BIZCHINA / Zhang Ruimin
Haier's Zhang strives to create global brand name
(People's Daily)
Updated: 2000-12-24 14:07
While an increasing number of overseas investors swarming into China, the
world's largest potential market, Chinese entrepreneur Zhang Ruimin is
doing the opposite. He is busy establishing production lines in other
countries.
Over the last few years, Zhang, CEO of the Haier Group, China's largest
home electrical appliance manufacturer based in the city of Qingdao in
east China's Shandong Province, has already had production centers put
into operation in the United State, Indonesia, the Philippines, Malaysia
and Iran, all making home electrical alliances under the brand name
"Haier."
The latest one, a refrigerator plant in South Carolina, in the United
States, cost 30 million U.S. dollars to construct and is designed to make
500,000 refrigerators annually.
"We can't be considered a success unless overseas consumers no longer
regard Haier as a Chinese brand name but a global one," the 51-year-old
Zhang said in an interview at Haier's headquarters in Qingdao.
Zhang spent only 15 years turning the money-loosing Qingdao Refrigerator
Factory, Haier's predecessor, into the country's leading home electrical
appliance producer, setting an example for other state-owned enterprises
in the structural reforms.
From the early 1990s, Zhang seized the chance brought about by economic
globalization to start Haier's international business.
His ultimate goal is to put Haier on the list of the world's top 500
corporations, which at present does not include a Chinese manufacturer.
"Globalization, especially China's anticipated entry into the World Trade
Organization will make the country wide open to foreign competition,"
Zhang said. "Only by actively taking part in global competition can we
seize a chance to survive."
Though with an MBA degree from the Chinese University of Science and
Technology, Zhang, who believes that a successful entrepreneur should
also be a philosopher, is quite familiar with such Chinese classics as
The Analects, a collection of about 500 sayings of ancient Chinese
thinker Confucius and his major disciples, and Art Of War, a famous
military book written by Chinese military strategist Sun Wu about 2,500
years ago.
Enlightened by the fact that there is always a sustainable worldwide
market demand for Tsingtao beer, whose main brewery is only a short
distance from Haier's office building in Qingdao, Zhang realized that the
key to a successful multinational corporation lies with the establishment
of a reliable brand name abroad.
He then had more than a dozen information and design centers set up in
such developed countries as the United States, Japan and France, which
mainly employ local talents, hoping to get closer to local consumers and
their tastes.
"Local designers know about the demands of local consumers better than we
could," Zhang explained.
As a result, Haier has been able to turn out an average of 1.3 new
product designs daily for six years running and this year became the only
Chinese member of the Spain-based World Design Organization.
Zhang is particularly conscientious about quality, vowing to make Haier a
synonym of good quality and reliability.
After taking over the Qingdao Refrigerator Factory in 1984, one of the
first things he did was to smash 76 poor quality refrigerators with a
hammer, which astonished or even rocked the whole Factory. He insisted
that inferior products be no more than wastes and not be distributed from
the factory, although such inferior products still sold well in sellers'
market in China then.
"The move was intended to increase employees' consciousness of the
importance of quality," Zhang said. The hammer Zhang used is now
displayed in Haier's exhibition hall as a signal to alarm both the
employers and employees.
Novel designs and improving quality have both helped increase Haier's
competitiveness and public recognition, according to Zhang.
Recent statistics indicate that Haier has opened some 30,000 sales
outlets overseas, with its market extending to more than 100 countries
and regions. It commands a 25 percent share of the small refrigerator
market in the United States.
Haier began its ascent by licensing refrigerator technology from Liebherr
Corp. of Germany in 1985 and adopted its name from the "herr" in the
German company's name, but now it exports a growing number of
energy-saving refrigerators of its own design to the European country.
In recent years Zhang has shifted his focus to the localization of
production in foreign countries and has had plans to base one-third of
Haier's production lines abroad.
"You can't be an international company if you only make things at home
and export them," Zhang said.
Haier now manufactures more than 9,000 products, including not only
refrigerators and washing machines but also cell phones and laptop
computers, with sales growing at a rate of more than 80 percent annually
on average for 15 consecutive years to reach US$3.2 billion in 1999.
All this has helped Haier lead the 6,000 businesses funded by Chinese
investors abroad, which involve a combined investment of US$6.95 billion.
Zhang's achievement has been written into textbooks of the Business
School of Harvard University in the United States, and the Lausanne
Institute of Management and Development of Switzerland, which issues the
World Competitiveness Year Book annually.
A survey of corporate executives published by the London-based Financial
Times in December 1999 listed Zhang as one of the world's 30 most
respected business leaders. The other two Asians on the list were Hiroshi
Okuda of Toyota and Noboyuki Idei of Sony.
However, Zhang is still soberly minded, saying that Haier is far away
from joining the world's top 500 corporations. In this fast changing
information age, any business may be left behind unless you continue your
creation and innovation to your advantage, he said.
(For more biz stories, please visit Industry Updates)
Most Popular Stories in 48 Hours
� Wine maker aims for global clout
� On the ball
� Guangdong swaps out oil for coal
� EU may slap tariff on TV makers
� Huang's GOME stake sold for $900m
Today's Top News
� China displeased with Berlusconi baby remarks
� US filing trade case against China
� Chinese version of Apprentice coming
� Keeping Tyson at ear's length
Top Biz News
� Report: How best to invest overseas
� List of top 100 real estate firms announced
� More wind power on the horizon
� Deloitte faces double trouble in China
� EU may slap tariff on TV makers
Chinese language
