Although Haier as a company has been present in the Hungarian market for many years through the Candy and Hoover brands, Haier as a brand is making its debut in the domestic household appliance trade practically this year. In Europe, on the other hand, the Haier brand is becoming increasingly successful and the company is not only increasing its market presence, but is also expanding its production capacity in the old continent. We interviewed the top management of the company in Europe. We spoke to Yannick Fierling, CEO of Haier Europe, about Haier’s strategy and plans.
Haier is currently the fastest growing home appliances company in Europe. The company essentially started on that trajectory by buying Candy Hoover with all its access to the market, established structure and local manufacturing sites. What’s next for Haier? What is your current goal in Europe?
We were able to double our revenues just in four years. I think that shows our strength which is sourced from the devotion of our people working for the company and from our successful acquisition of Candy Hoover which brought growth to all the brands we now have in our portfolio. We want to double our turnover to 6 billion euro by 2026 which is, I admit, big ambition. But we believe in our business model of building a whole ecosystem around our products. Our main goal is to become the European market leader.
The past several years have been very successful for Haier but your story in Europe is longer. How did it all begin?
Haier is a fairly young company; it was only established in 1984 and it started its operations in Europe pretty late. To be precise in 2008 so we already came to a crowded and saturated developed market. Nevertheless, we have been growing every year since 2015. I joined the company the same year and my goal from the beginning was to put the company where it belongs. Especially moving Haier brand to the premium segment. We have been very successful in this but there is still huge potential for more development, in all segments.
You acquired Candy Hoover in 2019. You mentioned that this acquisition was very important. What exactly did this mean for Haier and its European activities?
This acquisition was a perfect match on many levels. Especially geography-wise and portfolio-wise. What I mean is that Haier wasn’t very strong in cooking or vacuum cleaners segment but Candy Hoover was. The Italian company was also a leader in connectivity and smart solutions in Europe. Haier had the same position from a global perspective. Simply put perfect match as I said.
A big topic is the lack of semiconductors on the market. How does that affect your business since you are quite focused on smart appliances and connectivity?
If I go back to 2020, we faced an incredible situation. There was a shortage of components in general, not only semiconductors. On the other hand, there was a huge demand for appliances. Our advantage was and still is the size of the company. We are the biggest group in this business, so we were able to deal with all the challenges better than some of our competitors. We also saw that a zero distance to customers and better support of the local markets became key elements.
The situation in Europe is not easy and it won’t be in the foreseeable future. What are your expectations for 2023?
When times are hard people tend to deinvest. We are doing the opposite. Haier has invested about 180 million euro in its new factories in Romania and Turkey so far and the company will invest another 190 million euro next year.
Where exactly are these new investments going?
We will continue to expand our factories. Refrigerators are manufactured in our new plant in Romania. We also have a really big facility in Eskişehir in Turkey, including a technology and service center. Recently, a new production of dishwashers has been launched here. And this year, at the same location, we will complete the construction of our production of high-end cooking appliances, a segment in which we are now relatively small and have ambitions to grow. We want to significantly expand our range of kitchen appliances soon. And another factory is planned in the same location as we speak.
„Our platforms and production tools give us high levels of customization which means that we can produce an appliance with specific adjustments for Czech or Hungarian market and we can produce it even in China. “
You are working hard on establishing European production, but you also produce appliances for European markets in China. Are those products generally made for many markets globally? Or are they tailored to European customers?
Haier is very different global company because we “think local for local”, i.e. we think locally for local customers. We don’t want to offer one washing machine for the US and its smaller version for Europe. Our aim is to serve the markets and its needs. To do that our production teams have to adapt. Market doesn’t adapt to us; we adapt to the market. And it does not matter whether the product is manufactured in China or in Europe. Our platforms and production tools give us high levels of customization which means that we can produce an appliance with specific adjustments for Czech or Hungarian market and we can produce it even in China. And not only that we can do this, but we actually do this.
Europe is now in an energy crisis that will not go away any time soon. It has a huge impact on the cost of production. How are you dealing with this situation?
The topic of energy prices has two levels. One is on the production side. We weren’t caught off guard in this area because we worked on the sustainability of our production even before the crisis happened. Our goal has always been to reduce energy costs. The other level is on the consumer side because people now take an even more frequent and intense interest in appliance consumption of energy and water. That’s why Haier is putting even more effort into development. We want to offer energy efficient products, not only through traditional innovations, such as vacuum panels or other technical innovations, but also through a modern approach to their use. We are therefore working with energy suppliers across Europe to use connectivity in appliances to communicate with the smart grid. This way, the energy provider can decide when it is most convenient and least costly for the washing machine to do the laundry or the dishwasher to do the dishes. We want to use AI and other modern technologies to reduce energy consumption of our appliances which also “talk” to each other. It gives an opportunity to get everything working better. Next step is obviously creating a complex smart home, whole ecosystem of products working together to achieve better user experience and more efficient operation.
What other innovations should help with achieving better results and higher effectiveness?
For example our WashPass concept which uses a high-end product and an unique detergent solution to offer better gentler care of clothes. We use a multi-component detergent system, whereby the division into individual components allows the washing machine to work with them at different stages of the washing cycle. Just remember that, for example, laundry enzymes and bleach do not get along very well, reducing each other’s effectiveness. Our WashPass system, which also automatically orders new detergents when the existing ones run out, is a piece of mind product. The user gets better results, detergent is used more efficiently and laundry care is better.
The lifetime of appliances is also part of sustainability. But durability and affordability do not necessarily go hand in hand.
The entire industry strives to constantly innovate appliances while making them more affordable. In the past, appliances were quite expensive and not everyone could afford them. The whole industry has succeeded in removing this barrier and making them accessible to a huge mass of customers. But I can assure you that the lifetime of our products is much longer than five years. We are targeting 10 years or more of service. One of the things that helps us do that is connectivity, because we can upgrade the software on the appliances. Can you imagine having a computer or a mobile phone that you don’t update? Their lifetime would be significantly shorter in that case. The ability to update will keep even older models of our appliances relevant, helping with maintenance and servicing. And it will extend their lifetime.
An important issue for connectivity is the diversity of platforms. Do you support any open initiatives to integrate different brands of devices?
We have one app called hOn for all of our Haier, Candy and Hoover appliances and we are a member of Connectivity Standards Alliance so we walk hand in hand with the other members towards open standards. User convenience is, of course, our top priority.
Up until now, connectivity has mainly been used to control and monitor appliances remotely. What other potential do you see? Despite the smart grid you have just talked about.
Haier wants to offer something unique. So having an on/off button in an app is not enough. If you look at our appliances you can find unique functions such as Snap&Wash, a feature that allows you to take a picture of a batch of laundry and let the app analyze it. The user is then offered the optimal program. It’s intuitive, it’s fast and it’s simple. We are also leader in wine cooling. Check out our hOn app. Thanks to its connection with Vivino, we are able to offer recommendations for the most suitable wine you have in your wine cellar for the dish you want to prepare.
We know that you are planning a launch of Haier SDA in Europe. When can we expect them?
Haier is heavily investing in SDA, not only into Haier brand itself but also in Hoover. The company’s goal is to produce five-star small appliances. Our upcoming Haier small appliances will not be represented by your ordinary everyday kettles. Those products will be innovative, and you can expect them this year but I cannot tell you more specifics now.
