Xiaomi CEO Lei Jun just unveiled the company’s latest product—a wifi-enabled rice cooker that retails for 999 yuan ($153).
This foray into the kitchen is not surprising for the smartphone giant. Since 2014 the company has steadily rolled out wifi-enabled household appliances, including a “smart” air conditioner and a “smart” air filter. With its rice cooker, though, Lei is not just trying to make Asia’s favorite grain tastier. He’s trying to prove China is a new superpower for quality consumer electronics.
Lei hinted at his goal when he made an appearance (link in Chinese) at China’s ”Two Meetings,” the annual gathering of the nation’s legislature and top advisory body, earlier this month. Rice cookers, he said during a speech, are a symbol of how China’s manufacturing is inferior to Japan’s, he said.
“At the beginning of last year there were reports that many [Chinese] people were going to Japan to buy rice cookers and toilet seats. At first I thought people were superstitious toward foreign products. But later I researched Japan’s rice cookers, and I realized that they’re indeed excellent,” he said. “Japan’s skill level at making rice cookers far surpasses China’s.”
Upgrading China’s reputation as a manufacturer has long been a part of Xiaomi’s mission. In its early days, the company hyped itself in China by trumpeting how it could rival big-name competitors in sales and quality, despite its Made-In-China origins. Lei Jun has also expressed his desire to create a truly global Chinese brand that consumers know and love, like Samsung or Sony. The company describes the purpose of its smart hardware division as “promote an upgrade in Chinese manufacturing with a new concept of ‘Made in China’ products.”
“If you look at Chinese companies as a whole there’s this perception that they’re of low inferior quality. So being able to show the world that these products are pretty darn good helps to fight that perception,” Bryan Ma, an analyst at research firm IDC, told Quartz.
Rice cookers aren’t a bad place to start. In 2015, Chinese consumers spent an estimated 10.8 billion yuan (about $1.6 billion) on rice cookers, according to Euromonitor. Midea, which occupies 30% of the market, is a maker of home appliances like refrigerators and washing machines with a market cap of about $19.8 billion.
Chinese consumers will pay much more for foreign brands. According to research firm China Market Monitor, the average price of a Chinese rice cooker sold online is 574 yuan ($88), while a foreign rice cooker sells for an average of 2,523 yuan (about $389) (link in Chinese).
Japan, meanwhile, is the king of high-end rice cookers. Sophisticated models from Panasonic or Mitsubishi can sell for almost $1,000. They come with features like “handmade iron bowls” or settings that alter texture to one’s liking. Chinese consumers are buying them in droves—the number of rice cooker exports from Japan to China has increased more than 20 times since 2005 (paywall).
If Lei gets his way, those consumers will be buying $150 Xiaomi models in the future instead.