The new product in the 'sunk' market is the first fitness wristband priced at less than CNY 100 per device.
Image credit: Redmi official website
On April 3, Redmi held its tenth anniversary press conference online, which saw it release a total of 22 new products, including connected washing and drying machines, wristbands, humidifiers, portable juicers, the new RedmiBook and many others. The hottest topic is wristbands – and its loT product layout is becoming ever more expansive.
Unlike Xiaomi's 'own-name' brand wristband, the main body and charging interface of the Redmi product use an inseparable design. The official said that the battery life can reach up to 14 days. In terms of functions, the bracelet supports heart rate detection, sedentary reminder, sleep detection and 24-hour health management.
As Xiaomi is acting as the main Chinese player in the wearables market, especially for the wristband category, users and media are expecting this first launch of Redmi to shift units and achieve profitability.
According to the IDC report, Xiaomi was the second-highest wearables player in the world, just following Apple, and followed by Samsung, Huawei and Fibit. Its total market share was 12.4% in 2019. And the most consumption categories include earwear, wristbands and watches. In 2019 Q4, Xiaomi's wristbands occupied 73.3% of its total wearable product shipments.
The difference between Redmi and Xiaomi wristbands lies mainly in the price for similar products, with CNY 99 (USD 14) and CNY 169 (USD 24) being the respective price tags, which really fits Xiaomi and Redmi target customers in the sunk market. While the price points actually aren't too different, the possibility of competing for the same customer group may happen – so Xiaomi is now beginning to target the high-end market. This quarter's conference call mentioned that it will fully promote 5G in 2020 and release more than ten 5G phones at various price points.
According to Xiaomi's 2019 financial report, the revenue of Xiaomi IoT products increased by 41.7% year-on-year to 62.1 billion yuan, and its revenue share continued to rise, which is a good indicator that its loT diversification strategy is working out. And Redmi is copying Xiaomi's road even as it is more focused on higher cost performance and e-commerce market, and Xiaomi is concentrated on the more mid-high market and new retail.