Completion of the Mi Ji smart home "big puzzle" ambition

Once again, Mijia has entered the air conditioning sector, but this time it's taking center stage rather than staying behind the scenes. Unlike two years ago when Mijia's air conditioners lacked detailed specifications and other information, this time it's undoubtedly a key product in the Mijia lineup.

Mijia's Air Conditioning Comeback

For Mijia's entry into the air conditioning market, the industry generally views it as having little impact on the overall market landscape. However, Mijia's primary goal isn't to compete for sales directly. Instead, its more significant aim is to complete the "big puzzle" of smart home systems through smart air conditioning solutions.

From Old Beauty to New Life with Changhong

This isn't the first time Xiaomi has attempted to enter the air conditioning industry.

As early as two years ago, Xiaomi teamed up with Gree to launch the "i Youth Smart Air Conditioner," which was marketed as the "first air conditioner for young people." It boasted features like "one-step connection," "one-key operation," and "one-hand control." The air conditioner could even sync with the Mi Band to automatically turn on upon returning home and switch to sleep mode after falling asleep. Priced at 3099 yuan, it didn't quite make waves.

In the past three years since the strategic cooperation between Xiaomi and Gree, there hasn't been much synergy in actual business operations. It seems the joint air conditioning products didn't cause much disruption either. Meanwhile, Xiaomi has continued to expand its range of smart home products through Mijia, including air purifiers, rice cookers, laser projectors, balance scooters, and electric toothbrushes. These moves have directly impacted the established players in the smart home market.

Insiders have pointed out that these conflicting interests have made Xiaomi's separation from Gree a necessity.

The failure of the first attempt didn't deter Xiaomi from pursuing air conditioning. Last year, Xiaomi sought a professional team in the air conditioning industry and aimed to develop the technology and supply chain to prepare for its second entry into the air conditioning market.

After a long partnership with Gree, Xiaomi shifted its focus to Changhong, which is rapidly expanding in smart homes and artificial intelligence. They hope to leverage Changhong's technical expertise to ensure the quality of Xiaomi's air conditioning products.

For Xiaomi, which operates with a lightweight asset model and focuses on intelligence, Changhong's strong air conditioning technology and manufacturing capabilities, coupled with its pursuit of innovation, are invaluable assets.

"It's Not Easy to Be Born."

For Xiaomi's move into the air conditioning market, there are netizens who mock: Xiaomi entering the air conditioning market is akin to Gree venturing into mobile phones. There's no real threat, and nothing much can change. In the air conditioning market dominated by Gree and Midea, which together account for nearly 70% of the market share, Xiaomi, as an outsider, faces numerous challenges.

"Mijia doing air conditioning and its home appliances like purifiers don't have their own factories; instead, they opt for OEM with a strong partner like Changhong, which is the most efficient way to enter the air conditioning market. However, air conditioning is a capital-intensive industry. Without production and R&D capabilities, Xiaomi's room for growth will be limited. Additionally, after-sales services, maintenance, and installation are crucial in the air conditioning industry, areas where Xiaomi cannot quickly establish a robust system. Thus, it will be challenging for Xiaomi to capture a significant market share in this sector," industry experts remain skeptical about the future of Mijia air conditioners.

Manufacturers' attitudes toward Xiaomi's entry are calm. Gree air conditioning insiders stated, "We welcome competition, but giving birth is not easy." Midea air conditioning insiders echoed this indifferent stance.

Liu Jiebo, Deputy Secretary-General of the China Electronic Chamber of Commerce, believes that initially, Mijia might succeed in entering the air conditioning market. However, competing with Gree and Midea is unnecessary. "Neither in terms of company size nor current air conditioning sales can Xiaomi compare to Gree and Midea. It's similar to how Gree's mobile phones can't match Xiaomi's mobile phones."

Air Conditioning Market 'Catfish'

However, from another perspective, Xiaomi could also be the 'catfish' stirring up the air conditioning market.

It's rumored that this inverter air conditioner from Xiaomi will target the younger generation of renters and emphasize affordability. Based on current market conditions, the price of Mijia's inverter air conditioner is expected to be around 2000 yuan, at least 500 yuan cheaper than similar products. By following its consistent value-for-money approach, Mijia hopes to spark users' purchasing desires. Although it lacks its own air conditioning factories and after-sales service systems for now, it could potentially trigger a price war in the market to gain more users.

"The design and functionality of Xiaomi's products are exquisite, and the pricing is very competitive. Coupled with its always eye-catching brand marketing prowess and a loyal fanbase, it's possible for Xiaomi to succeed in air conditioning," Liu Jiebo believes that Changhong's manufacturing capabilities and product quality are beyond doubt. As Changhong continues to grow, Xiaomi's brand will complement each other well.

Zhang Yanbin, Dean of the Ovid Consulting and Research Institute, also believes that Xiaomi's entry brings certain benefits to the air conditioning industry. As an internet brand, Xiaomi can introduce internet thinking into this industry and inject fresh energy into an already saturated market. He believes that Xiaomi's marketing strategies and user-centric approach are worth learning for traditional manufacturers, especially now that the O2O model is gaining traction. Manufacturers are increasingly integrating with e-commerce, focusing on online platform sales, offline distribution and installation, and after-sales services. This makes it harder to install air conditioning units.

Mi's Smart Home Ambition

Xiaomi's entry into the air conditioning industry is more like a milestone in its smart home strategy.

Three years ago, Xiaomi began laying the groundwork for the smart home market. To create a comprehensive ecosystem and facilitate the marketing and unified management of the companies it invests in, Xiaomi launched the "Mijia" brand last year, covering almost all hardware peripherals and household appliances, even extending to clothing and footwear.

Entering the air conditioning market is a significant step for Xiaomi's "white goods" segment. Like many other in vitro incubated products, Xiaomi's main短板 remains its technical and after-sales service channels due to its跨界 operation within the smartphone ecosystem chain. That's why it has sought partnerships with veteran home appliance companies twice.

From the current product line of Mijia, the main offerings are peripheral hardware and some small household appliances, known for their high cost-effectiveness and market respect. Now with the introduction of air conditioning products, it's clear that Xiaomi is determined to close the gaps in smart home products to fulfill its ambition of Mi Jia products dominating every corner of young families.

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