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Vol. 3, #9, November 2013, No. 33

Midea Mascot

Midea Chile Taps into The Animal Kingdom to Prepare for Its Brand Launch.

Advances Newsletter, November, 2013

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ADVANCES Newsletter

Contents

Midea Advances Newsletter is published monthly

by the International Strategy Department of

Midea Group. We welcome all comments,

suggestions and contribution of articles, as well as

requests for subscription to our newsletter. You

can reach us by email at: [email protected]

Address:

ADVANCES, International Strategy Department

Midea HQ

No. 6 Midea Road

Beijiao, Shunde, Foshan, Guangdong

P.R.C. 528311

Tel: +86-757-2360 4714

Web: www.midea.com

Managing Editor:

Mandy Wang

Regular Correspondents:

Anggie Cai

Alex Cheng

Himani Joshi

Blinda Li

Amber Liu

Crystal Lun

Tony Miao

Sue Ou

Sandra Sun

Yongen Wang

James Yu

Daniel Zhang

Peck Zhao

NEWSLINE

Midea RAC Appears in

Energy-Efficiency Star

Approval Catalogue PAGE 4

MCJV Brazil Launches New

Midea Campaign PAGE 3

Midea Strategic

Transformation Shows Initial

Results PAGE 4

Midea Six Sigma & ACE:

The “Win-Win-Win” Approach PAGE 7

Midea Singapore Well-

Positioned For Long-Term

Growth PAGE 6

MDV ELITE CAMP (8th Semi-

nar, Nov.) PAGE 11

PAGE 18

FEATURE

SNAPSHOT

PEOPLE

German Quality Meets

Chinese Dynamism PAGE 15-17

Midea Front-load Washer

Receives Good Design

Excellence Award in South

Korea PAGE 9

Midea Laundry Division

Rewards Significant

Contributions and Backbone

Elites of the Magic Water

Cube Project Receive Prize of

RMB 500,000 PAGE 8

RAC Works with the United

Nations for a New Refrigerant PAGE 10

GMCC Taking Leadership

Role in R290 Alternative De-

velopment PAGE 10

Innovative and Surprising PAGE 14

Philippines Media Visit

Midea PAGE 8

Midea Ranked 5th Most Val-

uable Chinese Brand, Little

Swan Also Listed in Top 100 PAGE 12

Midea CAC Kicks Off 19th

Global Technical Training PAGE 13

GMCC Wins Top Prize for

Technical Development at

China Household Electrical

Appliances Conference PAGE 5

New Washers Debut at the

Wuxi Home Fair PAGE 5


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MCJV Brazil Launches New Midea

Campaign By James Yu

A pproaching the summer, which is also the peak sea-

son for the residential AC business, Midea Carrier JV Brazil re-

cently launched a new brand campaign with the theme of “Viva

mais cade monmento” (“Live more for

every moment”). Since October 20th,

this campaign has been shown nation-

wide across major ad channels such as

print, radio and cable TV.

After defining the key value and

the position to be aimed for in the mar-

ket by a brand research study some

months ago, MCJV Brazil established a

new brand book for Midea and commu-

nications material for the country, con-

sisting of new advertisements and pro-

motional materials, which convey the

warmness and comfort felt by family

members when using Midea products.

The idea of the brand is also expressed

through these, the idea that one can find

happiness, and enjoy every moment of

daily life more than ever before. The

campaign’s first step on October 20th

was its publication in the magazine Veja , the

most popular magazine in Brazil, followed by a

placement during one of the most popular

morning news shows, and throughout the fa-

vorite channels on cable TV.

Consult the attached schedule, and tune in to

see and hear the new campaign!

Midea on the Radio

Between 7:00 and 7:30am, the newspaper First

Time (Radio Bandeirantes) publishes Midea

brand ads in its daily newsletters. Ads on Band-

News FM can also be heard between 6:00am

and 7:00pm, up until December 8th.

