Established at Qingdao, China in 1984, Haier Group is a world-leading provider of solutions to better life. In the process of sustainable innovation and entrepreneurship, Haier always upholds the principle of “prioritizing people's value”. Mr. Zhang Ruimin, Chairman of the Board and CEO of Haier Group, systematically illustrated the Rendanheyi Model in September 2005, whose contemporary features, universality and social characteristics have achieved trans-industry and trans-culture fusion and replication.
On May 10, 2018, China Brand Day, Zhang proposed the concept “ecosystem brand” for the first time, seen as another iteration and innovation to the brand connotation following the product brand and platform brand. It is the world’s first definite proposal on building an ecosystem brand in the age of the IoT. At the ceremony for observing the 35th anniversary of Haier Group and publishing the strategic themes of the sixth development stage and the fourth-generation enterprise culture dated December 26, 2019, Zhang announced the beginning of the sixth strategic development stage - Ecosystem Brand Stage with two other co-founders: Yang Mianmian, former Vice Chairman of the Board and President, and Wu Kesong, former Vice Chairmen of the Board.
Focusing on user experience and keeping abreast of the times, Haier has experienced six strategic stages: brand building strategy, diversification strategy, internationalization strategy, global branding strategy, networking strategy and ecosystem brand strategy, growing from the once collectively owned small factory on the verge of bankruptcy into an ecosystem that leads the IoT era. As the world’s first and only IoT ecosystem brand, Haier has been included on the list of BrandZ™ Top 100 Most Valuable Global Brands for two consecutive years. Haier offers services for over 1 billion families in 160 countries or regions around the world. To date, Haier has successfully incubated four listed companies (Haier Smart Home, Haier Electronics, Haier Biomedical, INKON Life), five unicorn companies and 23 gazelle companies. Moreover, Haier has established 10+N open innovation systems, 25 industrial parks, 122 manufacturing centers, 108 marketing centers and 143,330 sales networks globally. It owns a number of ecosystem brands and new species, including Haier, Casarte, Leader, GE Appliances from the U.S., Fisher & Paykel from New Zealand, AQUA from Japan, Candy from Italy, COSMOPlat, Ririshun, Yingkang Life, Haier Biomedical, Haina Cloud, HCH, Haier Brothers, etc.
Haier has topped Global Major Appliances Brand Rankings by Euromonitor International for 11 consecutive years. Its subsidiary Haier Smart Home is among the list of Global 500 and the World's Most Admired Companies of Fortune and the World’s 2,000 Largest Public Companies of Forbes. Its new species COSMOPlat industrial Internet platform leads the top ten trans-industry and -field industrial Internet platforms of the Ministry of Industry and Information Technology and named a leader in Forrester's Industrial IoT Platform and designated by the three international standard organizations, including ISO, IEEE and IEC to lead the drafting of international standards for mass customization models...In the era of IoT, Haier’s ecosystem brand is leading the world.
Upholding the vision of “creating new engines to growth in the era of IoT with Rendanheyi Model”, Haier is committed to working with its world-class ecosystem partners to continuously build scenario brand and ecosystem brand, and to set up IoT ecosystems in clothing, food, accommodation, travel, health, elderly care, biomedicine and education, and to tailor personalized smart life for users around the globe.
When Zhang Ruimin was appointed as a boss, the factory had a huge deficit of 1.47 million CNY. It was the loan that Zhang secured from the rural production brigade that helped the whole factory survive another year.
To raise employees' awareness of quality, Zhang invited employees to join him in smashing 76 defective refrigerators with sledgehammers, sending a strong message of “Make Quality Products, Compete for Gold Medals”. After that, the “Branding Building Strategy” was implemented.
Former West Germany ambassador to China Mr. Per Fischer made a special trip from Beijing to Qingdao and visited Qingdao Refrigerator Factory. Mr. Per Fische was impressed by the stable and efficient working pace made possible by Zhang Ruimin.
On 1st February, in an international tendering by WHO, Haier refrigerators competed with over ten products from other countries and won a bid for the first time.
The Former National Economy Commission began to select domestic products for the National Quality Product Award. The Qindao-Liebherr 4-Star BCD-212L Side-by-Side refrigerator won the first National Quality Product Award Gold Medal in China's refrigerator industry. Among the 13 gold and silver medalist companies, Haier was the youngest one with only four years' experience since Zhang assumed the post.
