China smartphone giant Xiaomi now making big Internet video bet

Not content to join the ranks of the world’s biggest smartphone makers, China’s Xiaomi is making an aggressive push into the online video market.

Xiaomi announced today that it had partnered with Shunwei Capital to invest $300 million in iQiyi, a video platform controlled by Chinese search giant Baidu, according to Reuters.

Just last week, Xiaomi purchased a stake in Chinese video streaming site Youku Tudou. Youku reaches 500 million users per month, according to iResearch.

All of this comes within weeks of Xiaomi unveiling bold plans to invest $1 billion in online video.

The goal is to grab a bigger share of China’s rapidly expanding Internet TV market. But it also speaks to the massive ambitions of a company that many people in the U.S. hardly know.

Just last month, Xiaomi became the world’s third biggest seller of smartphones, according to IDC, ranking behind Samsung and Apple.

Now it wants to create the same momentum in video. Xiaomi runs a separate TV division, Xiaomi TV, that offers a set-top box that runs on its own hardware and software.

In taking a stake in iQiyi, Xiaomi gets a piece of a digital platform that had 345 million viewers as of July. Of those, 134 million users watched on mobile devices.