Internet means challenges, opportunities for industries

Lei noted that Xiaomi's profits come from broad use of online applications by customers.

"Robust Internet development in recent years has provided huge opportunities for traditional businesses. Like many other businesses, we are taking this opportunity to enter the smartphone industry," Lei said.

The business model, which relies mainly on the Internet at every stage from designing to developing applications to improving users' experience, has helped greatly boost revenues for Xiaomi, according to Lei.

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"We are totally different from traditional mobile phone manufacturers, which only focus on design, production and sales while ignoring online application development and communication with users," Lei said.

Xiaomi, which was established only in 2010, has set an aggressive target of 100 billion yuan in sales next year. Sales last year rose 150 percent to 31.6 billion yuan, Lei noted.

"Our smartphones are not only developed by the company but also by an increasing number of users, who are always helping us improve the quality," Lei said.

In a proposal to the annual NPC session, Lei said the government should expand free Wi-Fi facilities and fourth-generation networks to facilitate wide use of the mobile Internet.

"From users, operators and smartphone makers to online application developers, there has already been huge market potential brought about by the mobile Internet," Lei said.

Lei also suggested the government should use the Internet industry as part of the national development strategy.

"The Internet will help upgrade the traditional manufacturing industry," Lei said.

Lei encouraged traditional Chinese manufacturers to optimize their business models by becoming actively engaged in the Internet, as "the booming industry will bring huge business growth".

In addition to opening more flagship stores this year, Gree Electronic Appliances Inc, one of the most competitive manufacturers of air conditioners in China, will better promote products online and use the Internet to improve its production and management efficiency, said Dong Mingzhu, president of Gree.

"Nobody can ignore the powerful challenges and opportunities that the Internet industry has brought about. For Gree, we're using the Internet service not only in sales but also in corporate management and technology research in the past few years," Dong said.

Raising efficiency by using the Internet is the only way to meet the needs of increasingly demanding customers, and manufacturers need to turn to the Internet and technology to cope with rapid change, according to Dong.