Due to the fluctuations in the market, customers chose to wait for refrigerators with lowered prices. While many factories reduced prices to increase the sales, Haier, with its renowned brand and reputation for high quality, raised the price by 12% and still attracted a lot of customers.
Haier won the Enterprise Reform Innovation Award (Sails Award) and National Excellent Enterprise Management Award (Golden Horse Award), laying the foundation of talents and experience for future expansion.
On 14th November, with the approval from Qingdao Municipal Government, the Qindao-Haier Group was set up with the inclusion of Qingdao Air Conditioner Factory and Qingdao Refrigerator Factory. Since then, Haier jumped from Branding Building Stage to the Diversification Stage.
In June, Haier seized the opportunity to acquire a land of 800 mu (53.36 hectares) in the high-tech park in eastern Qingdao and began the construction of China's first home appliance industrial park.
On 19th November, Haier (stock code: 600690) was listed in Shanghai Stock Exchange. Part of the fund raised from the listing were distributed to the construction of Haier Industrial Park.
In early 1990s, Haier began self-management pilot model among employees. The door seal team of the second affiliated factory was upgraded from the first Inspection-free Team to the first Self-management Team. Zhou Yunjie, then-director of Second Affiliated Factory to the Qingdao Refrigerator Factory and the incumbent president of Haier Group, wrote an inspiring article to encourage innovation among employees.
In July, Haier turned the loss-making Red Star Electric Appliance Co., around in only three months. Haier acquired “stunned fishes” (firms with strong products but poor leadership) and imported Haier culture to activate acquired companies and achieved constant expansion.
In June, American Academy of Hospitality Sciences gave Haier Five Star Diamond Award and Zhang Ruimin a Five Star Diamond Lifetime Achievement Award. Haier is the first Chinese home appliance company to introduce “Star Service”.
In February, Haier participated in Domotechnica' 97 Cologne held in Cologne, Germany. The news that Haier issued Exclusive Agency Certificates to foreign retailers was a sign that Chinese products has entered the world stage and Haier has been recognized in the international market.
On 25th March, Zhang Ruimin was invited to Harvard and gave a speech about “Haier's Success with Stunned Fish”. Zhang was the first Chinese entrepreneur to give a speech at Harvard. Haier was the first Chinese enterprise to be included in the Harvard Business School Case Library.
On 30th April, Haier built the Haier American Factory in South Carolina, USA, a major step for its internationalization strategy. Haier's internationalization strategy started with making a firm stance in the markets of developed countries which have the strictest entry standards and continued the momentum to that of developing countries.
From 27th January to 1st February, Zhang Ruimin was invited to 30th World Economic Forum and delivered a keynote speech My Opinions on the New Economy, introducing the idea “No Internet, No Future”.
On 19th June, the signing ceremony of Haier's acquisition of a Meneghetti's Italy refrigerator factory was held at the Haier headquarter, marking the first cross-border acquisition by a Chinese white goods enterprise.
On 4th March, Haier purchased the iconic former Greenwich Bank Building, located in midtown New York as its headquarter in North America.
On 20th August, a Haier advertising sign was lit up on the top of Seven Treasures Building on the Yonchome, Ginza Square, Tokyo, Japan. Haier was the first Chinese enterprise to set up an advertising sign in Ginza, Tokyo, Japan.
On 1st July, in Manhattan Square, three blocks away from Haier American Headquarter, American customers waited in a long queue to purchase Haier air conditioners. 7000 units were sold out in only seven hours.
On 12th August, Beijing Organizing Committee for the Olympic Games made an official announcement at Qingdao Olympic Sailing Center: Haier became the White Goods Sponsor of the 2008 Beijing Olympic Games.
The Pakistan Haier-Ruba Economic Zone jointly constructed by Haier and Pakistan Ruba Group was officially opened. It's the one of the first overseas industrial parks built by China. It's also among the first China Overseas Economic Zones initiated by the Ministry of Commerce of the People's Republic of China.
On 21st, December, Ministry of Finance and Ministry of Commerce launched the Home Appliances for the Rural Areas program in Yantai City. Haier won the most bids in different categories in the tendering.
