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Haier Group Japan Region

Interview with Haier Group Japan Region CEO Jingguo Du

The Haier Group, a major household appliance company that sells products through the Haier brand, entered the Japanese market when it established a subsidiary in Osaka in 2002. We talked with Haier Group Japan Region CEO Jingguo Du about his thoughts on the company entering Japan, the Japanese market's traits as seen from a global company's perspective, and his expectations about Osaka's future.


Jingguo Du
In 1963, born in Tsingtao, Shandong Province, China
Bachelor of Mechanical Engineering/Shandong Industrial University (now Shandong University)
EMBA/the National University of Singapore Business School
1986　Start working at the Manufacturing Department, Haier Group
1989　Chief Technical Officer /the Manufacturing Department, Haier Group
1992　Head - General Manager / Haier Group After Service Center
1993　Head/Haier Group Advertisement and Art Center (Marketing) General Manager/ Haier Sales Company
2002　Director / Haier Japan Sales Co., Ltd.
2010~2016　Representative director - President / Haier Japan Sales Co., Ltd.
　　　　　　Vice President/Haier Group
　　　　　　Representative director - President / Haier Asia International Co., Ltd
　　　　　　Representative director - Chairman /Haier Aqua Sales Co., Ltd. (now Aqua Co., Ltd.)
2016    Representative director - President - CEO / Aqua Co., Ltd.


1) Please tell us about your company.

The Haier Group is a general household appliance manufacturer founded in Tsingtao, Shandong Province, China in 1984. We currently have nearly 100,000 employees worldwide. Producing 80 million large white goods and 30 million refrigerators a year, we have the largest production capacity and volume of any household appliance manufacturer in the world. We sell these products through seven brands across the globe, including our acquisitions, such as the white goods business of former Japanese company Sanyo, GE from America, and Fisher & Paykel from New Zealand. Our worldwide sales of major appliances have been the top among any household appliance brand for 13 consecutive years. We have a wide range of businesses in addition to home appliances, such as finance, real estate, medical care, and culture.

After following a five-stage approach that involves a brand strategy, multifaceted strategy, global strategy, global brand strategy, and network strategy, in 2019 we entered a sixth stage, the eco-brand strategy, by which we are pushing forward toward growth into a global IoT eco-brand.

2) What are your thoughts when you look back on the 20 years since you entered the Japanese market in 2002?

This year marks 20 years since Haier started doing business in Japan and 10 years since we founded Aqua. I think the Haier brand can bring global resources into Japan to provide Japanese consumers with unique, high-performance products that stand out from Aqua. Aqua is a premium brand we created in Japan in 2012. We want to give the world Japanese quality and technological prowess.

In the 37 years since the Haier Group's founding, we have always valued the entrepreneurial spirit. That spirit is present throughout our company, and every day our employees think like entrepreneurs in their work.

When we entered the Japanese market in 2002, the first business we founded, our first foreign brand in Japan, started with niche products. Our second founding came through the 2012 M&A with Sanyo. We revived Sanyo's refrigerator business and we established our only white goods manufacturer in the Japanese market. The business had a three-part integrated structure in Japan involving R&D, production, and sales. Then, in 2022, was our third founding. This is our high-end shift as we move forward as a general household appliance manufacturer in Japan.

By 2021, we had shipped a cumulative total of more than 23 million white goods in the Japanese market. Over the past few years, we've been shipping out over 2 million products annually. We've won the trust of Japanese consumers and they have commended our company's business philosophy, for which we are grateful.

3) Tell us what difficulties you face as a Chinese company doing business in Japan and how you dealt with them.

No company in the world, especially one that was created through an M&A, can continue doing business by following the old management's way of thinking. Rather than innovating along the same trajectory as the old model, you need novel ideas that nobody has thought of before. Otherwise, you can't keep up with the changing times.
All employees and all corners of the company participate in reforming management and systems from all angles and all processes. Through a three-part process of breaking, standing up, and merging, we have implemented a variety of innovations.

Breaking means tearing apart systems and ideas that are behind the times. For example, we abolished the seniority system. Next is standing up. There are good traditions in Japan. For example, we carry on the customs of teamwork, collaborative organizations, and being aware of quality. Meanwhile, we've started up a system where anybody can gain a promotion if they take on an ambitious goal. That means anybody can become the CEO. Every employee approaches their work as if they were the CEO. Merging refers to the combination of Japanese and Chinese corporate culture, ideas, and thinking. Merging cultures, in particular, is what we consider most important.

Personal income is tied to achieving goals at the company. It's a win-win situation. The company shares its profits with the individual. By arranging various employment statuses and creating mechanisms for thinking about goals, we are building a flexible, vibrant organization that motivates employees.

4) From the point of view of a global company with seven brands across the globe, what traits do you see in the Japanese market?

Since 1998, the Haier Group has had a serious global strategy with a three-part slogan. Translated from Chinese, it basically means expand overseas, localize, and go high-end.

