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China Daily Website

Haier taking on America

Updated: 2012-08-03 11:38
By Ariel Tung in New York ( China Daily)

However, the Haier Industrial Park only has the capability to produce full-sized refrigerators, and other appliances are still made in China. The factory also ships some of its US-made top-end refrigerators back to China, as well as other countries.

In 2011, Haier was ranked the world's No 1 global major- appliance brand for a third consecutive year by Euromonitor International, a London-based business intelligence company.

Its global brand market share grew by 1.7 percent to 7.8 percent last year, according to the report.

Due largely to the sheer size of its home Chinese market, Haier Group's total sales grew about 15 percent to $23.8 billion last year.

Its in the US, on the other hand, that its individual product market shares are still tiny in comparison: for room air conditioners that's 16 percent; portable air conditioners 22 percent; and compact refrigerators 20 percent.

According to Kan, the company's ambition remains clear: to overtake Whirlpool and GE in the US - far from over ambitious, as it's certainly well-known for tackling major obstacles.

In 1984, Haier Group - then known as Qingdao General Refrigerator Co - was on the verge of bankruptcy when CEO Zhang Ruimin took the reins and returned it to profit in just a year.

According to a recent profile in Fortune magazine, "you'd be hard pressed to find a manager who is more innovative or fearless than the head of the Chinese appliance giant".

It called Zhang a "national hero" in China; the man who turned the failing factory into Haier, "a galloping enterprise with revenue of $20 billion and one of China's first global brands".

After saving the company, Zhang quickly acquired other businesses and expanded the product line to include other appliances such as freezers, dishwashers and microwaves. In 1991, these businesses merged to form Haier Group.

Today, Haier has 29 manufacturing bases and 16 industrial parks in the US, Europe, Asia, the Middle East and Africa. It also has eight R&D centers in the US, Germany, Japan and South Korea.

Its success story in going overseas could certainly be described as an object lesson for many Chinese companies struggling with what remains the key obstacle for many - brand building in an international market.

Kan's advice is clear: "Understand that what works in China may not work in America.

"And the first thing they need to do is to understand their consumers," he said.

"We are always learning about what our customers want."

atung@chinadailyusa.com

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