Hisense Group changed coaching! After Zhou Houjian left office, Hisense's internationalization still faces challenges

On March 12, 2022, Zhou Houjian, the former chairman of Hisense Group Holdings Limited (hereinafter referred to as "Hisense Group"), announced his retirement, and Lin Lan, vice chairman in charge of Hisense's overseas business, will take over.

Zhou Houjian joined the Qingdao TV factory in 1982 and was promoted to director ten years later. In 1994, he vigorously changed the name of the enterprise to "Qingdao Hisense Group", and this local enterprise also went out of Qingdao with the change of name, and gradually became an international giant of 100 billion.

Now, 65-year-old Zhou Houjian handed over the baton to Lin Lan. According to Hisense's official WeChat, Zhou Houjian has two considerations for the transfer of the chairmanship this time: one is that Hisense is rapidly growing into a "world-class enterprise" and needs a leader with an international vision; second, according to the principle of continuous improvement of management, Hisense needs to change a management method.

Lin Lan's taking over the baton also reveals the important development direction of Hisense in the future: internationalization.

On the left is Zhou Houjian, on the right is Lin Lan, the official WeChat of Hisense is provided

Engineer Zhou Houjian and his technical Hisense

Hisense Group was founded in 1969 and owns Hisense Vision (600060. SH), Hisense Home Appliances (000921. SZ；00921. HK) and Sanden Holdings (6444) are three listed companies. Its brands include Hisense, TOSHIBA TV, gorenje, KELON, Ronshen and so on.

In July 1982, Zhou Houjian graduated from the Department of Electronics of Shandong University and was assigned to the Qingdao TV Factory, the predecessor of Hisense Group.

Zhou Houjian, a technical professional, is a doer, and after becoming the director of the factory in 1992, he carried out major reforms to reduce costs and lay off redundant personnel. In 1994, Qingdao TV Factory was renamed Qingdao Hisense Group.

Zhou Houjian realized that if there is no core technology, Hisense can only be a processing enterprise. To this end, he went to Japan more than 100 times to study advanced technology.

In the process, he realized the importance of independent research and development.

In 1998, Zhou Houjian said in an interview with China Business Daily: "Now that the process of global economic integration is accelerating, it is impossible for you to introduce other people's current technology, he will give you yesterday or even the day before yesterday, and today's and tomorrow's technology is impossible for you." "If you don't have autonomous and strong scientific and technological development capabilities, why should you compete?" Technological advantages can be translated into market advantages. ”

In 2000, Hisense began chip research and development. In June 2005, Hisense successfully developed China's first digital video processing chip with independent intellectual property rights and industrialization - Xinxin.

At the end of 2015, Hisense released the hi-view pro picture quality engine chip, becoming the only TV company in China with its own high-end picture quality chip, and was shortlisted for the world's top three. Today, Hisense's picture quality chip has iterated to the fifth generation.

At the same time, Xinxin Micro Company's screen-side driver chip (tcon) products have covered the entire range from high-definition to 8k ultra-high-definition, and the shipment volume of tcon chips in 2020 exceeded 40 million, and the cumulative shipment has reached 100 million, with a current global share of more than 50%.

The new boss will continue to expand overseas markets

In addition to the emphasis on technology, Zhou Houjian also proposed an important strategy - going to sea.

As early as the 1990s, Hisense (including the Qingdao TV factory period) entered the international market through the export of complete machines.

According to Lin Lan's summary, during Zhou Houjian's tenure, Hisense Group first improved its technology and production process through the fixed-point production (OEM) business. Then start to build your own brand and establish an overseas marketing system. At present, Hisense is in the third stage, research and production localization, efficient to meet the local market demand.

According to the data on hisense official website, as of March 13, Hisense Group has 7 factories/industrial parks, 8 R&D institutions and more than 30 overseas companies overseas.

In the process of hisense's internationalization, Lin Lan, who has just taken over as chairman, has played an extremely important role.

Lin Lan is only one year younger than Zhou Houjian and is also from a technical background. Prior to joining Hisense, he served as the manager of power system software development at Siemens Consulting (now AMEC, UK), senior project manager and senior engineer at GE Powertrain, and vice president of Kelon Electric.

From 2002 to 2004, Lin Lan was mainly responsible for the international marketing business of Kelong, during which time, Kelong's international sales revenue increased from 750 million yuan to 3.29 billion yuan.

In 2006, Hisense Group acquired Kelong Electric Appliances, and Lin Lan also joined Hisense Group to take charge of hisense group's overseas business. In the same year, Zhou Houjian officially put forward the internationalization strategy of "Hisense's future development, the big head is overseas" and formally established an international marketing company.

Lin Lan proposed the "B brand" strategy - temporarily abandoning the direct competition for the head brand, starting with the cost-effective medium positioning products, so that independent brands can quickly enter the overseas market. At the same time, he is also responsible for building the overseas content platform of Hisense smart TV, Hisense overseas research and development system, and responsible for a number of cross-border mergers and acquisitions of overseas enterprises.

In October 2021, Hisense publicly stated at the media open day that it expects overseas revenue to surpass domestic revenue in 3 years at the earliest.

In November 2021, at the Special Conference on Hisense's Internationalization Strategy, Zhou Houjian said that the next important breakthrough in internationalization is in the B2B industry.

In the whole year of 2021, Hisense's overseas revenue was 73.1 billion yuan, overseas revenue accounted for 42% of total revenue, and the proportion of independent brand revenue exceeded 80%.

It is not difficult to predict that after Lin Lan takes over the chairmanship, Hisense will still exert efforts in internationalization.

The market is weak and the epidemic is impacting

Hisense faces challenges

Hisense regards internationalization as an important development direction in the future, which broadens the market, but also faces risks.

In 2020, Hisense Group was hit by the new crown epidemic. Taking Hisense Video as an example, the operating income in the first quarter of 2020 was 6.76 billion yuan, down 11.26% year-on-year and 35.4% month-on-month.

In 2020, Hisense Group's overseas revenue was 54.8 billion yuan, an increase of 18.6% year-on-year, compared with the growth rate of 21.1% in 2019.

In the next period of time, it is expected that the overseas epidemic will continue to repeat, and whether Hisense can resist the impact of the epidemic needs further observation.

On the other hand, Hisense's internationalization and B-end products also reflect to a certain extent the dilemma it is currently facing in China - C-end home appliances are under pressure.

According to the Guoshi express report, Liu Buchen, an expert in the home appliance industry, said that China's home appliance industry is entering the era of the stock market, and the most significant feature of the stock era is the lack of incremental space, like the past 30% annual growth, which is impossible.

Hisense's core business color TV has been particularly affected by the pinch of mobile phones, tablets, computers and projectors. According to the data of Aowei Cloud Network, in 2021, the retail volume of China's color TV industry market reached the lowest in 12 years, with only 38.35 million units, down 13.8% year-on-year.

Under the background of weak market, the internal competition in the industry is becoming more and more fierce, and brands such as Xiaomi and Huawei have crossed borders into the smart TV industry. According to the data of Aowei Cloud Network, the sales volume of China's color TV market in the first quarter of 2020 totaled 9.963 million units, of which Xiaomi TV sold 1.836 million units, with a market share of 18.4%, ranking first.

Of course, Hisense has long begun its own diversified layout of home appliances, but domestic brands Haier, Midea, Gree, as well as foreign brands Panasonic and Siemens are fierce enemies, and it is not easy for Hisense to break through.

Red Star News reporter Yu Yao intern reporter Zhang Luxi

Edited by Tao Yueyang

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