The incredible growth path of Haier in India and elsewhere
13 November 2019
Haier Appliances (India) P. Ltd is a 100 per cent subsidiary of Haier Group. It likes to remain low-key in its announcements to media, yet manages to be extremely aggressive in the markets for white goods – both in India but more so globally. It is easily the global leader in this segment, and aims to be #3 in India by next year.
With a net revenue of Rs. 3,500 crore in 2018, Haier India has plans to become a $1 billion (Rs.7,000 crore) company by 2020.
At the helm is Eric Braganza, President, Haier India — a quiet, modest man who has engineered Haier’s success in this country. Having completed his schooling from St Columbia’s in Delhi, and a graduation from Shri Ram College of Commerce (also from Delhi), Eric became president of this company in September 2009. It was then a
Rs. 200 crore company. Since then, he has meticulously crafted his strategy to make it one of the most formidable players in the white goods segment in India.
He spoke with R.N.Bhaskar in his first ever interview to the media.
Given below are edited excerpts
Haier has come a long way ever since you took over the reins of this company
True. I took over the reins of the company in India over a decade ago when Haier was still at the initial stages of its growth. I saw there was a tremendous potential for the brand to become a household name and we leveraged this as an opportunity for making Haier one of the leading brands in India.
From the right positioning of the brand for Indian consumers to tapping an entire basket of products that Haier was offering worldwide, there were several factors that contributed to its growth. It was also essential to identify what the Indian market required and ensure we brought those types of products to the Indian consumer. We had to strengthen our dealer network, our after-sales service and adjust our products to the right price point.
Today, Haier is considered to be one of the most preferred brands in home appliances by Indian households. We continue to strengthen the trust that we have developed with our customers by offering them products that complement their evolving lifestyles and are aligned with our motto of ‘Inspired Living’.
We envision becoming a $1 billion company in India and one of the top 3 brands in the home appliances segment by 2020. We also aim to expand our product portfolio along with geographical expansions and focus upon making several investments in terms of increasing local manufacturing, making superior quality products, strengthening our service and distribution network.
What factors helped you grow? Was it pricing, quality, after sales service, or a combination of these? Or are there other factors at work.
It was a combination of pricing, quality, our strong aftersales services and hard work of the employees that has helped up to make a mark for ourselves in the industry.
For instance, we analyzed how the traditional refrigerators are designed in a way where the less-used freezer section is at the top and the more-often-used refrigerator section is at the bottom. Thus, every time the user needs to use the refrigerator section, he has to bend down to access it. Keeping this in mind, we launched a campaign focused on our Bottom Mounted Refrigerators on the narrative “Ulte ko Seedha” in 2016. We were the first-ever brand in the industry to introduce this range of Bottom Mounted Refrigerators which helped in reducing bending of consumers by 90% and enabled greater visibility of the refrigerator section with food items stored at the eye-level.
With the launch of our smart home solutions store in New Delhi, we also took a step closer in making our consumer’s lifestyle future-ready. Additionally, we have introduced many technologically advanced products like the double drum washing machine, self-cleaning technology air conditioner and the industry’s first PuriCool range of air conditioners that come with a built-in air purifier and automatic PM 2.5 air quality detection system.
What is your distribution network like? How many customer service centres do you have?
Currently, Haier has a network of 17,000 dealers across India, comprising 2,000 direct dealers and 15,000 indirect. The brand is further growing its customer base through an extensive retail network of large format stores, multi-brand outlets and a robust dealer network across the country.
We have a large service footprint in the country of Haier Exclusive Service Centers (ESCs), Authorized Service Centers (ASCs) and Direct Service Centers (DSCs) in more than 19,000 pin codes across India. With services like door to door Mobile Service Vans, 24 x 7 toll-free helpline and Dr. FIDO Live Chat feature available on the Haier India website, we want to ensure a quick and efficient service solution for our customers across India.
What would your market share in India be in each of the three major products that you produce: refrigerators, air conditioners and washing machines?
Haier recorded a net revenue of around Rs. 3,500 crore in 2018. This means that we registered a growth of around 50 per cent and became one of the top five consumer durables brands in India in this category. In 2018, we grew 71 per cent in our overall refrigerator business and doubled our sales in the mid and high segment. In the washing machine segment, we grew 55 per cent and in the air conditioner segment we witnessed a growth of 40 per cent. In our Commercial AC business, we witnessed an equally impressive growth of 50 per cent.
Haier is the world’s largest brand in consumer goods. Was it through organic growth or through acquisitions?
Haier Group is positioned No.1 in global home appliance industry for consecutive 10 years (according to Euromonitor International 2018). The Haier Group today has transformed itself from a traditional manufacturer to an open entrepreneurship platform. In the era of the Internet and post e-commerce, the company seeks to 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 competency throughout the Group. Haier aims to become a global leader in the era of the Internet of Things (IoT).
In 2019, Haier Group officially initiated the global smart home strategic footprint with its cluster of 7 brands including Haier, Casarte, Leader, GE Appliances from USA, Fisher&Paykel from New Zealand, AQUA from Japan and Candy from Italy. Each brand has its own unique market positioning and provides outstanding user experiences for end users. In overseas markets,
Haier has 12 industrial parks and 54 factories. In 2018, Haier Group’s global turnover reached 266.1 billion yuan [one yuan is a bit over Rs.10 – editor] with a year-on-year increase of 10%.
One of the factors that aided its growth was a brilliant management strategy by Zhang Ruimin. Could we know more about this?
Haier’s Rendanheyi Model for management is based upon creating a huge value of its services for customers, employees and enterprise and maintain the vitality of venture enterprises in the fast-paced age of Internet.
Under this model we segregated the functioning enterprises within the company into micro-enterprises. These self-organizing micro businesses act as separate entities where the employees do not wait to hear from the boss, but rather listen to their valuable customers. The core idea behind this is to ensure that employees get ownership, decision-making rights and a customer-paid salary. With such a working set-up they themselves begin thinking like entrepreneurs. As a result, we have one of the lowest attrition rates in the country.
Although we have adapted the model, we still believe in continuous exploration to redefine, challenge, and improve our employees’ way of working. Along the way, we will continue to incorporate radical transformations, practices, and principles as we come across in our quest to make work more fun.
Haier has plans to expand its capacity, earlier than expected. Your views.
In Nov 2017, we announced the expansion of our existing manufacturing facility in Pune, Maharashtra into our first industrial park in India with an investment of Rs 600 crore. The facility produces 2 million refrigerators and half a million units each of LED TVs, ACs, Washing machines and water heaters in India.
In Aug 2018, Haier signed an MoU with the UP Government and announced its second industrial park in India in Greater Noida, Uttar Pradesh. That is part of our commitment to ‘Make in India’.
Under this agreement, Haier invested Rs. 3,069 crore for setting up its industrial park in the state over the next four years in two phases. The ground-breaking ceremony in Greater Noida was held in March 2019.
We aim to be a billion dollar company by 2020 and be among the top three brands in the consumer durables segment by then.
How many people do you employ currently?
India is a hub for skilled engineers, researches and scientists and it is imperative for OEMs like Haier to tap this talent pool and provide them with attractive opportunities. R&D and Innovation is at the heart of every operation we initiate at Haier. We see India as a destination to hire competent engineers.. But we still work as a start-up where we tend to tap innovative ideas and provide an open platform to our employees to share new insights that are vital for the growth of our company.
In the coming years, we aim to create almost 4,000 new direct employment opportunities along with over 10,000 indirect jobs through this expansion.