Xiaomi Invests In ‘Smart Homes’ Initiative

Beijing-based smartphone giant Xiaomi has launched a “connected home” initiative with home appliances maker Midea Group, accompanied by Xiaomi’s purchase of a 1.29 percent stake in the company for 1.27 billion yuan (£129m).

Xiaomi, which direct-sells budget smartphones over the Internet using aggressive marketing tactics, has quickly surpassed Apple, Samsung, Lenovo and ZTE to become the top handset maker in China, and the third-largest in the world.

Connected devices

The company has said it wants to expand into other connected devices by investing in 100 firms whose products can be sold using Xiaomi’s Internet-sales infrastructure.

As part of this push, Xiaomi launched an activity-monitor wristband in July and, earlier this month, a smartphone-operated air purifier. The company has invested in about 25 connected-devices companies so far.

Midea, based in Guangdong Province, just north of Hong Kong, is a quickly-growing maker of home appliances including air conditioners, refrigerators and kitchen appliances, and said earlier this year it wanted to move into Internet-connected devices. Midea’s sales grew 17 percent to $12.5bn (£7.9bn) in the first six months of 2014, compared with the same period the previous year, with net profits growing 58 percent to $1.1bn.

‘Internet of Things’

China has the world’s largest number of mobile phone users, and is a growing market for connected devices. Also known as the “Internet of Things”, this market is itself attracting significant investment, including Google’s purchase of Nest Labs earlier this year for $3.2bn.

Xiaomi is also investing in online content, including the purchase of a stake in video site iQiyi, a subsidiary of Chinese search leader Baidu, last month. Among its other recent investments are a stake in 21Vianet, a Chinese data centre operator listed in the US, announced earlier this month.

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