Xiaomi Will Increase Investment in ‘5G+AloT’ over the Next Five Years

Healthcare, Technology, Financials Author: Chendi Qian Editor: Luke Sheehan Apr 25, 2020 12:15 AM (GMT+8)

Through an 'ecological chain' model, Xiaomi is placing its hopes in a 'smart life' future.

Image credit:  Sebastian Scholz (Nuki) /Unsplash

On April 24, 2020, Xiaomi (1810:HKEX) and Shunwei Capital launched the first online DemoDay, conducting investment roadshows for invested companies and attracting nearly 1,500 investors to participate in the conference. Since the establishment of Xiaomi ten years ago, it has invested in over 290 companies. Xiaomi and Heshun Capital together have invested in over 500 firms. As a result, a prosperous ecological layout for smart industry development has been put in place.

Shunwei Capital was founded in 2011 by Lei Jun and Xu Dalai, and has managed four phases of USD 2.96 billion fundings and two phases of CNY 2 billion (USD 280 million) fundings.

In this DemoDay event, about 60 invested companies (in Chinese) were unveiled and divided into six special sessions, including smart hardware, finance, to C and to B, consumer goods, frontier technology, and overseas markets. Corporate business covers fashion design, children's machine education, smart sports clothing, pet food, boutique e-commerce, etc. Participating companies included online payment provider PAYSSION, beauty equipment AMIRO and non-contact medical and health data collection and analysis platform Darma.

Among them, there were 8 invested companies from India in the overseas special session. Half of these companies are third-party service platforms such as hiring platforms, bus platforms and audio platforms. These platforms can become potential payment application scenarios, enabling access to customers. 

Last year, Xiaomi officially launched the 'mobile phone + AIoT (AI + IoT)' dual-engine strategy, its business focus shifting from being only 'mobile phone' driven to double 'AI+loT' driven. Compared to the '5G+AloT' strategy, it's obvious that loT is Xiaomi's constant underlying focus. According to its 2019 financial report, as of December 31, 2019, the number of connected devices (excluding smartphones and laptops) of the Xiaomi loT platform reached 234.8 million units, a year-on-year increase of 55.6%.The revenue of Xiaomi's IoT and consumer products sector was CNY 62.1 billion (USD 8.77 billion), an increase of 41.7% year-on-year. While the gross profit margin of this business sector increased from 10.3% in 2018 to 11.2%, and the gross profit margin is at a low level.

As a solid AloT platform is the base of smart industry ecological chains, Xiaomi continues to open this interface to attract traffic and penetrate into users' daily lives. At the same time, the Xiaomi group promoted (in Chinese) the first 80s executive Gao Ziguang as the company's VP. Gao pioneered the IoT platform business of Xiaomi. Starting in 2020, Xiaomi decided to invest USD 50 billion in the '5G + AIoT' field over the next five years.