The total revenue of Xiaomi Group in 2021 will reach 328.3 billion yuan, a year-on-year increase of 33.5%; the adjusted net profit will reach 22 billion yuan, a year-on-year increase of 69.5%.
As the main revenue mobile phone business, smartphone shipments in 2021 will be 190 million units, a year-on-year increase of 30%. According to Canalys data, its smartphone shipments ranked third in the world, with a market share of 14.1%.
There are also hidden worries under the high performance growth. In March of this year, news of Xiaomi’s layoffs came out, and a large-scale abolition of the non-mobile phone business ecological chain was carried out. However, Xiaomi responded that there have been no layoffs so far.
Xiaomi, which is betting on the popularity of smartphones, has expanded rapidly since its establishment in 2010, creating a huge ecological chain covering hardware products such as TVs, laptops, smart home appliances, wearable products, as well as software services such as finance and Internet advertising.
Xiaomi’s multi-point blooming model is facing adjustment after the group founder Lei Jun decided to build a car. With limited resources, Xiaomi is shrinking non-key businesses in the ecological chain and accelerating the new business of car manufacturing.
The first to be hit is the financial business that is weakly related to Xiaomi’s mobile phone business.
According to Caixin reports, due to business adjustments and changes in the market environment, Tianxing Digital, Xiaomi’s financial business, planned to reduce its original 900-person team by one-third a year ago, and the original seven business lines were only retained in the rising period. supply chain finance, consumer finance and other major businesses.
Tianxing Digital responded that the team did not shrink. However, he also admitted that the organizational structure will be adjusted in the fourth quarter of 2021, and related business lines will be integrated into the digital industry finance department and the digital retail finance department.
On Xiaomi’s official recruitment website, as of March 30, there was only one recruiting position for Tianxing Digital. By comparison, Xiaomi Group posted 115 jobs in March.
Internet finance was once a key business of Xiaomi. As early as the beginning of 2017, Internet finance was one of the five core strategies of the year.
Times have changed, and under the strong supervision, Xiaomi’s Internet financial business development is not satisfactory.
According to the financial report, in the fourth quarter of 2021, the revenue of Internet service business including finance and Internet advertising was 7.3 billion yuan, accounting for only 8.5% of the company’s total revenue.
In this regard, Xiaomi explained that it was mainly due to the decline in the overall consumer loan balance of the financial business. That is to say, the demand for consumer loans of Tianxing Digital has declined.
As early as the first quarter of 2021, Xiaomi has stated in its financial report that the financial technology business continues to strengthen risk control and actively control the scale of loans.
For its ecological chain enterprises, Xiaomi is also adjusting. In November 2021, two of Lei Jun’s companies reduced their holdings in the leading company of intelligent balance car No. 9. A month later, as one of the earliest investment companies in the Xiaomi ecological chain, Zimi, Xiaomi Technology Co., Ltd. withdrew from the ranks of its shareholders.
At the same time, Lei Jun intensively resigned from the positions of legal representative and executive director of several affiliated companies of Xiaomi. In response, Xiaomi executives responded that Lei Jun’s energy is mainly on matters related to car building, and the executives can share related work and responsibilities.
By 2022, Xiaomi will continue to withdraw from ecological chain enterprises. Stone Technology announced in February that Xiaomi’s investment company will reduce its holdings again because of its own capital needs.
Whether it is shrinking non-main business or withdrawing from some ecological chain enterprises, Xiaomi is likely to prepare for car building.
Build a car
On the one hand, it is reducing its shares in the original ecological chain enterprise, and on the other hand, Xiaomi has set out to establish a new automobile ecological chain.
In August 2021, Xiaomi announced that it would acquire Deep Motion, an autonomous driving technology company, at a price of US$77.37 million (about 500 million yuan).
In the same month, Xiaomi strategically invested in AI Parking, an AI smart parking startup, and Geometric Partners, a startup in the field of autonomous driving.
At present, Xiaomi has invested in auto-related companies, including lidar manufacturer Hesai Technology, Honeycomb Energy in the battery field, Ganfeng Lithium Battery, Weilan New Energy, and PATEO in the Internet of Vehicles.
In the smart car business, Xiaomi has adopted a method of high investment and progress. Lei Jun said that Xiaomi’s auto business will invest 10 billion yuan in the first phase, and it is expected to invest 10 billion US dollars in the next 10 years.
When he proposed to build a car in March 2021, Lei Jun said that a team of 300 people had been formed. Six months later, the automotive business team has more than 500 members. By March 2022, Xiaomi’s R&D team alone has exceeded 1,000 people.
The Xiaomi team has gathered a group of mobile phone business executives who have fought victoriously. In addition to Lei Jun personally serving as the CEO of the auto company, the core executives also include Xiaomi co-founders Liu De and Hong Feng, as well as the introduced Xiaomi Group President Wang Xiang and Xiaomi China President Lu Weibing.
Xiaomi is also accelerating the construction of an auto factory. According to public information, the Xiaomi car factory is located at the Majuqiao Intelligent Manufacturing Base in Yizhuang New City, Beijing.
In the smartphone market, Xiaomi played the role of a “pioneer”. Now, with the experience of new car-making forces such as Weilai and Xiaopeng, Xiaomi has a successful path to refer to.
However, Lei Jun built a car at this time and was considered to be late in the game. Xiaomi Auto is expected to begin mass production in the first half of 2024. There are still two years before the market, will Xiaomi miss the dividend period of the rapid growth of new energy vehicles?
According to the data of the China Automobile Association, the production and sales of new energy vehicles in 2021 will both increase by 1.6 times year-on-year.
For the auto business, Xiaomi can rely on or be a fan of Xiaomi.
In the smartphone market, Xiaomi’s main business, growth has stagnated. According to Strategy Analytics, global smartphone shipments will grow by only 1% year-on-year in 2022, and the growth rate is expected to increase to 3% by 2023.
The 30% contrarian growth rate of Xiaomi mobile phones in 2021 is partly due to the market vacated by Huawei mobile phones. However, it is obviously not easy to maintain such a growth rate for a long time under the competition of many leading brands.
Therefore, in the new business of automobiles, Xiaomi cannot lose. Xiaomi executives said that in 2022, it will continue to invest more research and development funds in high-end mobile phones and cars.