Cooperation between Xiaomi, a global Internet and technology company and Midea, a leading household electrical appliance manufacturer will soon see rapid development.

The application of non-public stock shares by Midea has been approved by China Securities Regulatory Commission (CSRC), the company revealed in a press release. This approval paves the way for a 1.27 billion yuan ($204.7 million) investment by Xiaomi.

The cooperation will be focus on smart household appliances, which include integrated development and further investments in the complete industrial chain, electrical commerce business, ecological chain, and mobile Internet innovation.

The cooperation is finding a way to access the smart household appliance market. Midea is able to provide innovation and smart household appliances and products. All Midea needs is entrance to the market and control terminals such as smart phones and smart televisions, Xiaomi's advantages.

Recent years witnessed the rapid development of smart appliances. Leaders in electronic household appliances including Haier, Midea, and TCL have been trying to dominate the market.

Smart phones are recognized as closely tied to smart appliances. Among the five leaders in the electric household appliance market with annual revenue over 100 billion yuan ($16.11 billion), Midea is the only one that does not have a smart phone business. Haier, Hisense, and TCL have operated smart phone business for years, and Gree's smart phone products are reported frequently.

The cooperation with Xiaomi will help Midea to make up its disadvantage in the market. On the other hand, Xiaomi will also achieve long-term development in the industry.