Chinese brand Meitu announced yesterday that it has entered into an agreement with Xiaomi, effectively shifting all of its hardware business to the latter company for the next 30 years. The agreement, which Meitu claims will aid its mission “to inspire more people to express their beauty,” leaves Xiaomi responsible for the design, R&D, marketing, and sales of Meitu-branded hardware while Meitu continues work on the camera smarts.
In exchange for use of the Meitu brand, Xiaomi agrees to initially pay Meitu a 10 percent profit share through the first five years or until an unspecified profit threshold is reached — at which point the compensation scheme will switch to a flat per-device payout for 30 years. In addition to smartphones, the announcement also makes mention of “certain smart hardware” products that can be sold under the Meitu brand by Xiaomi. These products sound as if they may complement existing Xiaomi smart devices, but given the broad and unfocused nature of Xiaomi’s smart device category it’s unclear what those products might end up resembling.
Xiaomi has made a name for itself globally with sleek hardware and brawny budget phones, but for those of us outside of China, Meitu may not exactly be a household name. While Meitu has moonlighted as a smartphone manufacturer of late, it’s made waves with its suite of beautification and camera applications on both Android and iOS. Eagle-eyed readers might recall that Meitu hasn’t always made the most positive of waves, with its apps coming under fire for privacy and tracking concerns early last year.
This announcement gets Meitu out of a hardware market it’s yet to make a dent in with its selfie-centric devices and questionable design decisions, having sold only 3.5 million smartphones in five years. By handing over the reigns to Xiaomi, Meitu is hoping to grow the brand by leveraging Xiaomi’s expertise in moving hardware, citing Xiaomi’s sales volume in excess of 100 million for the year through October.
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While Xiaomi has yet to comment on the agreement with Meitu, Meitu’s target audience to date has been largely young and female: a demographic Xiaomi has been sorely lacking. As of earlier this year, via TechNode, Xiaomi’s staunchest buyers were men and those between the ages of 30-34, with men accounting for a neat 69.1 percent of buyers. This doesn’t drastically differ from one of their chief Chinese competitors, Huawei, whose customers are reportedly 66 percent male, but pairing Xiaomi’s hardware design and marketing prowess with Meitu’s selfie-centric image will allow Xiaomi to broaden its reach. This could very well prove to be the differentiator it needs to overtake its Chinese rival. So for those of you able to pop into a Mi Home store expect to see beefed-up selfie shooters (hopefully devoid of any hexagonal shapes) begin taking up more shelf space.