‘We’re not just here to ship products from China; we’re investing in Europe’ | fDi Intelligence – Your source for foreign direct investment information

Chinese domestic appliances company Haier has maintained buoyant global performance since the onset of the pandemic, expanding heavily in Europe where it saw an impressive 20% sales growth last year.

The company, which is headquartered in the Chinese port city of Qingdao, acquired the Candy Hoover Group in 2019 for €475m to expand into the European market. In the four years since, Haier has doubled the size of its European business.

David Meyerowitz, CEO of Haier Europe’s UK division, tells fDi why the company has been successful in Europe, how its ‘rendanheyi’ management structure allows it to carry out tailor-made innovation and why the fact it is Chinese-owned has not slowed it down. 

Q: To what do you attribute the success of Haier in Europe?

A: We want to leverage our main strengths. First, we’re unusual in that we have three brands that stretch right from the entry points of the market through to premium, so as the market changes shape and consumers uptrade or downtrade, we have a product for where they need to be.

Second, we have been very quick to leverage consumer needs in Europe, so we’re focused on advancing developments on energy-efficient appliances, such as washing machines.

The other thing I would say is that while our competitors have been shy to invest, we haven’t. Since acquisition, we’ve opened three new factories: a tumble dryer factory in Turkey in 2021, a fridge factory in Romania in 2021 and a dishwasher factory in Turkey in 2022.

Q: A lot is made of Haier’s management structure, ‘rendanheyi’, which allows employees to help shape the consumer experience across design and product development. What does this mean in practice?

A: It began as a progressive business management model started by Haier’s founder and chairman Zhang Rumin. It loosely translates as the “connection between the employee and the value/needs of the consumer”. Essentially, the goal is to try to escape the challenges of a traditional pyramid-shaped, top-down organisational structure by looking at those that would typically be at the bottom of the pyramid and recognising that they should lead on certain issues, because they are closest to the consumer.  

‘Rendanheyi’ allows us to think locally when there are big local differences. For example, in the UK we consume a lot of frozen food and we like our ice in our drinks. Europeans tend not to consume frozen food and they don’t have the same passion for ice. So our fridges need to be designed to reflect that customisation.

Q: As a Chinese-owned company expanding in Europe, have you faced any difficulties either from regulators or consumers?

A: I’ve got no experience of any difficulties or concerns expressed by customers or regulators whatsoever. Absolutely nothing. In fact, I would probably say the opposite when it comes to consumer appetite for Haier, as we’ve found that the younger generation is keen to try new brands.

Otherwise, our expansion in Europe through Candy is built on a platform that is very well known and trusted. So Haier’s expansion is not just a new brand from China that’s arrived here, but is built on a long-standing structure. And as I touched on already, we’re not just here to ship products from China; we’re investing hugely in Europe for production with the new factories supplying the European market.

Q: With increasing political attention on Chinese companies — particularly on those with big data operations, such as Haier through its smart home business — does it concern you that being a Chinese-owned company could become an issue in Europe?

A: I can honestly say that no concern has been expressed at all.

You touch on the issue of connectivity and data in smart homes, and this is something we’re very careful about. Our smart home app ‘hOn’ only houses our European systems; all the data is held in Europe and is subject to GDPR. We don’t want to make any effort to link European data with Chinese data, or vice versa. 

This article has been edited for clarity and brevity. It first appeared in the June/July 2023 print edition of fDi Intelligence.