On the day the Beijing Olympic Games opened, Haier launched One Gold Medal, One Hope School project. During the Olympic Games, Haier, as the only Beijing Olympic Games Offical Sponsor of White Goods, provided 60,000 units of energy-saving innovation products to 37 Olympic venues.
On 1st December, according to the world-renowned customer market research institute EUROMONITOR, Haier became the number one appliance brand in the world, accounting for a market share of 5.1%. It was the first time a Chinese white goods brand was recognized as the world's number one.
Haier, together with the Shandong Pavilion, the America Pavilion, the Italy Pavilion, the New Zealand Pavilion and the Shimao Pavilion, brought the culture and philosophy of innovation to the World Expo. Throughout the history of the World Expo, Haier is the first enterprise to sponsor multiple pavilions via global subsidiary companies.
On 28th July, Haier acquired the home appliance business of Japan SANYO Electric Co., Ltd in Japan, Indonesia, Malaysia, Philippine, and Vietnam. This purchase meant that Haier has achieved a glocalized structure in Japan and southeast Asia and taken a major step in its global branding strategy.
On 11th December, Zhang Ruimin was invited to the top European business school IMD in Switzerland and IESE in Spain to give speeches about the Rendanheyi Win-win Model. “Haier Rendanheyi Cross-culture Fusion” was included in IESE Business School Case Library. IMD conferred him an IMD Management Thought Leadership Award.
On 9th December, Haier and Alibaba announced a strategic partnership, aimed at combing Haier's strength in supply chain management, logistics & warehousing, delivery and installation service, and Alibaba's advantage in the e-commerce ecosystem. Together, both parties committed to building a new, comprehensive system and standards, covering the transportation, delivery and installation of home appliances and large items. This system is open to the whole society.
On 20th March, Fortune published the list of The World's 50 Greatest Business Leaders, with Zhang Ruimin ranking 22nd. Other honorees included Warren Buffet, Amazon CEO Jeff Bezos, and Apple CEO Tim Cook etc. Fortune cited Zhang for “his radical management innovations…very rare in western countries and even ground-breaking in China.”
On 10th March, at the Appliance & Electronics World Expo, Haier released 7 Smart Ecosystems, published the practice of Industry 4.0 Strategy, and launched an online user interactive customization platform and a resource platform for module makers.
On 7th June, Haier Group-controlled Qingdao Haier Co.,Ltd (SH600690,“Qingdao Haier") and GE (NYSE: GE) jointly announced the settlement of the paperwork of Qingdao Haier's acquisition of GE home appliance business. After the settlement, GE home appliance business was officially included as part of Qingdao Haier.
The Haier COSMOPlat industrial internet platform was designated by three major international standard institution ISO, IEEE, and IEC to lead the formulation of international standards of mass customization.
On 18th December, in the celebration of the 40th anniversary of Reform and Opening-Up, Zhang Ruimin, as the representative of excellent entrepreneur in business management, was conferred the title of Reform Pioneer.
On 11th June, BRANDZ™ published the Top 100 Most Valuable Global Brand 2019 in New York. Haier, as an IoT Ecosystem Brand, was included in the rankings. IoT Ecosystem was a new category included in BRANDZ™ in 2019 and Haier was the first brand made to the list.
On 30th June 2020, WPP, the world's largest advertising company and Kantar, a brand research expert company, jointly unveiled the list of 2020 BrandZ Most Valuable Global Brands. As the only IoT ecosystem brand on the list, Haier's global ranking rose by 21 compared to last year, marking a significant improvement in brand value and a leading role in ecosystem branding. Haier also received the world's first BrandZ IoT Ecosystem Brand Award, showing its leading role in global brand evolution.
Selfless Devotion, Nonstop Excellency
Fast Response, Quick Action
An analysis of the historical background: The development of the first generation of the Haier Spirit was closely related to the distinct characteristics of the times. In 1984, Zhang Ruimin and other founders were faced with a difficult situation“none of the glasses in the workshop was intact; most of the workers defecated indiscriminately; the factory had a huge deficit of 1.47 million CNY and was on the brink of bankruptcy; no funds for workers' salary; three predecessors were appointed to manage the factory in only one year's time, but to no avail”. It is under such harsh conditions that Haier Ren (people) embarked on the journey of entrepreneurship. Without the support of capital, technology and talents, Zhang Ruimin and other founders devoted themselves fully to the transformation of the factory and seized the opportunities brought by the Reform and Opening-Up. After setting higher standards and the introduction of the Brand Building Strategy, they have achieved fast growth that lasted for nearly twenty years.
