Haier Electronics: New Positioning of Businesses and Rural E-commerce Market are the New Growth Drivers in Coming Years

Friday, 27 March 2015, 08:30 HKT/SGT

HONG KONG, Mar 27, 2015 - (ACN Newswire) - The overall home appliance market was weak amid slowing macro economy growth and the downturn in the property market in 2014. However, Haier Electronics (01169.HK) has achieved outstanding results, which was well above the industry's norm under the circumstance of plentiful challenges and rapid changes. During 2014, the company achieved a new record high of RMB67.134 billion in revenue, representing an increase of 7.8% year-on-year. Net profit increased by 20.1% to RMB2.447 billion. Net operating cash flow was RMB2.903 billion, up 31.4% year-on-year. Earnings per share reached 89.76 cents, which went up by 14.9 % year-on-year. Haier Electronics made great progress in white goods business and integrated channel services business, the gross profit margin and the operation profit of each business segment increased significantly.

The reason laid behind the scene is the new positioning of Haier Electronics' white goods business and integrated channel services business, laying a solid foundation of the steady long-term growth of the company.

Mr. Zhou Yun Jie, the Chairman of Haier Electronics, said "Our success is relied on our new positioning in Internet+ era. We have positioned our products as "smart home" solutions providers to users, and create the best life experience for users. Internally we will engage into "smart factory", migrating from the large scale manufacture to mass production of personalized tailor-making."

Internet + Products - closing the gap between the consumer and Haier
Internet+ is the most popular term in China newly introduced by Premier Li Keqiang in the Conference on last Wednesday. But, the concept of Internet+ has been adopted and evolved by Haier Group in decades.

Early on, Haier Electronics has paid close attention to the industrial 4.0 concept. The company has built its Qingdao electric water heater factory and Foshan front-loading washing machine factory into lights-out factories, through replacing manual labors with automated equipment and robots. These factories are also being upgraded to smart factories, which incorporate users' interactive feedbacks during the entire production process. It has not only enhanced the production efficiency and reduced the labor costs, but also provided the customers with "visualized" experience during the entire process. In nowadays China, we have never seen the third smart factory in the industry.

"Closing the gap between the consumer and Haier is one of the mottos of the company that consistently drive us to enlarge the gap between Haier and its competitors." Mr. Zhou said. So that the provision of the user's best experience of the product is the core value of the company.

Together with its global R&D network, the company has developed many leading and best-selling products, such as the washing machine with an exclusive "clean-free" technology in 2014. The "clean-free" washing machine has rapidly been ranked at top in the high-end top-loading washing machine segment soon after it was launched.

In the internet+ era, the company is committed to incorporate the "home appliance" to "internet appliance", so that the home appliance and the internet can be connected, delivering and distributing a number of services within and outside home, and attracting more and more fans to connect with its devices. At present, the portion of washing machine and water heater with customer interaction features has been rapidly increased, amongst which the open and self-optimizing ecosystem is developing based on the U+ platform of these two types of products. (Developed by Haier Group, Haier U+ platform is the world's leading open smart-home platform that enables seamless connection between different smart devices and home appliances from different brands. At present, over one hundred partners, such as Microsoft, Samsung and Huawei have established connection with U+ platform.)

Household-centric Ecosystem that links Users and Services
In respect of integrated channel services business, the largest revenue contribution segment to the company, is positioned as "Household-centric Ecosystem that links Users and Services", mainly including logistics, e-commerce and distribution business segments.

With the pace of digital adoption is accelerating, the company motivates its franchisees to change its strategic focus from goods-selling to user-experience generation, in order to enhance competitiveness of the retail stores in the internet+ era. The goal here is to help more and more franchisee stores going online and reduce store inventory, establish the retail store to O2O service platform, as well as a user attraction and retention platform, which integrates physical distribution network with internet technologies. As at the end of 2014, the number of online and offline active users of Haier Electronics amounted up to 15.7 million due to O2O operation mode. Moreover, the revenue of E-commerce unit soared 153.9% year-on-year to RMB4,463 million in 2014.

Meanwhile, benefiting from the rapid development of e-commerce in China, the total logistics revenue of the company increased by over 45% year-on-year, in particular, the revenue from third-party business soared by over 150% as compared to prior year. Amongst which, the company's logistics arm, Goodaymart became the primary logistics service provider for merchants selling large home appliances on Tmall.com, leveraging on providing one-stop solutions and "bundling of delivery and installation" services nationwide.

Huge Potential Rural E-commerce Market
Looking forward to 2015, Mr. Zhou said, "Due to the remote geographical locations and the underdeveloped customer segments, the e-commerce platforms and courier companies have not penetrated into rural areas in China. Facing up with the huge potential market of rural e-commerce, the company leverages on its network advantage and will rapidly expand rural e-commerce as the new growth driver in 2015. The company will establish e-commerce services platform in counties and e-commerce services stations in villages, which deal with demands of sales, investment attraction, logistics, life service and finance, to achieve the goal of "selling online stores' products to rural markets, and selling rural market products to cities"."

At present, Goodaymart logistics platform has attracted tens of thousands of track drivers joining its capacity platform, and developed to be the only domestic logistics service network for large home appliance which achieves both "delivering to villages and rural families" and "bundling of delivery and installation". Under this unique logistic platform, drivers can receive orders via mobile APP while the users can rate the driver's delivery services on-site. The platform will automatically optimize the allocation of the vehicle resources/jobs pursuant to the user's feedback, and in return, the user appraisal system drives customer experience to be enhanced continuously.

In 2014, Goodaymart was named one of the most valuable brands in China with a brand value of RMB14.286 billion.

Topic: Press release summary Sectors: Daily Finance, Cloud & Enterprise, IT Individual, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network