Xiaomi and Midea aim at the 100 billion US dollar smart home market

On the evening of December 14, Xiaomi and Midea Group simultaneously issued announcements, announcing that Xiaomi Technology will reach a strategic cooperation with Midea Group. Xiaomi Technology invested 1.266 billion yuan to acquire a stake in Midea Group, and Midea Group will issue 55 million shares to Xiaomi Technology at a price of 23.01 yuan per share, raising no more than 1.266 billion yuan.

The announcement stated that the two parties will carry out in-depth strategic cooperation in various modes in the fields of smart home and its ecological chain, and mobile Internet business, and connect the cooperation teams of both parties in the fields of smart home, e-commerce and strategic investment.

Everyone has their own goals and everything will come true.

Judging from this cooperation, the goals of both parties are simple and direct: Xiaomi wants to further improve its smart hardware ecosystem, while traditional manufacturing company Midea urgently needs to inject Internet genes. Before the official cooperation was reached, both parties invested "real money" in the established goals.

Let’s first look at Xiaomi. As we all know, since the release of Xiaomi TV and Xiaomi router, smart home has become the “next trend” in Xiaomi’s eyes. Lei Jun once clearly stated at an internal sharing session: “This is the next market worth hundreds of billions of US dollars.”

Xiaomi has been making intensive layouts before. The release of the smart router can be regarded as a critical point for Xiaomi to enter the smart home field. In the more than half a year since then, Xiaomi has released a series of products including Xiaomi TV 2, Xiaomi bracelet, Xiaoma camera, Xiaomi blood pressure monitor, Xiaomi air purifier, etc. With mobile phones as terminal controllers and routers as entrances, Lei Jun's plan to layout smart homes is accelerating.

Let's take a look at the old home appliance manufacturer Midea. In March this year, Midea Group announced its strategic vision and action plan in the field of smart home. In the future, it will transform from a traditional home appliance manufacturer to a smart home enterprise. It also announced the implementation of the "Smart Butler System + M-Smart Interactive Community + M-BOX Management Center" strategy and launched four smart home butler systems: air, nutrition, water health, and energy security.

In addition, Midea has also cooperated with Alibaba, JD.com, Huawei and others to build an open smart home application system. In March, Midea and Alibaba Cloud signed an agreement to reach a framework cooperation intention on building a cloud platform-based IoT smart system and big data applications. These are seen as signals that Midea, a traditional home appliance manufacturer, is further transforming towards the Internet.

Facts show that as long as one party extends an olive branch, the other party will definitely take the initiative to "return their body to the other party". As domestically powerful Internet companies and home appliance manufacturers, both parties will play a driving role in the smart home market.

The concept of smart home may be rewritten

According to the latest research by Juniper Research, by 2018, the total size of the smart home market will reach US$71 billion; in 2018, the size of China's smart home market will reach 139.6 billion yuan, accounting for approximately 32% of the global total.

Although the market is huge, the status of the domestic smart home industry is not satisfactory. At the end of last year and the beginning of this year, after a brief spring, the smart home market entered a bottleneck period due to issues such as platform, cost, and consumer acceptance, and eventually formed a situation of "hot inside and cold outside".

Both domestic hardware manufacturers and Internet companies are trying to build a unified smart home platform to allow other brands to access their own platforms, and ultimately enable users to enjoy the real Internet of Things. However, for the sake of the company's own interests, it is difficult to see results in either building a platform or connecting to WiFi.

Liu Buchen, an analyst in the home appliance industry, believes that Xiaomi's partnership with Midea will have a relatively large impact on the home appliance industry and will also have a relatively large sensational effect. It will have a positive impact on both Midea and Xiaomi. For Xiaomi, it means entering a new hardware field, and the products can be manufactured by Midea; for Midea, because of the strategic cooperation with Xiaomi, it highlights its Internet enterprise characteristics, which will promote Midea's smart home strategy.

Xiaomi's mobile phone control terminal, WiFi module and low-cost killer feature, and Midea's manufacturing line and brand awareness, after the marriage, both parties will have a platform and manufacturing. After integrating the big network of home appliances and Internet industries, the domestic smart home field will enter a new stage.

Liu Buchen believes that Haier has already reached cooperation with Alibaba, Hisense has reached cooperation with Google and other Internet companies. If Midea cooperates with Xiaomi again, it will play a greater role in accelerating the intelligent transformation of China's home appliance industry.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.