In contrast with other contemporary enterprises, Haier has, from the very beginning, developed a customer-oriented corporate strategy and culture, which is the focal point of organizational excellency. Within Haier, highly efficient procedures that align with the creation of customer values were established; the“customer is always right”principle was enforced to the fullest extent; an innovative daily clear management method was developed which later evolved to Overall Every Control and Clear (OEC) Management ideology.
Externally, Haier puts emphasis on“the customer is always right”and "customers' problems are the targets of our innovation”.
Internally, Haier highlights “quality products made by quality people” and “every employee can be a talent; every employee can race to the number one position”, which have activated the potential of employees to the maximum.
Zhang Ruimin and other entrepreneurs have earnestly practiced the spirit of “Selfless Devotion, Nonstop Excellency” in a “Fast Response, Quick Action” style. Their exemplary performance has turned the spirit and style into the core values of Haier. Influenced by such a corporate culture, each employee enriched these values with their own practice and experience.
At the same time, a world-class management model was developed in the U.S. with reinforced customer satisfaction, innovation and business excellency as the core.
In 1997, Haier, as China's number one home appliance brand, entered its internationalization stage. In this context, in order to increase the morale of employees and aim higher, Haier made a minor change to Haier Spirit from “Selfless Devotion” to “Patriotic Dedication".
During this period of time, Haier went through three strategic stages, namely the Brand Building Stage, the Diversification Stage and the Internationalization Stage. Haier started with nothing, grew from a small factory to a large enterprise and expanded from China to the world markets. Throughout the whole process, all decisions made, including management, research & development and operations, were centered around the development of China. Therefore, that period of time was defined as the age of “Haier – Made in China”.
The most vivid and popular narrative about the first generation of the Haier Spirit is the story of smashing fridges. The Haier Spirit “do our best or don't do it at all” still stimulates each Haier people who is not satisfied with the status quo and brave enough to challenge themselves.
Resource Creation, Global Reputation
Rendanheyi, Quick Resolution
An analysis of the historical background: Haier kept expanding its business domain in the first three development stages. By 2005, in terms of industrial layout, Haier has achieved a comprehensive industrial structure that covers all aspects of home life, including home appliances, furniture and home decoration; in terms of market layout, Haier has established its presence around the globe through glocalization.
On 26th December 2005, on the 21st anniversary of the establishment of Haier Group, Haier announced the fourth development strategy – Global Branding Stage which differs from the previous three stages and features a transition from “the internationalization of Haier” to “the globalized Haier”. Haier's global branding strategy envisions a glocalized Haier that is deeply rooted in different countries of the world and serves the local customers through the utilization of resources. The strategy also aims to build domestic brands that are recognized by respective mainstream markets. Together, those locally-renowned brands will uphold Haier as a world-class brand.
During that historical period, two major changes were transforming the world economy – one was China's admission to WTO, the other the rise of data-driven economy in the wake of internet technological development and applications.
The power of globalization and internet brought as much opportunities as challenges. The aim of Haier's global branding strategy was to seize the opportunities amid the internet era when different countries were woven into the same web and a globalized Haier flourished in all parts of the world.
It is a grand vision – Global Reputation. It's also a role that Chinese enterprises are going to play in the world economy. In the global markets, the benefits of a large population, lower labor cost and reforms in the domestic market of China were losing its comparative advantages, creating barriers for international brands to maintain the status quo. It was thus imperative that Haier people attract new customers and take over markets by way of resource creation. That period of time was defined as the age of “Haier – Made in the World’
The new Haier Spirit was a complete iteration compared with the previous one. Accordingly, Haier Style also went through an upgrade. With "fast response" as the prerequisite, Rendanheyi has ushered in a new era of management. The fragmented user demands brought by the internet called for radical changes to the internal organizational structure and procedures. As a result, the organizational structure of Haier evolved from an inverted pyramid with zi zhu jing ying ti (ZZJYTs, self-management teams) as the basic unit to a flat management structure which later evolved into a grid organization with microenterprises as the basic unit. While Haier keeps redefining management, it also brings new definitions of the enterprise. Once again, Haier takes the lead in transforming enterprise into an entrepreneurial platform and employees into entrepreneurs.
