allow Xiaomi-backed startups to continue to prosper? We’ll have to wait and see.
(Top photo from Mi.com)