It's earnings season again. On the evening of April 29, Haier Smart Home released its 2024 first quarter report. According to the financial report, Haier Smart Home 2024 Q1 continued the steady trend of the 2023 annual report, with revenue and profit continuing to increase. Among them, the net profit attributable to the parent company increased by 20.2%, exceeding expectations.
What's more worth mentioning is that in the context of the decline in overseas market demand, Haier Smart Home's overseas revenue increased by 4%, and its operating profit increased by more than 10%. This shows that Haier Smart Home's global high-end brand creation strategy has achieved remarkable results.
Many countries around the world have achieved high-end market share
As we all know, the export of Haier Smart Home has always been a "difficult but correct" road to independent branding. More than 30 years ago, when peers were earning foreign exchange through OEM and OEM, Haier Smart Home firmly chose the road of differentiation of independent branding. Today, Haier Smart Home's overseas strategy has moved from export brand creation to high-end brand creation, and has established seven high-end brand clusters of Haier, Casarte, Leader, GE Appliances, Fisher & Paykel, AQUA and Candy, leading the way in high-end markets around the world.
In North America, GE Appliances has become the leading home appliance company in the region, in Europe, Haier Smart Home has been the fastest growing home appliance company for eight consecutive years, in New Zealand, Fisher & Paykel ranks No. 1 in the white appliance market, in Pakistan, Haier's market share ranks No. 1 in the industry, in Vietnam, AQUA washing machines rank No. 1 in the industry, and in Thailand, Haier ranks No. 1 in the air conditioning and freezer industry.
To make high-end products, we must accurately understand the needs of users and meet the needs, so that no one else has them. European consumers are sensitive to energy-saving needs, and Haier Smart Home has launched the X11 washing machine, which is 50% more energy-efficient than the European A-level energy efficiency standard. Europeans like to "eat ice", and Haier Smart Home quickly launched clean ice-making refrigerators in Europe. With a strong demand for washing and drying among U.S. consumers, GE Appliances has launched a large drum washer-dryer that can achieve 2 hours of washing and drying without shifting the load.
Rapid product development for consumer pain points in each region has given Haier Smart Home a differentiated advantage in the world. The innovation ability of "no one else has it" makes it have a higher premium ability than similar products, and also lays the foundation for the global high-end market share leadership.
According to the data, the price index of the same category of Haier's clean ice refrigerator products exceeded 200 after they were launched, and the share exceeded 25%. The price of GE Appliances' large drum washer-dryer is $2,899, with a price index of 138, and the overall sales volume in 2023 will increase by 22.5% year-on-year. In Germany, a high-end refrigerator costs 2999 euros, with a price index of 180, an overall share of 15.4%, and a TOP2 multi-door refrigerator. In the UK, a high-end washing machine costs 849 pounds, with a price index of 124, and the overall sales volume of washing machines is TOP2 and TOP3. In the ANZ market, multi-door refrigerators are priced at S$4,899 with a price index of 150, and fully embedded dual-zone freezer/refrigerators are priced at S$15,999 with a price index of 300.
Why can we achieve "no one has me"?
To differentiate and innovate in response to consumer needs, we need to better understand the local market. Rapid product development requires global R&D and supply chain support. To sell high-end products, you also need a local sales network. This is the "three-in-one" that global enterprises must do, that is, the full localization of R&D, manufacturing and sales.
The reason why Haier Smart Home has been able to launch innovative products in response to the needs of local consumers in the global market is precisely due to the localization of the trinity and the zero-distance between enterprises and users through the Rendanheyi model, so as to achieve innovation tailored to local conditions.
First of all, the localization of the trinity has made Haier Smart Home a truly global enterprise. Globalization is not simply about selling products all over the world. In the Chinese market, we see many global brands such as Apple, Samsung, Mercedes-Benz, BMW, Procter & Gamble, etc., they have R&D centers, manufacturing bases and sales networks in China, which is truly global.
