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Haier Group Profile

Haier Group Introduction

 

Founded in 1984, the Haier Group is today the world’s leading brand of major household appliances and is now transforming from a traditional manufacturer to an open entrepreneurship platform. In the era of the Internet and post e-commerce, Haier will extend its ecosystem to social networks and community economies while enhancing the user value of Haier products and services and instilling integrity as a core competence throughout the Group. Haier aims to become a global leader in the era of the Internet of Things.

 

In an age when the experience economy and sharing economy are becoming ever more present, Haier has adopted creating an ‘Ecosystem of trust and a platform for sharing’ and ‘aligning individuals and goals (RenDanHeYi), igniting potential through micro-enterprise’ as its stated spirit and style in this new era. The company is also exploring disruptive innovations to strategy, organization and manufacturing, establishing a dynamic self-circulating system. In terms of strategy, Haier has established a co-creating and win-win ecosystem with users at the center, and is able to fulfill win-win results and rewards for ecosystem stakeholders; in terms of organization, Haier has managed to overturn a traditional closed hierarchical system into a networked node organization, integrating first-class resources from around the world in an open way; and in manufacturing, Haier has explored replacing traditional physical plants with inter-connected factories and making the transformation from mass manufacturing to mass customization. ‘Human value comes first’ is always the main guiding principle in Haier's business model, and throughout this transformation, staff are no longer employers and executors, but instead have transformed into entrepreneurs and dynamic partners.

 

Social value created by transformation

By the end of 2016, Haier Group’s platform has developed 15 innovation and entrepreneurship sites supporting 108 incubators, 3600 incubation projects, and 1333 venture capital investments totaling 12 billion RMB. More than 280 customer-facing microenterprises, 3800 service and support micro-enterprises, and millions of micro stores attract both capital and labor on the Haier platform. More than 100 micro-enterprises’ annual revenues have exceeded 100 million RMB, and 41 have received VC funding of which 16 received in excess of 100 million RMB. Through measures such as decentralization, disintermediation, and elimination of internal communication barriers, Haier has decreased employment by 45% from its peak but has created more than 1.6 million job opportunities. Haier was the only household appliance company recognized for its contributions to Shuangchuang—mass entrepreneurship and innovation—by the State Council of the Peoples Republic of China in May 2016.

 

Industry innovation

Haier Group focuses on innovation on five major platforms including a white goods transformation platform, an investment and incubation platform, a financial holdings platform, a real estate industry platform, and a cultural industry platform.

  • White Goods Transformation Platform: The white goods platform focuses on the transformation from traditional electric appliances to networked appliances and ultimately to a networked home appliance hub.
  • Investment & Incubation Platform: The innovation and incubation platform focuses on new products and services.By establishing a community interaction system, Haier will occupy a leading IoT position across business spheres.
  • Financial Holdings Platform: The financial holdings platform focuses on internet-based transactions and industrial finance, the latter mainly in medical care and rehabilitation and in agriculture.
  • Real Estate Industry Platform: Haier entered the residential real estate market in 2002 and entered a new stage in 2013 with the Haikehui customer database and platform where for the first time Chinese buyers can design their own homes.
  • Cultural Industry Platform: The cultural industry platform is responsible for Haier’s Rendanheyi management model worldwide and protects Haier’s intellectual property. The platform also supports social media and Internet-based games.      

Various entrepreneurial resources, including manufacturing systems, logistics, venture capital investment & incubators, and human capital, are provided to entrepreneurs via Haier's five major platforms, through which entrepreneurs can realize innovative growth utilizing Haier's ecosystem resources.

 

Achievement Under the Guideline of Rendanheyi Model

Revenue generated by the traditional economy: The Haier Group’s global revenues of 2016, excluding GE Appliances, were 201.6 billion RMB, with year-on-year growth of 6.8%; profit achieved 20.3 billion RMB, with year-on-year growth of 12.8%. Profits increased at 1.8 times the rate of revenue growth. The Haier Group achieved a compound growth rate of 6.1% in income and 30.6% in profit over the past decade.

Trading volume crated by online transaction: Haier Group’s product online platforms, B2B, B2C, social networking online platforms, and Internet-finance platforms generated a 2016 trading volume of 272.7 billion RMB with year-on-year growth of 73%.

Haier's transformation is based on its exploration of the RenDanHeYi model. The model, since its first inception on September 20, 2005, has since been upgraded to the RenDanHeYi 2.0, a co-creation and win-win ecosystem model. The ‘Ren’ (representing ‘people’) has been updated from standing for only Haier staff, to know meaning all stakeholders. ‘Dan’ (which means ‘goal’) is updated from ‘user values’ to ‘user resources’. The ultimate goal of this model is to realize multilateral win-win added value in a co-creation and win-win ecosystem. The innovative RenDanHeYi model is supported by world-renowned business schools and management scholars, due to its effective solutions to the particular management problems faced in the Internet era. Many of these institutions have conducted long-term studies of Haier and view Haier's exploration as a move in the right direction. Furthermore, the Harvard Business School and Wharton Business School have already entered Haier into their case study library as a teaching resource. Every year, thousands of enterprises from China and abroad, both big and small, visit Haier to learn about the RenDanHeYi model. At present, the model has been tested and adapted in the agricultural industry and the medical industry.

 

Currently, the Group’s brands include Haier, Casarte, GE Appliances, Aqua, Fisher & Paykel, Leader, Goodaymart, DCS, and Monogram. Each brand has its own market position and provides outstanding user experiences for end users. Beginning in 2017, Haier will further deploy and demonstrate the effectiveness of the Rendanheyi management model and will internationalize Rendanheyi through its unique cultural integration system.

 

(HAIER-20170527)

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