During that period of time, Haier's reform has challenged classic management theories in terms of theory and practice. Top overseas scholars and research institutes became Haier followers instead of Haier sceptics . They first recognized Haier's development and then Haier's management methods and tools. The acquisition of GE home appliance business, a representative enterprise of US industry, has trained the spotlight on Haier in the management world. The whole world was waiting to see how the next world-class management and social model will transform the living fossil of the American industry.
A Trusted Ecosystem, A Shared Platform
Rendanheyi, Microenterprises for Exponential Growth
An analysis of the historical background: The previous period can be called the age of internet. Starting with communication, internet technology brought radical changes to traditional media industry, retail industry and created a myriad of new business models driven by free and co-sharing concepts. Traditional manufacturing industry will be the next to undergo these changes. While internet has become part of the infrastructure, the age of IoT is just around the corner. And zero-distance, decentralization, and distributed system will continue to play a bigger role in the economic development.
The future is here. Traditional empires are collapsing to make room for ecosystems. The post e-commerce age predicted by Zhang Ruimin two years ago is now turning into a reality. Desktop internet has removed the hurdles of information asymmetry; mobile internet has increased the speed of information transmission. In the era of Internet of Everything, the top priority is business integrity. Against the new backdrop, Haier Spirit and Haier Style serve as the guidelines for Haier's transition from a follower in the age of traditional industry to a leader in the age of IoT.
At this historical moment, Haier people will take full advantage of the benefits of IoT-powered socialnomics.
At this historical moment, Haier is faced with a bottleneck: It has been 17 years since the introduction of IoT. However, its development does not translate into an enhanced user experience. Looking closely, the root cause of the stagnation lies with the separation between production and sales. Now, Haier is exploring the best user experience from appliances to internet and to websites. Haier Spirit is not only the shared vision of Haier entrepreneurs but also an answer to the call of the times.
Honesty has become ever more important in the fast development of traditional e-commerce. Honesty and integrity will no doubt be the core competency of the next era. In the early period of entrepreneurship, Haier introduced the philosophy of “Sincere Forever” which can be easily adhered to as long as Haier itself upholds the principle, because enterprises at that time were cut off from the outside world and the production was just assembly line work. But in today's context, it's no longer possible. Each enterprise must transform itself from a self-contained organization to an open ecosystem which requires higher level of honesty and integrity. Only when the whole ecosystem can be trusted can users have a truly faithful experience. A trusted ecosystem is essential to the construction of a co-sharing platform. Only when stakeholders uphold honesty and integrity can the open resources of the ecosystem be utilized to co-create and win together. An ecosystem does not necessarily turn into a platform, but a platform must be based on a trusted ecosystem.
A trusted ecosystem and a co-sharing platform come from reforms in organization models. As the internet prophet Kevin Kelly says “companies will disappear, cities will survive”. Management guru Drucker once pronounced that enterprises will eventually go into oblivion, but organizations are here to stay. Enterprise is also a kind of organization. But future organizations will not be hierarchical and closed enterprises but self-organizations. Many enterprises have realized the importance of platforms but what impedes the transformation is the organization itself.
Rendanheyi is a business model that adapts to the future. Self-powering/organizing microenterprises with self-entrepreneurship constitute a basic unit in the creation of user values. Rendanheyi is also a dynamic balance powered by users. In an iterated ecosystem formed by microenterprises, users experience is constantly improved and enhanced.
Rendanheyi and Microenterprises for Exponential Growth characterize the attitude and style of Haier ecosystem entrepreneurs. Powered by microenterprises, Haier Spirit will be strengthened and Rendanheyi will be the leader in the third epoch-making management revolution after the industrial revolution.
A Trusted Ecosystem, A Win-win Evolution
Rendanheyi, EMC Contract
The fourth generation features an upgrade from a co-sharing platform to a win-win evolution and from Microenterprises for Exponential Growth to EMC Contract.
A win-win evolution means Haier evolves with users, which is an important feature of blockchain – decentralized automated user trust. After decentralization, users can choose to trust the enterprise in order to achieve a win-win evolution. In some sense, users are also creators.
EMC Contract reflects another important feature of blockchain - decentralized automated value transmission. In an EMC contract, all values and all nodes are interconnected.