Xiaomi moves against Alibaba with money market fund

Xiaomi

Chinese smartphone maker Xiaomi is moving into financial services with an interest-earning mobile wallet.

Xiaomi began public beta testing of an online money-market fund on Tuesday, marking another move beyond hardware for the Chinese company.

Chinese users can earn an interest rate of 3.058 per cent on money transferred from their bank accounts to Xiaomi’s wallet app, said Xiaomi President Bin Lin. The product was introduced at a Connector Event presentation in Beijing sponsored by Tencent and Re/code.

Xiaomi marketing executive Tony Wei said the product is similar Alibaba’s Yu’e Bao, China’s largest money-market fund in terms of assets.

Bin Lin described the fund as a service to their customers, rather than a banking product. Xiaomi executives have long expressed a wish to create a large, loyal userbase rather than relying on short term profits from smartphone sales. The company hopes to deploy more internet service to this userbase and challenge China’s Alibaba and Tencent.

The smartphone maker sold 61.1 million handsets last year, and expects to sell 80 to 100 million this year.

 

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