Midea on TV

Cable TV ads will also air during primetime

hours on Fridays. Up until December 6th, mil-

lions of viewers will see these ads on stations

such as TNT, Fox, and Mega Pix SporTV.

NEWSLINE


4

Midea Strategic Transformation Shows Initial

Results By Mandy Wang

I n covering the recent Midea expansion into the Philip-

pines, a local newspaper there, The Philippine Star, published a

full-page article titled, “How China’s Midea went from appliance

maker to global player”, giving a broad overview of the compa-

ny’s growth both here in China, and worldwide.

The article names Midea as a role model for Chinese busi-

nesses to go expand outside of the country, rather than narrow-

ly focusing solely on China’s considerable market. While other

companies based in South Korea and Japan had no choice but

to go outside of their home markets, only a relatively

small number of Chinese brands have followed Midea’s

strategy of addressing the global market in parallel with

their domestic business efforts: Huawei, Tsingtao, and

Lenovo are a few such brands that have found real trac-

tion worldwide.

From its humble beginnings in 1968, Midea has

become a global conglomerate with annual revenue of

more than 100 billion RMB in 2012. In explaining all

achievements of Midea, the author, Wilson Lee Flores,

concludes with 10 essential key reason Midea’s success: 1.

Positive brand image building; 2. Visionary leadership; 3.

Integrated manufacturing facilities; 4. Professional man-

agement; 5. Success in the domestic market; 6. Active

global expansion; 7. Strong international partners; 8.

Carefully planned M&A; 9. Significant reinvestment in

R&D; 10. Active corporate social responsibility.

NEWSLINE

Midea RAC Appears in Energy-Efficiency

Star Approval Catalogue By Crystal Lun

T o promote high efficiency products and direct the

transformation of production and consumption, the MIIT

(Ministry of Industry and Information Technology of The Peo-

ple’s Republic of China) started an energy efficiency evaluation

in 2012 for products that participate in the Project

for Energy Saving & Benefit to People.

The evaluation focuses on performance in

terms of energy efficiency, and aims to provide con-

sumers a guideline for products that are economical

and environmentally friendly. The high visibility of

the Energy-Efficiency Star logo allows consumers to

recognize approved products quickly and easily.

The 2013 Catalogue of Energy-Efficiency Star products

was recently released, and covers 11 categories of household

appliances, among which Midea has 3 air conditioners, including

a split model and two inverter floor-standing models.

The Energy-Efficiency Star approval is valid for 2

years, while the MIIT works jointly with relevant de-

partments to study further and establish proper incen-

tives for government procurement, bulk company

purchases, daily consumption, and to raise awareness

and popularity of energy efficient products.


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GMCC Wins Top Prize for Technical Devel-

opment at China Household Electrical

Appliances Conference By Hailong Tang

O n Halloween, the last day of

last month, the China Household Electri-

cal Appliances Conference, one of the

most significant events in China’s house-

hold electrical appliances industry, was

held in the city of Wuxi. The China

Household Electrical Appliance Technolo-

gy Conference is a professional platform

where edge-cutting technologies are show-

cased and cooperation and partnership is

built. During the show, Midea’s motor

division, GMCC, relying on its strength in

innovation, was awarded First Prize in

Technological Development for its

“Application of Gas Injection Compressor

Technology”.

The gas injection rotary compressor using this new tech-

nology was released back in September by GMCC, marking a

key technical breakthrough in compres-

sor development. The gas injection tech-

nology allows heating under low temper-

atures, however, due to physical limits,

there is still great difficulty in applying

the gas injection technology to rotary-

style compressors. In fact, GMCC start-

ed studying these structural limits in

2009, applying the gas injection technol-

ogy to inverter rotary compressors, and

ultimately, it was the independently de-

veloped “Flexible Check Valve Technol-

ogy” which solved the problem of gas

injection valve reliability when applied in

rotary compressors. Currently GMCC

has applied for 9 patents connected to

this research, and two inventory patents

have been applied for by way of PTC international application.

