Lenovo has announced it is to establish a direct-to-consumer, internet-based mobile business in China next year. The new company, which will operate under a separate brand name (yet to be announced), will focus on smart devices and services.

According to Lenovo, the motivation behind the new business is to target the fast growing mobile device market in China. The hardware vendor said it will also focus on software and application development, and “close customer engagement,” as the company put it.

Of course, the company already has a mobile device division but it predominantly sells through the retail channel and carrier relationships. “While Lenovo has and continues to strengthen its own company-branded online channels as part of its go-to-market strategy, the new company will exclusively focus on direct-to-consumer sales, marketing and product development using an internet-based business model,” Lenovo said in a statement.

The business model for the new division sounds similar to that of competitor Xiaomi’s, which engages with customers through its website and social networking services. Lenovo’s words “close customer engagement” seem to point to similar strategy.

By mostly focusing on direct sales, Xiaomi has been somewhat disruptive in the largely channel-focused mobile market in China. Xiaomi’s gains in the market has caused rivals such as Huawei and ZTE to also step up their direct sales strategies.

While Xiaomi’s background is in software, Lenovo in essence is a hardware company. It will be interesting to see how good a fight it can put up against Xiaomi and how well it will be able to execute the announced plans to focus more on mobile app development.