ChinaFintech — Xiaomi Finance

Xiaomi Finance, the online finance arm of smart device maker Xiaomi, accounted for 0.7% of Xiaomi’s total revenue, or RMB802 million, and 0.2% of its pre-tax net loss, or RMB83.6 million in 2017, respectively, according to its IPO filing. The total assets of Xiaomi Finance accounted for 14.1% of Xiaomi’s total in 2017.

Xiaomi is restructuring its finance business that its stake in Xiaomi Finance will decrease to 40% after it completes.

Since 2015 Xiaomi Finance has added products and services in consumer lending, consumer credit rating, online banking and insurance brokage.

Xiaomi provides consumer loans through mobile apps including Xiaomi Loans, Xiaomi Finance and Xiaomi Wallet. The loan receivables were RMB101 million, RMB1.6 billion, RMB8.1 billion as of the end of 2015, 2016 and 2017, respectively.

The consumer loan offerings include installment payment plans for the purchases of Xiaomi hardware products. Xiaomi Finance paid RMB 400,000, RMB 200,000 and RMB3.3 million to Xiaomi for hardware products sold through it in 2015, 2016 and 2017, respectively.

Leveraging the user data collected mainly from Xiaomi devices, Xiaomi Finance has developed proprietary consumer credit assessment and risk management systems. MIUI, the custom Android system pre-loaded in all Xiaomi connected devices, had 190 million monthly active users as of March 2018, according to Xiaomi’s filing. Xiaomi and Xiaomi Finance will continue to share their data with each other after restructuring.

Beijing Xiaomi Electronic Software, an affiliate of Xiaomi, has a minor stake in XWbank, a direct bank established in late 2016.

For the online payment and settlement services provided by Xiaomi Finance, Xiaomi pays fees to it. The amount was RMB40.3 million, RMB43.9 million and RMB49.9 million in 2015, 2016 and 2017, respectively.

Xiaomi Finance pays Xiaomi for online marketing services and other support services. It paid RMB9.7 million, RMB1.8 million and RMB70.8 million in 2015, 2016 and 2017, respectively, for online marketing services to Xiaomi.


Smart Device Maker Xiaomi Files for Hong Kong IPO

Xiaomi Corp., a leading smart device and internet services provider, has filed today with the Hong Kong Stock Exchange.

Source: Company

Founded in April 2010, Xiaomi launched its first Android-based smartphone in 2011 and now also sells a wide variety of connected devices either developed in-house or by affiliated companies, ranging from healthcare wearables to smart speaker.

The gross margin for Xiaomi’s hardware products only increased to 8.7% in 2017 from 4.4% in 2016. MIUI, the custom Android system pre-loaded in all Xiaomi smart devices, enjoyed gross margins higher than 60% in the last three years.

The company plans to maintain its low-cost strategy for its hardware business, promising the net profit margin for the hardware sales would not exceed 5% in the future.

The average selling price of Xiaomi smartphones was 807 yuan, 880 yuan and 881 yuan (US$138) in 2015, 2016 and 2017, respectively.

Source: Company

Xiaomi has invested in more than 90 connected devices and accessory makers, including Huami which got listed on the NYSE earlier this year. The company let many of these startups use Xiaomi’s Mi brand.

The company claims that more than 100 million devices had been connected to its internet-of-things platform as of March 2018. Some 1.4 million Xiaomi users own more than five Xiaomi hardware products.

While totally dependent on online sales channels in the early years, the company has been establishing a network of physical stores, called Mi Home, since 2015.

The top five distributors for the company accounted for 30%, 27% and 32% of the company’s total revenue in 2015, 2016 and 2017, respectively.

Xiaomi products are now available in more than 70 countries and regions, with India being one of its most important foreign markets.

Source: Company

The MIUI operating system is an important revenue source for the company.

The default apps on MIUI are all customized versions such as Mi App Store, Mi Browser, Mi Music and Mi Video. MIUI generates revenues through a wide range of marketing offerings, such as search marketing on the Mi App Store and push notifications, and consumer-facing paid content or services, mainly third-party games.

The average revenue per user (ARPU) of MIUI was 29 yuan, 48.5 yuan and 58 yuan (US$9) in 2015, 2016 and 2017, respectively.

Source: Company

Launched in August 2010, MIUI had 190 million monthly active users (MAU) as of March 2018. Xiaomi users spent an average of 4.5 hours daily in March 2018. 38 apps on MIUI had over 10 million MAUs, with 18 having over 50 million MAUs.

Source: Company

Xiaomi Finance, which provides consumer loans and investment services to Xiaomi users, accounted for 0.7% of the total revenue and 0.2% of pre-tax net loss in 2017. Xiaomi is restructuring its finance business that its stake in Xiaomi Finance will decrease to 40% after it completes.

Xiaomi’s Smart Wearable Affiliate Huami Lists in the US

Huami Corp., the supplier of Xiaomi smart wearables, has just got listed on the NYSE.

Xiaomi and Shunwei, the venture capital firm co-founded by Xiaomi founder Lei Jun, currently hold 19.3% and 20.4% of the total outstanding shares of Huami, respectively, according to its filing.