NEWSLINE

New Washers Debut at the Wuxi Home Fair

By Blinda Li

T his past October 11th, the Wuxi Home Expo/Wuxi

Autumn Fair officially opened at the Wuxi

Taihu Lake International Expo Center,

where the Laundry Division unveiled 30

washers for their debut to the public. Af-

ter the opening ceremony, Du Tonghe,

Vice President of the China Light Industry

Association and Xu Rongyun, Director of

the Jiangsu Light Industry Association,

among others, came to the Midea booth,

asking about the company’s recent

achievements in innovation, encouraging it to push forward in

growing its brand globally.

This exhibition carried a theme of

"quality living, tasteful living", built on

a trade service platform linking real

estate, home decoration/furnishing

and home appliance industries, in or-

der to promote consumption for con-

venient and effective new consump-

tion patterns.


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Midea Singapore Well-Positioned For

Long-Term Growth By Alex Cheng

M idea Singapore received tremendous feedback on

its new product range during the 2nd Annual Midea Dealer Ap-

preciation Night, held last month on October 31st, Halloween

Night, at the newly-renovated Parkroyal Hotel on Beach Road.

The evening event was well-attended by all the movers and

shakers from the local electronics retail industry. The event was

organized to recognize and honor the best performing dealers in

Singapore, and to showcase the latest product models set to

debut in 2014. Appearances were made by special guests from

Midea HQ, including Justin Liu, Midea MID’s Managing Direc-

tor for ASEAN, and Arthur Huang, Vice President of Corporate

Marketing.

Speaking at the end of the evening, Wesley Lim, Country

General Manager for Singapore, who has been at subsidiary’s

helm since its inception three years ago, remarked, “For such a

new brand, we are most encouraged by the very positive feed-

back and response from our dealers tonight. It proves the tire-

less effort we have invested in building our channels, stringent

product selection, and strong support from our head office,

have finally be-

gun to pay off.

We will continue

to fine-tune our

formula to deliv-

er optimal results

for the brand

and our custom-

ers going as we

move forward.”

The latest

models set to

debut in 2014

include the Oasis

model air condi-

tioner, with Wi-

Fi control via

Android or iPh-

one smart

phones, the Water Magic Cube model washing machine, with

iAdd automatic dispens-

ing technology and One

Touch Smart Wash fea-

tures, and a range of

award-winning small

appliances including

Midea’s micro-

computerized rice cook-

er, slim-profile induction

cooker, and the all-new

DC motor standing fan

with wheel button re-

mote.

NEWSLINE


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Midea Six Sigma & ACE:

The “Win-Win-Win” Approach By Sherry Liu

O f course, we are all familiar with the idea of a so-

called “win-win” scenario. But what entails a “win-win-win”

situation? This involves a positive outcome for Midea custom-

ers, for Midea as a company, and for everyone in the company

as Midea employees. As part of the Global Operations Excel-

lence Initiative started by MID Oper-

ations Management, this thinking is

now coming into action with Midea’s

globally launched Six Sigma Initiative.

The aim of the team is to facilitate

Midea’s overseas strategy, by achiev-

ing the highest process efficiency in

all business areas. Six Sigma is a set of

strategies, techniques, and tools for

process improvement with core char-

acteristics to help improve customer

satisfaction and reduce cost of re-

sources. Six Sigma has successfully been successfully implement-

ed for many years by many world-famous companies, such as

General Electric, Ford, Siemens, Samsung, and Motorola, the

company which originally conceived the Six Sigma program.

For the past two months, MID team leaders have been

involved in Midea HQ’s Six Sigma Green Belt training seminars,

organized across the company’s functional departments, divi-

sions and selected launch subsidiaries. The goal: to build a pro-

fessional team with intimate

knowledge of Six Sigma

methods and tools within the

company, to lay a solid foun-

dation for a new efficiency-

driven culture. It has been

expressed by many that, after

participating in this training,

they have not only improved

their knowledge about Six

Sigma concepts and tools, but

also have been inspired to

learn more about how to apply these tools, and how to analyze

the results of such implementation.

