According to industry sources, Huisen Household International (HKG:2127) has formed a strategic partnership with Xiaomi Group (HKG:1810) to jointly develop smart home business in various application scenarios, including office, hotel, apartment, elderly care institutions, educational institutions, and households, etc.
According to the sources, Huisen will develop a smart furniture plan to combine with Xiaomi’s IoT platform in terms of product development and marketing, and both parties will jointly carry out a business partnership of smart pre-renovation (providing smart home solutions before the actual renovation) and smart renovation. Meanwhile, Huisen’s smart furniture products will be showcased in Xiaomi Smart Life Experience Pavilion.
This partnership demonstrates Huisen’s prosperous expectations of its smart home business. Huisen’s interim financial results reveal that the company will strive to gain insight from market trends and make timely adjustments to the business strategy to expand its business coverage, including research and development investments in smart home products to accelerate the company’s growth.
Market expects that the partnership with Xiaomi will be a new driver of its revenue. As one of the renowned household brands with the highest consumer awareness, Xiaomi has developed a strong advantage in the field of the smart home. As of June 30, 2021, the number of smart devices connected to the Mi IoT platform reached 375 million, a year-on-year increase of 34%. In June 2021, the monthly active users of AI assistant, Xiaomi’s version of voice intelligent assistant, exceeded the 100 million mark for the first time, reaching 102 million. The monthly active users of “Xiaomi Home” App increased to 56.5 million, a year-on-year increase of 38.6%, making it the world’s largest consumer IoT intelligent internet platform.
A research report from Guotai Junan Securities addresses, the medium to long-term outlook, smart home is another intelligent smart scenario besides smart vehicles. At present, the market penetration rate of a smart home is about 10%, implying a transition of the smart home industry from the leading-in stage to the growth stage. It is expected that the breaking out period will come soon, with an expected market size exceeding RMB 1.3 trillion.
The concept of a smart home comprises a wide range of products and services. Market participants in the industry have their niche advantages and may eventually differentiate into specialized aggregations. “Smart Home Products + Operational System and Ecosystem + Customized Solution” is the key model of smart home, where manufacturers provide smart products, technology/Internet companies develop operating systems, and system integrators provide customized smart home solutions.
Based on the above model and the analysis of the partnership, Huisen will focus on the development of smart products and personalized solutions. Huisen Group intends to establish an R&D centre in Dongguan city, Guangdong province, which will have in-house research, design, testing, and an exhibition hall to display the functional and smart home products. Furthermore, the R&D centre will carry out an in-depth partnerships with colleges and universities, such as Jiangxi University of Science and Technology, Jiangxi Institute of Environmental Engineering to enhance and integrate the innovation mechanism of business and academic research.
As the largest panel furniture exporter in China, Huisen is one of the long-term major suppliers of Fortune 500 Retail Groups, including Walmart and The Home Depot. Its core competence relies on the vertical integration of the supply chain management; including R&D, manufacture, quality control, diversified sales channels, and competitive market prices, which were accomplished by its experienced management team with sophisticated industry know-how. Meanwhile, Huisen Group has implemented the ESG management concept, and its zero-formaldehyde and negative oxygen ion products are aligned with the strict international standards.
Analysis points out that panel furniture is favored by the new generation of consumers for its advantages such as easy assemble and disassembly, rich in designs, flexibility in size, and cost-effectiveness. These characteristics resonate with the genes of Xiaomi’s product lifestyle, a relentless pursuit of quality and value. Xiaomi and Huisen intend to build a new scenario of whole-house intelligence, which is expected to further fire up the market’s imagination and anticipation of Huisen Group’s future endeavor.