Innovation driving Haier's global growth

A "maker" at Haier examines the performance of a newly developed air-conditioning unit under extreme weather conditions. [Photo/China Daily]

"I will not offer you a working position, but an opportunity to start a business," Zhang told a Beijing media forum in September when outlining the "micro ecosystem" program.

Innovation has always been a buzzword at Haier, helping the company expand in a highly competitive marketplace.

In 2013, the group rolled a funding platform for budding entrepreneurs. These small startups are now working on 470 projects. Many involve "teams" of "makers", a high-tech term used to describe entrepreneurial inventors.

These six-or seven-strong groups have helped design new products for Haier such as a self-cleaning washing machine and a smart oven.

"Our team members not only helped design the oven but also produced the mobile app which allows you to download recipes and improve your baking," Ma Gang, 37, a former telecom company employee who now runs a "micro ecosystem" team for Haier, said.

"People using the system can also share their cooking experiences with other users."

Coupling innovation with the Internet is starting to pay off for Haier.

Back in 2004, the company's global turnover was 100.9 billion yuan with net profit running at 1.28 billion yuan. Last year, turnover was 200.7 billion yuan with net profit topping 15 billion yuan.

Realizing the importance of Internet shopping, Haier has cultivated the sector and now has 36.85 million registered users on its site.

The group's online sales reached 54.8 billion yuan last year, which was a staggering 2,391 percent increase on 2013.

With a 10.2 percent market share, Haier was the world's largest household appliance brand in 2014 for the sixth straight year, according to Euromonitor, a privately owned market research company in London.

"The company's business and management model is based on innovation," Marshall W. Meyer, professor from Wharton School at the University of Pennsylvania in the United States, said. "Haier has stepped away from conventional management thinking."

Naturally, the group's domestic competitors are going through their own technological revolution.

Midea Group is a privately owned electrical appliance manufacturer in Shunde, Guangdong province, and recently invested 1.1 billion yuan in attracting the next generation of product designers or "makers" by rolling out an online platform.