Xiaomi Targeting Korean Home Appliances... The Secret to Cost-Effectiveness is the 'Eco Ecosystem'

New Products Unveiled Including Humidifiers and Electric Kettles
Over 1,600 Product Lines Secured
Domestic Distributor and Jimobi Also Join

[Asia Economy Reporter Han Jinju] Xiaomi is expanding its lineup of small home appliances. With its vast product range, Xiaomi is making efforts to bypass the high entry barriers of the smartphone market and target the Korean market through small home appliances.

On the 13th, Xiaomi launched a smart sterilizing humidifier in Korea and started pre-orders. New products such as electric kettles suitable for the autumn and winter seasons are also scheduled to be released on the 15th.

This year, Xiaomi released two smartphone models in Korea: the Redmi Note 9S and the Mi 10 Lite. The Mi 10 Lite, the first foreign 5G smartphone launched in Korea, was also introduced to SK Telecom's offline stores starting from the 12th. Compared to the Redmi Note 9S, which targeted a niche market at around 200,000 KRW, the Mi 10 Lite was launched at around 400,000 KRW but showed poor sales performance.

SK Telecom raised the official subsidy for the Mi 10 Lite to 390,000 KRW just two months after its release. Xiaomi's challenge to capture the 5G market ultimately ended in failure. The domestic smartphone market is dominated by local manufacturers, and it will take more time to overcome the distrust of Chinese smartphones among Korean users.

Xiaomi's 'Cost-Effectiveness' Secret Lies in Its Eco Ecosystem

Xiaomi is increasing its market share and recognition in Korea by focusing on its eco ecosystem product lineup. Xiaomi has lowered prices by maximizing contract manufacturing, reducing distribution costs through online channels, and operating a platform that reflects consumer feedback. Since 2013, Xiaomi has invested early in ventures and startups to target the Internet of Things (IoT) market, building a vast Xiaomi platform.

Companies within the Xiaomi ecosystem use the know-how transferred from Xiaomi to launch hardware products under the Xiaomi brand. This is the secret behind Xiaomi having over 1,600 product categories, including wearable devices, smart home appliances, air purifiers, and water purifiers. The representative product Mi Band is manufactured by Huami Technology, and power banks are made by Zimi Technology; both companies have grown into unicorns leveraging Xiaomi as a stepping stone. Xiaomi outsources the production of most home appliances except core devices like smartphones and listens to consumer feedback to reflect it in actual product development, cultivating a Xiaomi fandom in China.

Targeting Korea with Eco Products, Expanding Distributors

This year, Xiaomi released various products in Korea, including the Mi Band 5, fans, photo printers, home cameras, and wireless earphones. Air purifiers and robot vacuum cleaners were introduced earlier and were priced at more than half cheaper than domestic products. Steven Wang, Xiaomi's General Manager for East Asia, said, "Korea is a country very familiar with products beyond smartphones," and added, "We plan to unveil more than 20 AIoT (Artificial Intelligence of Things) products in Korea."

As domestic distributors handling Xiaomi products expand, distribution channels are expected to grow as well. Gimobi Korea, which had exclusive distribution rights for Xiaomi smartphones until last year, recently renewed its contract with Xiaomi for home appliances and smartphones distribution. Since early this month, it has started selling Xiaomi home appliances through its own shopping mall, open markets, and large supermarkets, and plans to begin smartphone sales next year. Currently, Xiaomi has three distributors in Korea: Korea Technology, Yeoumi, and Gimobi Korea. An industry insider explained, "Distributors will divide distribution channels to sell products, and there will be no additional Xiaomi smartphone releases within this year."

This content was produced with the assistance of AI translation services.