Chinese smartphone maker Xiaomi announced that the company plans to invest USD10 million to purchase shares of Youku-Tudou from the secondary market, which will enable the playing of Youku-Tudou contents on Xiaomi devices.

Xiaomi will also buy Youku-Tudou shares from the open market. The two parties will make a joint investment of an unknown sum to develop Internet application technologies for Youku-Tudou's self-produced contents, joint production, distribution, and film and television program production.

Earlier this month, Xiaomi announced that the company would invest USD1 billion in the video content industry as it aimed to improve content of its TV and TV box products to optimize customer experience of video users in China. According to Lei Jun, chairman and chief executive officer of Xiaomi, they prefer to cooperate with partners in the video content sector and realize joint growth in the area.

Gu Yongqiang, chairman and chief executive officer of Youku-Tudou, said that the strategic cooperation with Xiaomi is an important part of the company's open ecosystem. In the mobile Internet era, Youku-Tudou will team with various terminals, contents providers and carriers in the multi-screen ecosystem to implement its open ecosystem program.

Xiaomi will soon have larger investments in the video sector. Rumors are swirling that the smartphone company will soon invest USD300 million in Iqiyi.com and they will assign an executive in the board of directors of Iqiyi.