Welcome to the third and final leg of our tour through Digital China.
Our next stop in Beijing was
Xiaomi (Xiǎomǐ 小米). Maybe this is a company that needs less of a formal introduction, first, because its mobile phones are already selling quite well in overseas markets and, second, they have started opening
Mi Home stores in Europe and thus receiving wider press coverage in those regions. We were welcomed to the Xiaomi headquarter in Beijing by their international BD team led by Sandy Guo.
Xiaomi is famous in China foremost for its legendary founder and CEO,
Mr. Lei Jun, who already has a number of successful startups and exits under his belt. Xiaomi started out as a mobile phone company by, admittedly, borrowing heavily from iPhone’s design philosophy - only sold at a much cheaper price points to China’s masses. Copying also Apple’s retail strategy
they now have hundreds of stores worldwide, which still look much like the original.
Following in the footsteps of its early success with mobile phones, they have since been trying to build out an
entire ecosystem of very cool home products ranging, from TV sets, to air conditioners, water purifiers, air purifiers, digitally-enabled light bulbs, robot vacuum cleaners, and many more. Only a
fraction of those products get sold outside China. The idea behind this otherwise low margin business is to become an - what they called in their pre-IPO prospectus -
internet service company. Based on their current stock price and revenue break-down, it seems they are still some distance away from this lofty goal.
Just last week Xiaomi released more info on a
planned offensive for the German market - trying to capitalize on the recent troubles of rival Huawei. So, in the near future we can start watching Xiaomi from up close.
By the way, Xiaomi means
Little Rice in Chinese and refers to a main staple of Chinese food subtly hinting at how important their products are for one’s daily life. If you want to know a bit more on the historical background of Xiaomi, please check this
link.
After our Xiaomi visit, we went straight to the close-by offices of Horizon Robotics. Truth be told, this unicorn startup is one of those gems why digital discovery trips to China can be so valuable and insightful.
Started by Mr. Yu Kai, a graduate of the Technical University of Munich and one of the top AI scientists China has. He founded Baidu’s Institute of Deep Learning (IDL) and led the first autonomous driving project in China. At the Horizon HQ we were greeted by Gian-Marco Brizzolara, a recent Tsinghua Schwartzmann College graduate, one of the first foreign hires of the young company and a significant indicator of how Chinese tech companies these days eye global expansion early.
The company’s main area of expertise is AI edge computing with a focus on 2 use cases: autonomous driving and smart retail.
Edge computing means the ability to process data right there where the action is without the need to first upload data into the cloud thus creating lower latency, but also requiring extremely small and fast processing power. It also meant that the company had to develop their own AI edge processor since nothing of that capacity was on the market yet.
Just to give a few examples of the sheer processing power needed, especially in the areas of autonomous drive and retail, which is where the company is mostly focussed upon: An autonomous-driving vehicle typically generates 600-1,000 TB of data per day and it requires 16,000 trillion calculations on a typical paved road per day to support autonomous driving. Besides their own AI processor, Horizon Robotics is also developing in-house their own superior AI algorithms to be run seamlessly on their chips.
However, it is in the area of smart retail deployment where the company is driving significant revenue today. It helps retailers like the French Beaumanoire Group, Belle Shoes or YH Supermarkets to digitize their retail stores by using smart cameras enabled by edge AI processors. Typical applications are traffic counting and qualification as well as customer path discoveries and resulting in-store zoning recommendations.
Since facial recognition is at the core, the company is making sincere and conscientious efforts to consider the legal and psychological ramifications of an entry into the Western markets. It remains to be seen what the current trade / tech war means for this promising startup.