"My dream is to promote the progress of China's manufacturing industry and let consumers enjoy the fun of technology at a very cheap price."
This is Lei Jun's expectations for xiaomi and rice companies.
Dream back to the summer of 2013, the concept of ecology, for the first time appeared in millet. At that time, Lei Jun believed that the ecological chain company must start from the mobile phone peripheral, and the first hardware to be done is the charging treasure. Half a year later, the first non-Xiaomi production, but affixed with "MI" label products on the Xiaomi official website on sale. 10000mAh charging treasure, but sold 69 yuan at a very low price, compared to the market price of 2-3 times, the concept of millet ecology officially launched.
After tasting the sweetness, Xiaomi decided to officially step into the rice ecological chain. According to statistics, as of 2020, the Xiaomi ecological chain has expanded to 400.
Huami, No. 9, and Stone scrambled to escape, and "de-milletization" became a trend.
What Lei Jun did not expect was that while taking advantage of the popularity of millet, the rice ecological chain enterprises were also thinking about how to stand on their own portals.
Such signs are not difficult to spot. After the development of many enterprises to a certain scale, they have also launched their own brands. For example, Huami Technology released its own brand Amazfit in the second year of the launch of the original Xiaomi bracelet; Stone Robot also launched its first self-brand product in 2017 - Stone Sweeping Robot.
Among them, Huami's self-reliant portal is particularly significant. Huami's financial report shows that in 2016, Xiaomi wearable products accounted for 92.1% of Huami's total revenue, and two years later, Huami acquired the core assets of smart wearable brand Zepp, and it was also this year that Xiaomi wearable products fell to 66.9% of Huami's revenue. In the quarterly report, Huami has also been emphasizing that Xiaomi's wearable product shipments have been declining, while its own brand shipments are growing at a high speed.
Also fleeing was Company Nine. As a manufacturer of sports intelligent equipment such as balance bikes for Xiaomi, No. 9 Company directly clarified its relationship with Xiaomi in the prospectus - "The company does not belong to the typical ecological chain enterprise defined by Xiaomi." ”
The same is true of Stone Technology. In stone technology's prospectus, from 2016 to 2017, and in the first half of 2019, revenue from millet accounted for 100%, 90.36%, 50.17% and 43.01% of stone technology's total revenue. Since the launch of the self-owned brand stone sweeping robot of Stone Technology in 2017, the income of its own brand has gradually increased, and "de-milletization" has become a trend.
In 2013, Lei Jun also gave a prediction of where the next opportunity would be: "The first stage of the Internet, the second stage is the mobile Internet, and the third stage is the Internet of Things." Each stage is a trillion-level outlet. In this way, the direction of Xiaomi's efforts has always been more purposeful. But as the intelligent ecological market gradually heats up, more and more enterprises begin to lay out the ecology, how should the Xiaomi ecological chain write the next chapter?
Enterprises in the Xiaomi ecological chain are facing a more embarrassing situation
The embarrassing dilemma may be the best interpretation of the rice ecological chain enterprise.
It should be admitted that in Xiaomi's sales channels and cost-effective sales model, enterprises within the Xiaomi ecological chain have indeed obtained better starting resources for suppliers, channels and brand traffic resources. However, Xiaomi ecological chain enterprises are also facing great difficulties and hidden worries.
First of all, ecological chain enterprises also have a "chain of contempt". Liu De, former head of xiaomi's ecological chain, once said, "Do it early when you are closer to the mobile phone, dry late from the mobile phone, dry early when you are close to the user, and dry late when you are far away from the user." This means that the more products related to Xiaomi's mobile phone business, the easier it is to obtain better development resources, while relatively marginalized products are less dominant in the creation of ecology and the expansion of user scale." It has caused the embarrassing model of "mobile phone peripheral products are the first power point, intelligent hardware is the second power point, and the third is life consumables".
Enterprises that have better linkage with mobile phones, such as Huami, which produces Xiaomi bracelets, and Wanmo Acoustics, which produce Xiaomi headphones, have always been jokingly called Xiaomi's concubines, and can often get exposure at Xiaomi conferences, and occupy the key recommendation position of Xiaomi's official mall for many years. In contrast, daily consumables such as mattresses and water purifiers and products with weak perception face more crises in comparison.
Secondly, the similarity of design languages also makes it impossible for brands to form memory points. At present, various products that exist in the Xiaomi ecological chain have a relatively unified design style. For consumers, enterprises that are also within the Xiaomi ecological chain do not pay attention to the differences. But in fact, there are different ecological chain companies behind different products, and the relationship between these companies and Xiaomi is not the same. Even though the company relies on Xiaomi to have better sales and supplier resources. But when the company loses the support of xiaomi, it means that the company will be beaten back to its original form.
In addition, due to Xiaomi's pursuit of the ultimate cost performance, whether it is an ecological chain member or Xiaomi itself, the profits that can be obtained are not high, but the Xiaomi ecological chain enterprises prefer to get higher reasonable profits when developing their own brands, which will cause a certain conflict between the two.
From the perspective of docking the capital market, the enterprises in the Xiaomi ecological chain are facing a more embarrassing situation. In 2021, the two companies that are also Xiaomi's ecological chain have ushered in a completely different fate in the stage of sprinting IPO: Fun Sleep Technology is moving towards the door to listing, while Yilai Intelligence is rejected and terminated the IPO. Judging from the prospectus, this is much the same as Xiaomi's dependence, and the binding degree with Xiaomi's business exceeds more than 50% of its total revenue. The difference is that the development of Fun Sleep Technology's own brand is the early layout.
Xiaomi gradually returns to "sanity"
Obviously, the smart home ecological chain is no longer the stage where Xiaomi flourished before, and various Internet companies, traditional home appliance manufacturers, and even smart phone manufacturers have begun to lay out their own ecosystems. In such a market environment, the early advantages created by Xiaomi have long ceased to exist.
At the same time, the shortcomings of Xiaomi's ecological chain products have also begun to stand out, that is, while winning the cost performance, they have lost word of mouth. Not only is it lacking in terms of professionalism and maturity of the product, but it often loses to some big-name products of the same price in terms of function and quality. Xiaomi does not seem to have figured out that for users, the importance of functional innovation is far less important than the quality and longevity of the product itself. As a response to users and the market, naturally more and more rice companies began to flee.
According to Xiaomi's third quarter 2021 financial report, Xiaomi has invested in more than 300 IoT ecological chain companies. But in fact, nearly half of the ecological chain enterprises are invested and incubated around 2019. According to the data, as of 2019, Xiaomi has invested in and incubated more than 210 companies, more than 90 focusing on smart hardware. Obviously, the growth platform period of the Xiaomi ecological chain has arrived.
In the face of the company's escape and the improvement of independent awareness, Xiaomi naturally began to realize the problem. Compared with the previous "crazy" expansion of the ecological chain, Xiaomi has gradually returned to "sanity" and slowed down the development of ecological chain enterprises.
But the root of the problem is that in the new competitive environment, "chopping acquisition" has become a thing of the past, are users and manufacturers still willing to pay for Xiaomi's competitive model? When the outlet began to turn, the story of Xiaomi should be told from the beginning in a different way.