The globalization of Haier Smart Home is also the trinity localization of R&D, manufacturing and sales. Over the past 30 years, Haier Smart Home has laid out 10 R&D centers, 35 industrial parks, 143 manufacturing centers, 126 marketing centers, and 230,000 marketing networks, and has successively built nearly 1,000 smart home experience centers.
Through the sales network all over the world, we can have zero distance from the market, so as to have a keen insight into user needs. Through the global R&D network, it can quickly carry out targeted R&D to the needs of local users, and integrate global technology and supply chains, so as to launch products faster. For example, in the research and development of large drum washer-dryers in the United States, the Qingdao R&D center provides software and hardware design, mold development and machine integration, the U.S. R&D center provides heat exchange system design analysis, structure and machine review, etc., and the European R&D center provides innovative design of drying algorithms, fan design and simulation.
Second, the integration of people and singles makes globalization no longer constrained by different cultures and systems. Each country and region has a different culture, different race, different systems, how to let the employees of each country into the development of the enterprise, has become a management problem that every multinational company must face.
Haier Smart Home has acquired well-known local home appliance brands in the United States, Europe, and Japan, integrating employees from more than 100 countries. How to lead a good team, so that everyone has the same goal to innovate and open up the market?
In the Rendanyi model, each employee is the boss and keeps an eye on his or her own "order", thus creating a working atmosphere and incentive mechanism that works more and gets more, and reduces the impact of cultural differences. For example, employees in the U.S. may be more casual, but after the acquisition of GE Appliances, GE Appliances introduced the Rendanyi model, which unifies the value of employees, customers and users, unleashes the potential of thousands of makers, realizes differentiated innovation based on user needs, and sets the goal of doubling its business.
Before Japan's Sanyo Home Appliances was acquired by Haier Smart Home, it had been subject to the "seniority sequence system" commonly adopted by Japanese companies, resulting in a very serious situation of seniority, young people and newcomers could not be reused, and employees lacked enthusiasm, thus detaching themselves from the market and users.
After Haier Smart Home acquired Sanyo Home Appliances, it promoted the implementation of the Rendanheyi model. Through the Rendanheyi model, we have broken the Japanese seniority sequence and seniority, so that every employee can devote themselves to work in the spirit of CEO, and also created a new compensation distribution mechanism - more work, more rewards, and no upper limit on income. At the same time, it has also changed the single lifetime employment and implemented four employment forms: managers, regular workers, contract workers, and dispatch workers.
When employees have the CEO spirit, they are more sensitive to market needs, which helps to create innovative products that no one else has. AQUA, a subsidiary of Haier Smart Home, launched the TX series of refrigerators in Japan because employees found that due to the relatively small living area, users prefer to buy refrigerators with a small footprint and large volume during daily fresh storage, so they quickly launched TX refrigerators. As soon as this refrigerator came out, it became a hit, and the purchase rate of TX refrigerator users was 40%, 4 times that of the industry.
Obviously, through the three-in-one and one-in-one model, Haier Smart Home has become a truly global enterprise, which also allows enterprises to more keenly discover user needs and develop innovative products that "no one else has", so as to achieve the leadership of high-end brand creation.
epilogue
Turning the enterprise to the world and selling high-end products to the world is the best result of the globalization of Chinese enterprises. Because the success of high-end indicates that Chinese products are no longer synonymous with low-end, no longer earn low-end processing fees, but rely on innovation and brand to stand in the global market.
More than 30 years ago, Haier Smart Home began the road of global brand creation, successfully topped the ceiling of the home appliance market through the localization of the trinity and the one-in-one model, and competed with foreign brands in the high-end market, and achieved leading advantages in the United States, Japan, Europe, Southeast Asia, Africa, the Middle East and other global regions and countries. The success of Haier Smart Home's global high-end brand has set an example for Chinese enterprises to go global, and will inevitably promote the continuous growth of revenue and profits.