Huami (NYSE: HMI), a leading cloud-based healthcare services provider, has made significant progress in fulfilling its mission “connecting heath with technology” according to an open letter by CEO Huang Wang late last year. AllTechAsia interviewed Huang last week to talk about Huami’s recent moves, operations, and global collaborations, including news about its newly appointed CFO from Philips, their projects with insurance giant Prudential, and the establishment of a joint lab with Dr. Zhong Nanshan, China’s Anthony Fauci. The discussion also explores how the Covid-19 pandemic has offered the company an opportunity to understand the core value of health in its mission.
AllTechAsia: What does the European market mean to Huami?
Huang: The European market has been the most important one for Huami. Our smart watches are top sellers in Italy and Spain, and we are also among the top 4 in Russia and popular in many Eastern European countries. Though Covid-19 hit Europe hard, many of our suppliers have begun moving their operations online, so the market has recovered relatively quickly.
More important is that in the past few years, we have conducted a lot of research and development in Europe. For example, we work with the Norwegian University of Science and Technology in a project called the HUNT Fitness Study, which was crucial for developing our PAI algorithm. We also acquired a series of assets and teams related to the PAI algorithm. Over the years, we have done a lot of in-depth operations in Europe.
For the important European market, the most significant task of our sales team is to strengthen communication with EU regulators so we can be more in line with local laws and regulations. We also have to be able to respond quickly to future changes, as well as to strengthen investments with many chip suppliers in Europe. We’re working on building more partnerships, expanding sales channels, and then continuing to increase relevant R&D resources in Europe with universities and research institutions. The ability to link these activities smoothly is critical, as we’re trying to solidify or expand our position in the United States, Europe, China, Southeast Asia, Japan, South Korea, and other markets. Because we have continuously established a series of bases and made investments in Europe in the past few years, we have a strong foundation today and can do good business there. I believe that in the future, we will not rule out more joint projects in Europe.
Our new CFO Leon Cheng Deng, who came from Philips in Netherlands, brings an extensive finance background, strong knowledge of the European and many other key international markets, and strategic transaction experience that I believe will help Huami accelerate its next phase of growth. After he arrives in Beijing this September, he will work closely with our China-based teams. He will also fly regularly to the Netherlands to deal with our European business.
AllTechAsia: What do you think about the American market?
Huang: We started a team in the United States at the end of 2014. Our industrial design team has always been based in Silicon Valley. We also have our artificial intelligence team in San Francisco and our North America sales team for local services in Vancouver, Canada. So our operations in North America are robust. In addition, our COO Mike Yan Yeung moved back to San Francisco from Beijing at the end of last year, which has been helpful in expanding our North American operations. But we can do more.
For example, we need to further cooperate with North American insurance companies. We’ve made some progress in that direction; this year, we formed a cooperative relationship with global insurance company Prudential’s Asia division. What’s the significance of this? It’s very important for the industry and for Huami, as Prudential, a large insurance company, is willing to adopt a complete set of the PAI algorithm to help its customers improve their health. Whether consumers buy life insurance or health insurance, the insurance company starts to lose money if the customers make a lot of claims. Huami’s algorithms and products can help Prudential’s customers stay healthy, which is better for them and for the company. This is indeed a breakthrough collaboration for Huami and our industry.
Huami hopes to grow as a global company that serves consumers across the world. This is why we are listed on the New York Stock Exchange (NYSE). Being listed helps us standardize our entire operation, much as we had to with regard to the General Data Protection Regulation (GDPR) in Europe. The strict rules of the NYSE have helped our potential global partners as well. They can read the materials we submitted to the SEC, which helps them understand what kind of company we are. This is very important because many of our services are health-related, which requires our partners and users to trust us deeply before they invest in any of our products.
AllTechAsia: Is the Covid-19 pandemic an opportunity or a challenge for Huami?
Huang: We started talking about “connecting health with technology” as our mission, or redefining this concept, back in December last year. It doesn’t mean that we started to act on the mission at that time, as we’d already been discussing this mission for two or three years. We have already made investments and have gathered a lot of R&D resources to innovate our health monitoring data analysis. It all took time.
Cooperating with Dr. Zhong Nanshan, China’s Anthony Fauci, was a landmark achievement for Huami. Back in April, Dr. Zhong said that he was busy fighting the pandemic but that afterwards we could establish a joint laboratory with his team. In fact, this was not the first that we reached out to Dr. Zhong. Two years ago, his team began to use our smart bracelets to do research on the respiratory system and chronic obstructive pulmonary disease. Their trust in us is very high, so it was natural to establish a joint laboratory to help China manage the follow-up care and full recovery of Covid-19 patients after they are discharged from hospitals. During the first half of the year, we not only built the joint laboratory with Dr. Zhong, but also established health-related cooperative agreements with other Chinese and European partners.
Due to this year’s Covid-19 pandemic, I no longer have to explain to our team why we are focusing on health. Everyone recognizes that good health is an essential need of all human beings. Over the past several months, no one has asked me why I switched to the healthcare industry after starting with smartwatches. We undertook our mission because we saw how IoT can improve people’s health.
(Top photo from Huami/Huang Wang at CES)