The sales of Xiaomi-branded wearable products contributed 97.1%, 92.1% and 82.4% of Huami’s total revenues in 2015 and 2016 and the first nine months of 2017, respectively. Huami depends on Xiaomi’s online and offline channels to sell both Xiaomi-branded and its self-branded products.

Source: Huami Corp.

Mi Band, a low-cost activity tracker launched in July 2014, is Huami’s signature product. Out of the total 45.3 million wearable devices Huami had shipped as of September 2017, 40 million were Mi Bands.

Activity tracking bands, including Mi Bands and those under Huami’s own brand, were the main revenue generator that contributed 81.7%, 85.8% and 73.2% of the total revenues in 2015, 2016 and the first nine months of 2017, respectively.

Xiaomi Mi Band (Image: Xiaomi)

Other products Huami makes include smartwatches, smart body scales, and accessories.

The total shipments in 2015, 2016 and the first nine months of 2017 were 14.4 million, 17.8 million and 11.6 million, respectively.

Image: Amazfit

Its own brand, Amazfit, is positioned as a premium brand as compared to Xiaomi’s Mi brand and has had a higher gross margin than that of Xiaomi-branded products since 2016. In the first nine months of 2017 Amazfit products accounted for only 4% of the total shipments but generated 17.6% of the total revenue for the company.

The accompanying mobile apps of all the hardware products claimed 49.6 million registered users as of September 2017. Huami hardware and software products collect over 10 dimensions of measurement, including heart rate, ECG, weight, body fat compositions, GPS running track, steps and sleeping duration.

The company doesn’t maintain its own manufacturing facilities but relies on a number of contract manufacturers.

China Tech Newsletter – May 9-11, 2015

The Logo of Xiaomi Finance
The Logo of Xiaomi Finance

Xiaomi users now are able to purchase financial products provided by third-party financial institutions through Xiaomi Finance, a mobile app developed by the smart device maker Xiaomi.

The first offering on the app is Xiaomi Huoqibao (Huoqi means “current deposit”), a money market fund similar to Yu’ebao provided by Alibaba’s finance arm. The Xiaomi Huoqibao fund is managed by Tiantian Mutual Funds (our translation) of E Fund Management Co., Ltd.

Apart from adding more financial products for users to purchase, Xiaomi Finance will provide loans to consumers and develop a user data-based credit scoring system, according to the company. But Xiaomi hasn’t got a license for consumer credit scoring operations yet. Currently only two internet companies, Alibaba’s Ant Financial Services Group and Tencent, have obtained a license and launched their credit scoring services.

Xiaomi led a round of investment in peer-to-peer lending site Jimubox in 2014. It’s unknown when or whether Jimubox’s offerings will be on Xiaomi Finance platform.

A number of big Chinese internet companies have established online platforms selling financial products or services by partnering with traditional financial institutions that include Alibaba’s Ant Financial Services Group, Tencent, Baidu, Sina, and

Tencent has invested RMB50 million (about US$8m) for a 7% stake in, developer of smart TV software solutions, whose clients include Chinese TV manufacturers, set-top box makers and telecom operators.

The company made RMB60.9 million (about US$10m) in revenues in 2014. A partnership with game engine developer Unity announced earlier in February aimed to introduce more games into the app platform of its smart TV solution.

Shareholders in also include electronics manufacturer TCL (its largest shareholder) and TV maker Changhong.

Tencent has had a 20% stake in Future TV Co., Ltd., the online television content business of the state-owned China Network Television (CNTV), according to an exclusive report by

Only seven companies or organizations, including CNTV, are allowed by Chinese authorities to supply online television content. Alibaba Group has reached partnership with another license holder WASU (Alibaba’s chairman Jack Ma is investor in WASU).

TAL Education Group (NYSE:XRS) has acquired, an online information and advisory service for high school students on finding a college match. TAL’s own news site on college selection will be merged into Gaokaopai. Financial terms were not disclosed.

TAL Education Group has recently also invested in the startup behind Qingqing Private Tutor (our translation), a mobile app connecting K-12 students with private tutors. Last month Qingqing announced US$15 million Series B round of funding led by Sequoia Capital and joined by returning investors IDG Capital Partners and TBP.

Features of the app include locating registered tutors based on distance, tutoring session scheduling, rating tutors, among others. It’s currently only available in two cities, Shanghai and Guangzhou.

Miaozhen Systems,  a marketing tech solution provider, announces US$50 million in Series D round of funding from Primavera Capital. Founded in 2006, the company claims to be powering P&G, Microsoft, Volkswagen, L’Oreal, Coca-Cola, YUM!,Yili, Mengniu, Suning and Midea in digital marketing.

Application performance management (APM) solution provider OneAPM announced RMB165 million (about US$27m) Series C round of funding led by Chengwei Capital and joined by Matrix Partners China and Qiming Ventures. The company’s service was launched in July 2014.


Tim Cook is in Beijing announcing new environmental initiatives in China.