Lessons from Xiaomi’s Development: What Instrument and Meter Companies Should Pay Attention To (Part 2)

Thread Content

　In the article \"How Can Instrument and Meter Manufacturers That Have Been in Business for Eight Years Replicate Xiaomi’s Success (Part 1)\\", the importance of pricing, quality, and marketing efforts in the development of such companies was discussed. In this article, we will explore the significant impact that an ecosystem of related products has on instrument and meter manufacturers. 　　With the continuous expansion of the Internet, the interconnection of all things has become an important theme. Both the manufacturing sector and other industries are inevitably affected. On the path to manufacturing smartphones, Xiaomi has not stopped there either; it has developed a range of products such as power banks, Xiaomi bracelets, and even rice cookers. According to statistics, by the end of 2016, Xiaomi had 77 companies within its ecosystem. Products such as the Xiaomi power bank produced by Zimi Technology, the Xiaomi bracelet made by Amazfit, the Xiaomi air purifier developed by Zhimi Technology, and the Xiaomi piston headphones created by Wanmo Acoustics all quickly became star products that influenced the entire Chinese consumer electronics market. There have even been bold predictions that in the future, when people think of Xiaomi, they will not only think of smartphones but also of various smart home products used at home. 　　Among them, there is a company in Xiaomi’s ecosystem that is related to the instrumentation industry: Lvmi Technology. Its main products include temperature and humidity sensors, human presence sensors, door and window sensors, as well as wireless switches. In 2017, a water immersion sensor developed by GreenMile Technology, which was capable of detecting water intrusion, supporting local and remote simultaneous alarm functions, and enabling the automatic shutdown of water valves, generated quite a stir in the market. 　　By extending the ecological industry chain, it is possible to foster a greater sense of goodwill and dependence on the brand among customers. The same is true for instrument and meter manufacturers. By expanding the industrial chain, it is possible to meet users’ demands for multiple levels of services provided by enterprises, increase the degree of interconnection among industries, and enhance the depth of resource processing. With continuous technological advancements and unstable market demands, if one fails to meet customers’ deeper needs, it is easy to be abandoned by them. Only by moving forward continuously can one remain invincible and keep expanding one’s production scale. So, in which directions can the extension of the product chain mainly develop? 　　Scale horizontally to catch more fish by casting a wide net. In the instrumentation industry, the most direct, simple, and straightforward approach is to integrate resources through acquisitions and mergers in order to expand the range of products offered by a company. Since 2003, instrument and meter manufacturers such as Hollyland, Focus, and Tianrui have been enhancing their influence through acquisitions and mergers, thereby capturing a large share of the market. Today, many large instrumentation companies still keep making purchases in order to increase their scale and thereby enhance their influence. Not long ago, Emerson also agreed to acquire Avanti for 527 million euros in cash, which will further increase the size of the company. 　　With the development of the Internet and the flow of capital, the division of labor within industrial chains will be redefined; this could even completely change the traditional low-end model of companies operating in single industries. As a result, giants in industrial chain integration will emerge in the instrumentation industry. 　　Delving deeper to enhance the added value of products In addition to expanding their business scale, an increasing number of instrument and meter manufacturers are no longer satisfied with merely selling their products; instead, they focus on maximizing their products’ functional capabilities. Many of these manufacturers make every effort to improve their testing abilities, by setting up laboratories or developing into third-party testing agencies. 　　With the **delegation of various environmental monitoring powers, third-party testing agencies are set to experience further rapid growth. According to the predictions of Forward Data Institute, by 2022 the market size of third-party testing will reach 265.7 billion yuan, accounting for nearly 50% of the overall inspection and testing market. 　　Recently, the testing center established by Zhejiang Chint Instrument Co., Ltd. successfully obtained a laboratory **accreditation certificate**, which indicates that the company possesses **and internationally recognized management standards as well as testing capabilities. This enables the company and its suppliers to carry out more rigorous tests. This not only helps to enhance the credibility of the company’s products and the influence of its brand, but it also increases the market share of those products in both domestic and international markets. It is evident that expanding the industrial chain will have a significant positive impact on instrument and meter manufacturers. 　　Whether it is horizontal expansion or vertical expansion, instrumentation companies need to pay attention to the role of the ecological industry chain and analyze their own strengths in order to find the most suitable path. In these two articles, the positive impacts of the right strategies adopted by Xiaomi throughout its long-term development are mainly discussed. In fact, although Xiaomi has grown rapidly, it has also encountered many challenges along the way. In the next section, we will detail the problems that Xiaomi faced during its development process, which can also provide valuable insights for instrument and meter manufacturers in their own business development.