After successful completion of the internal training sched-

ule, Six Sigma project selection is planned for December 2013.

The first phase of Six Sigma project execution and implementa-

tion in MID functional departments, Vietnam, and FMCC, is

scheduled for December 2013 and Q1 2014. However, MID’s

Six Sigma long-term implementation plan is built on three phas-

es: The tools & methods introduction be known as Phase I

through 2013 and 2014, value generation in 2015 and 2016 will

make up Phase II, and Phase III will consist of the final work-

ing culture transformation from 2017

and beyond. Ultimately, the Six Sigma

initiative will be rolled out across all

global subsidiaries of MID.

A similar program at Midea’s

JV partner UTC, called “Achieving

Competitive Excellence” (ACE), has

already been implemented successfully

at Midea/UTC JVs like Midea-Carrier

ABC and Miraco. ACE is a compre-

hensive approach to create new levels

of customer satisfaction and business

performance. ACE and Six Sigma are both for management

improvement by using similar tools (like 5S, Lean, TPM, Value

Stream) but with different criteria, approaches and techniques.

As the SGMC (Midea Carrier Management System developed

from ACE tools concepts) has already generated projects that

provided improvements for quality, safety, 5S, and approxi-

mately USD$500,000 savings per year since the inception of

Midea-Carrier Brazil, this success story can inspire everyone at

Midea to build a Six

Sigma culture

throughout the rest

of the company.

Because of the suc-

cess of ACE, MID’s

plan to rollout out

Midea’s own Six

Sigma program

across the company

will involve a coex-

istence of Midea Six

Sigma and ACE within MID for approximately 3 years, based

on different subsidiaries’ situations. Once Midea Six Sigma cul-

ture has matured sufficiently, these two programs may be

merged.

NEWSLINE


8

Philippines Media Visit Midea

By Yongen Wang

A group of reporters from the Philippines media paid

a 3 day visit to Midea Group, from November 6th-8th. Their

tour included Midea’s headquarters building, the Refrigeration

R&D Institute, and the company’s microwave oven factory. The

journalists took many photos and interviewed several personnel

to support the stories they would be writing about Midea back

home. The visiting journalists were mostly from commercial and

lifestyle segments of the media, asking about the company’s

growing scale and high-end manufacturing ability.

In addition to other journalists, a popular Philippines tele-

vision show known as Rated-K came to the company’s head

office especially for filming. Not only did they report on Midea’s

air conditioning laboratories and the vertical integration of the

company, they also recorded specific demonstrations of Midea’s

newest products. On top of everything, Rated-K actually record-

ed themselves cooking food on camera using Midea’s products,

which will air with the rest of their program in the Philippines.

Journalists indicated that their written reports would be

published throughout November and December, and that the

Rated-K television episode featuring Midea would be broadcast-

ed in November.

NEWSLINE

By Blinda Li

Laundry Division Rewards Significant Contribu-

tions and Backbone Elites of the Magic Water

Cube Project Receive Prize of RMB 500,000

T o help cultivate the culture of continuously recogniz-

ing employee talent and technological achievement, the Laundry

Division has allocated a special fund of 500,000 RMB to reward

the top performing teams in the Magic Water Cube Project.

Laundry Division’s award policy aims to inspire its staff

and core R&D teams, to encourage a pursuit of excellence and

bold innovation, which would help to facilitate competitive

product development. In light of the division’s orientation to

team cohesiveness, entire teams will evenly split the Magic Wa-

ter Cube Project prize.

