Business, Internet, Telecom & Wireless

Xiaomi's Barra Joins Startup Board With New China Investment

Maybe the creeping reality of working for a declining Chinese smartphone company pinched by shrinking margins has propelled one of the highest profile expats working in China's tech scene to take a look around at other opportunities?

Hugo Barra, vice president of global operations at Xiaomi Inc., will join the board of Operator, an expert community-based e-commerce company that has just closed its series B investment.

GGV Capital led the US$15 million series B financing round in Operator, and the funds will aid the company to expand its concierge buying operations in China.

New investors including Formation8, Morningside Ventures and Horizons Ventures, as well as existing investors Greylock Partners and Expa, also participated in the round.

Hans Tung, managing partner at GGV Capital, will join Barra as a board observer.

Operator’s expansion into China will enable Chinese customers to buy authentic goods from Western merchants via messaging with the help of Chinese speaking human operators. In 2015, the U.S. exported US$161.6 billion in goods to China, making the country the third-largest importer of U.S. goods.

Barra was the vice president for Android product management at U.S.-based Google, and he joined Xiaomi three years ago. When he came to Xiaomi three years ago, ChinaTechNews.com wrote, "Margins for phones have also continued to slide, pushing stalwart phone companies like Motorola and Nokia to seek exits or partnerships. These margins will become tighter as handsets become more commoditized, leaving the software inside the phones to be one of the differentiators. Xiaomi, which relies on the Android operating system, may find itself in the same position as its competitors as they try to sell products in a homogenous sector."

And sure enough, over the past three quarters of 2016 Xiaomi's prospects have become murkier as smartphone prices drop and more rivals enter the market. During the first quarter of 2016, China's smartphone shipment reached about 104.9 million units, representing a decrease of 5% compared with the 109.8 million units in the same period of last year.

Statistics from market research firm Strategy Analytics show that Xiaomi was facing severe competition from Huawei and Samsung in the medium-end market and its market share decreased from 13% to 12%, ranking third in the Chinese market. Xiaomi reportedly shipped 128,000 smartphones in the first quarter of 2016, a year-on-year decrease of 9%.

This expansion of Barra's professional horizons could indicate both an entrenchment of his career in China and a subtle push away from Xiaomi.

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