At the China-Israel Investment Summit in Zhuhai earlier this year Xiaomi boss Lei Jun delivered the keynote speech, but spent surprisingly little time discussing his brand’s flagship smartphone products. Instead he told the tale of a different item in his catalogue: the rice cooker.
Lei explained that he once put it down to superstition that so many Chinese believe that Japanese rice cookers are better. However, after a thorough investigating, he found they truly were. So his team broke down the components of one of them and spent months ensuring they could produce each element to the highest standard to make the best rice. At Rmb999 ($151.75) Lei also ensured it was priced far cheaper than its Japanese equivalents (a Zojirushi one can cost upwards of $400).
The message to the conference was that Xiaomi employs the same methodical approach to all of its product lines, ensuring every element is the best it can be.
Having mastered the rice cooker, Xiaomi has turned its attention to another emblem of Japanese excellence: the Japanese-style toilet seat. Xiaomi’s “smart seat” is the latest in its line of home appliances. Featuring a bidet function and heating, the new product is further evidence of Xiaomi’s ‘superior technology’, the company claims.
But superior to what? Again it is the Japanese brands that are the benchmark. Scenes posted online of Chinese tourists flooding Japanese stores to buy toilet seats are a common staple during Chinese holiday periods. And strangely, the seats rank among the key products highlighted by Beijing’s “Made in China 2025” masterplan. The blueprint envisages that Chinese firms will graduate from being lower-end producers to high-tech manufacturers and innovators in less than a decade. And in April last year, the government outlined a few of the consumer products that need to be mastered. The first three are air purifiers, rice cookers, and ‘smart’ toilet seats.
So it would seem that Xiaomi is working its way through the list, having also produced higher-tech air purifiers since 2014.
The company is launching the household items under the banner of ‘smart hardware’ and says the division is determined to “promote an upgrade in Chinese manufacturing with a new concept of ‘Made in China’ products.”
Xiaomi still has to convince its Chinese rivals that it is up to the task, especially Zhuhai-based Gree, the world’s largest producer of residential air-conditioners.
Gree’s president Dong Mingzhu has poured scorn on Xiaomi’s ambitions and she and Lei have an ongoing feud, alongside a much-discussed bet on which company will have the highest turnover by the end of this year.
When India banned the sale of a Xiaomi smartphone model – after Swedish-firm Ericsson filed a complaint about a patent violation with an Indian court – she warned that further blacklisting was inevitable, because Xiaomi “steals others’ patents”.
How can Xiaomi then be called “a great company?” she was said to have queried.
More of Dong’s stinging assessments were picked up by domestic media when monitors on some of Xiaomi’s air purifiers were said to be showing cleaner air even when the machines were running without filters. According to the People’s Daily, a Japanese company with whom Xiaomi had previously sought a partnership also accused the Chinese firm of plagiarising its air purifier designs. Last year one of the models failed a Shanghai quality test too (see WiC311).
Lei Jun doesn’t seem fazed by the more negative headlines. During the Israel-China Summit he declared that Xiaomi’s air purifiers were “number one” in China – perhaps a jab at Dong, who had taken the stage at the event an hour earlier. All the same, Xiaomi’s founder will be hoping that his new toilet seats don’t stir the same controversy.
And Lei has also made plain that he plans to steer clear of another source of potential discord: public investors. According to CNBC, he told last year’s Summer Davos in Tianjin that Xiaomi wouldn’t be considering an IPO until 2025, the same year that the Made in China masterplan is supposed to be paying dividends in manufacturing excellence. Lei’s extended timeframe suggests that he realises there is much work still to do. “We believe Xiaomi needs to be trusted by consumers from the bottom of their hearts,” he admitted.
© ChinTell Ltd. All rights reserved.
Brought to you by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.