Qingdao (PR): Qingdao Haier (SH: 600690), the Shanghai-listed company of Haier Group, was recently recognized as one of Forbes Asia Fab 50 Companies, an annual list of the best publicly traded companies in the Asia-Pacific. After their initial inclusion in 2011, Qingdao Haier made the list again for a fourth time in a row. This year, the company’s market value soared to USD8 billion from last year’s USD5.2 billion; sales revenue also jumped to USD14 billion from USD12.6 billion.
Close analysis of this year’s Forbes Asia Fab 50 Companies reveals that companies from China continue to dominate. As a home appliance manufacturer, Haier focuses on providing smart appliances based on “Internet of Everything” connectivity. They have not only managed to avoid the potentially negative impact of a sluggish housing market on certain product lines, but they have risen to excellence once again to be listed among the Fab 50.
Haier’s outstanding performance can be credited to massive organizational reforms launched at the end of 2012 which aimed to better respond to new market trends and adapt to the Internet age. The company is adjusting its organizational structure in an effort to build a platform-based business, develop employees into creative maker-entrepreneurs, and provide a more personalized end-user experience. The goal of these ongoing reforms is to shift the company from a traditional manufacturer to an open platform for entrepreneurship where employees are encouraged to start their own creative teams and be accountable for their own profits and losses. This move has improved the company’s decision-making efficiency and has enabled faster response to dynamic market conditions and changing consumer needs.
Sources from within the company say that it has taken considerable courage for Haier, the world’s number one home appliance brand, to implement “disruptive” structural reforms on such a large scale. During this uncertain period of transition, the company’s management had readied itself for possible operational fluctuations. But this year’s sales revenue showed strong upward momentum, demonstrating the initial benefits of these reforms. In the 30th year since its founding, a more dynamic Haier Group is on track for continued growth, epitomizing a successful corporate transition in the Internet era.
According to the company’s 2014 interim report, released on the same day as the Fab 50 list, in the first half of the fiscal year, Qingdao Haier achieved revenues of RMB 47 billion, up by 9.16% year-on-year; profit attributable to shareholders of the company increased by 20.84% year-on-year to RMB 2.58 billion. Not only has this fast growth far exceeded market expectations, but all indicators point to the quality and sustainability of this growth. Increasing profitability is also expected to continue. The company has far outpaced industry peers in core heavy appliance segments, especially for air conditioners, refrigerators, washing machines, and water heaters.