Matrix product state has become the algorithm of choice when studying one-dimensional interacting quantum many-body systems, which demonstrates to be able to explore the most relevant portion of the exponentially large quantum Hilbert space and find accurate solutions. Here we propose a quantum inspired K-means clustering algorithm which first maps the classical data into quantum states represented as matrix product states, and then minimize the loss function using the variational matrix product states method in the enlarged space. We demonstrate the performance of this algorithm by applying it to several commonly used machine learning datasets and show that this algorithm could reach higher prediction accuracies and that it is less likely to be trapped in local minima compared to the classical K-means algorithm.