The first country we expanded into was Germany. Instead of putting together another company in China and exporting, Haier took in technology to export our own products to compete on quality. For localization, we have constructed factories in America. Lastly, we started going high-end by entering the Japanese market.
Haier was the first Chinese home appliance manufacturer to enter the Japanese market and the first Chinese company to advertise on a billboard in Ginza. We're also the first Chinese home appliance brand to sell our own products in the Japanese market.

The Japanese market is very competitive. LG, GE, and other foreign brands have pulled out. Our global strategy has succeeded because we have won the favor of Japanese consumers, who are the most selective in the world. In addition, because the Japanese market has consumers of a high level, we worked very hard to satisfy their needs. Even though we've had success in China, it's been difficult making the Haier brand shine in the minds of Japanese users. We've always endeavored to earn praise for the Haier brand.


5) How do you feel about the business and living environments in Osaka?

I am very well acquainted with the city of Osaka. I lived here for over a decade, but three years ago I moved to Kyoto. I work in the modern city of Osaka, and I live in Kyoto, which represents Japan's history and culture. Isn't that great?

For the city's future, I'd like Osaka to make plans for a better living environment. I would like Osaka to build itself into a modern city by creating a second and third Umeda district, and to strengthen regional integration between the Kansai region's six prefectures, so Osaka can become a bigger and more international metropolis.


6) What are you looking forward to about the future of Osaka, which will host the World Expo and has big development projects planned?

A time is coming when everyone will have every aspect of their lives connected over the internet. I think Expo 2025 Osaka, Kansai should be the impetus that turns Osaka into an IoT city. And that would be an opportunity for Haier to invest in IoT home appliances. I'd like us to get involved in services and technology that connect everything over the internet, such as clothing, food, housing, transportation, health, education, nursing, and medical care.


7) Can you share any ideas for further increasing your name recognition in Japan?

Haier's corporate philosophy of all employees being in touch with user needs sets a goal of always creating added value for the user. Every division must create added value for the user. Users also recognize that Haier's philosophy has always been about constant devotion and prompt action.

Even though Haier has had the largest share of the global home appliance market for 13 straight years, we are still not number one in Japan. Our mission is to continue pushing ahead toward that goal.


8) What does group founder and Honorary Chairman Zhang Ruimin expect from developing your business in Japan?

Haier's founder and honorary chairman, Zhang Ruimin, says, "It's simple to merge with capital, but integrating culture is what determines success or failure." Haier did not simply acquire a company in Sanyo Electric. We also took in its employees and families. We embarked upon a new journey to develop the Sanyo brand's technology.

To give an example, we brought together different people and different corporate cultures into a salad that we connected with one dressing. This represents our corporate philosophy of all employees being in touch with user needs. Those people include both employees and users and their needs. Merging cultures will remain a part of Haier's philosophy.

Honorary Chairman Zhang's business philosophy of all employees being in touch with user needs, which has been celebrated in the global economy, has led to thorough localization and its success. To answer the needs of users, all employees create value. We set goals for every process, bring departments with different functions together, and create a flat and open organization. We create mechanisms that allow everyone to share the profits when we exceed our goals.

Localization is a managerial policy in the Haier Group. We localize our personnel, our products, and even our business strategy. Currently, fewer than two percent of our employees assigned to Japan come from the headquarters in China. Most of the employees working at our company here are Japanese people hired in Japan.

We are able to implement thorough localization because we have mechanisms for reform and invention with localization based on our philosophy of all employees being in touch with user needs.


9) Tell us about the Haier Group's role in the Japanese market and what you'll be doing in Osaka in the future.

We have one of our group's R&D centers in Japan. It has an incredibly important position.

Haier established the Haier Asia R&D Center, one of the largest development centers in Japan by a foreign manufacturer. It has the three-part integrated structure of R&D, production, and sales in Japan. In addition, the center develops products that stand out in terms of internationalization, high performance, technology, and design. One thing that distinguishes the R&D Center is that rather than developing everything in-house, we have built a network that even allows regular consumers to make suggestions and get involved in development.

I think it's important to continue investing in Japan's market. That means investing in the brand and product development, but the most important thing is investing in developing talent. Through work that motivates employees and that makes them proud in front of their families, we invest in training personnel, especially younger employees, so they can soon become capable talent.

Change is happening with astonishing speed these days. It's not easy for any company to say they're successful. What a company can do is to move forward with the times. Only companies like that will survive. How should our company approach Japanese society, and can we draw up the correct strategy fast enough? I think this is extremely important. Even if you ignore our experience with success thus far, I think it's incredibly important to be ready to take on new challenges.

Our aim for the future is to become the top global brand, an eco-brand, and the brand that Japanese consumers trust and recommend. The Haier and Aqua brands seek to be true partners in consumers' lives.


10) Can you say something for companies that are thinking about doing business in Osaka?

Have the courage to create good relationships in different countries around the world, people of different ethnicities, and with different companies, and to think about innovation, be ready to take on new challenges, and compete from Osaka.

I expect Osaka will have a good economic cycle that allows you to further thrive and be a leader in the world, while also increasing revenue and spurring consumption.