Since being launched into markets in 2004, the devel-

opment of the Magic Water Cube washing machine has focused

on resolving the common irritation of tangled clothing, for

which it has received a warm reception consumers. Since 2011,

a new generation of Magic Water Cube washers have been in-

troduced. For 2013, 22 separate models of the Magic Water

Cube series, including 8 newly introduced models, have been on

sale. As of this

past Septem-

ber, more than

450,000 Magic

Water Cube

washers had

been sold, with

revenue total-

ing 822 million

RMB.


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Midea Front-load Washer Receives Good

Design Excellence Award in South Korea By Blinda Li

I n the recent announcement of South Korea’s Good

Design awards list, Midea’s new roller washing machine stood

out in the shortlist of 83 products, in addition to winning the

“GD Excellence Award” for outstanding appearance and user-

friendly product experience.

Midea’s new roller washing machine is a strategic product

for the Laundry Division, and has received "Best Independent

Innovation Design Award" at the 2013 Innovation Festival, and

"2013 Annual Industrial Design Innovation Award" from the

Chinese Home Appliance Innovation Awards Show at IFA in

Berlin. The Good Design award from the renowned South Ko-

rean Institute of Design Promotion is the third honor taken

home by this model in 2013, indicating the recognition by indus-

try experts of the technical and design achievements made by

Midea’s Laundry Division.

Midea’s new roller washing machine is an image-making

product for Midea’s high-end roller lineup, targeting high-end

segment consumers aged between 20-45, who look for both

fashionable design and healthy living.

The industrial design of the washer follows the positioning

of Midea washing machines, with a rich and full overall shape,

large digital display, large-window door, and user-friendly user

interface, all combining to product a product which is equally

attractive and feature-rich.

In terms of performance features, the new model is

equipped with an iAdd automatic delivery system: the use of

converter technology allows the system to judge the amount of

detergent and fabric softener, while intelligently adjusting speed

and water levels according to the quantity of clothing, so as to

save water and power, while keeping machine noise to a rela-

tively quiet minimum.

The new washer uses colored steel plating, solving cost

pressures through the clever design, appearing stylish yet re-

maining durable, The upper and color tones have also brought a

new visual experience for the consumer, enhancing product

quality and market competitiveness.

The Good Design award was established by the South

Korean government in 1985, through the Korean Institute of

Design Promotion, to honor products launched or to be

launched, in domestic or foreign markets, with sound overall

design quality and competitive style and functions. In addition

to local brands, such as Korean firms Samsung and LG, Euro-

pean firms Siemens, Bosch, Philips, and Electrolux are also reg-

istered for consideration regarding this award.

NEWSLINE


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GMCC Taking Leadership Role in R290

Alternative Development By Crystal Lun

T he search for an environmentally-friendly refrigerant

substitution is heating up in the refrigeration industry. On Octo-

ber 30th, the International Workshop on HCFC-22 Alternatives

was held in Wuxi, Jiangsu, and sponsored by FECO (Foreign

Economic Cooperation Office of the Chinese Ministry of Envi-

ronmental Protection), UNEP (United Nations Environment

Programme), and CHEAA (China Household Electrical Appli-

ances Association).

This year is the deadline for the usage of the HCFC-22

refrigerant in the room air conditioning industry, and the focus

of this conference was on the topic of a viable replacement.

GMCC, representative for the compressor industry, presented

its own work on alternative refrigerants, and provided its sug-

gested direction for the industry.

GMCC is adopting the new refrigerant as an alternative,

while making efforts to improve product safety and perfor-

mance, and expanding the scope for application, serving as a

demonstration for the industry.

NEWSLINE

RAC Works with the United Nations for a

New Refrigerant By Crystal Lun

I n order to promote the development in the Middle

East air conditioning industry while reducing greenhouse gas

emissions effectively, business representatives from the United

Nations Industrial Development Organization (UNIDO), the

United Nations Environment Programme (UNEP), and a six-

country joint Middle East team visited Midea, accompanied by

the officials from the State Environmental Protection Depart-

ment’s International Cooperation Center.

HCFC usage is due to cease in Middle Eastern markets

soon, and it is important to decide on alternatives. Therefore,

visiting guests and experts from Midea together discussed the

situation and future development of new refrigerant technology

in the context of global household air conditioning.

In 2011, Midea acquired special funding from the United

Nations Multilateral Fund for the reform of R290, bearing the

responsibility for new refrigerant R&D and marketing. The visit

is one step in the scope of the project, with the purpose of pro-

moting development of new refrigerant technology through

Midea’s leading example.


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MDV ELITE CAMP (8th Seminar, Nov.) By Angie Cai

M idea CAC recently held its 8th Elite Camp in late

November, hosting distributors from around the world. The

seminar elaborated on CAC’s products and services, and offered

information of HVAC market trends, while encouraging and

enjoying highly interactive discussion between hosts and at-

tendees. The visiting distribu-

tors had three fully-scheduled

days in China: lectures and dis-

cussion for the first two days,

and a day of touring the city

before leaving.

The main focus rested on

new products such as the V4

Plus R-series (Three Pipe Heat

Recovery VRF), which boasts

numerous competitive ad-

vantages, such as simultaneous

cooling and heating, providing a

comfortable environment to users. It also enjoys greater energy

efficiency than traditional iterations. Compared with the tradi-

tional 2-pipe system, this the Three Pipe system uses up to 50%

less energy. Finally, the integrated central control provides per-

fect air conditioning solutions for large-scale buildings.

This year, Midea CAC’s submitted bid for the Brazil

World Cup Stadium Beira Rio in Porto Alegre was selected

ahead of fierce competition. The product secured for this mas-

sive project was none other than the Midea V4 Plus R-series

heat recovery system, which will

offer a pleasant air conditioned

environment for football fanatics

present for the game.

Since its establishment in 1999,

Midea CAC has always been de-

voted to technological innovation.

Last year, the division launched its

dual-stage Full Falling Film Cen-

trifugal Chiller, with a COP of up

to 7 under AHRI conditions and

up to 11.6 under IPLV. Several

key components in the FFFCC: a

dual-stage compressor, full failing film evaporator, aerodynamic

impeller, and a two-stage economizer, which all contribute to

system efficiency.

NEWSLINE

By Crystal Lun

Midea RAC’s Bid for University Project is

Successful

I n October, Huazhong Agricultural University, in Wu-

han, Hubei, selected Midea RAC’s bid to provide nearly ten

thousand sets of air conditioners. Up to now, Midea has sup-

plied up to 100,000 air conditioners to different colleges and

universities, including Wuhan University, Huazhong University

of Science and Technology, Hubei University of Technology,

Wuhan Institute of Bioengineering, Zhongnan University of

Economics and Law, South-Central University for Nationalities,

and China University of Geosciences.

Wuhan University and Huazhong University of Science

and Technology have considered bids for air conditioning for

many years now. In particular, Wuhan University purchased

nearly 20,000 units this year, the largest order from any universi-

ty in Hubei. This is the 8th year of cooperation with Midea, and

bid parameters rise yearly, presenting Midea the opportunity to

showcase its strength and influence in the field of refrigeration

and air conditioning.

At nearly the same time, in Hangzhou, Zhejiang, Midea’s

bid won a project at the Zhejiang University of Technology, to

supply over 10,000 air conditioners for Zhejiang University,

Hangzhou Normal University, Zhejiang University, and

Zhejiang University. In addition to these project wins, Midea

was rated the best supplier of air conditioning equipment for

Jinan University in Guangzhou just a few months ago, for the

3rd consecutive year.

The products supplied through these projects are used in

the basic facilities for the student dormitories to create a com-

fortable learning environment for students.


12

Midea Ranked 5th Most Valuable Chinese

Brand, Little Swan Also Listed in Top 100 By Blinda Li

T his past October, the rankings of the top 100 most

valuable Chinese brands were unveiled in Paris, France. Midea

was placed at 5th, with a value of 65.3 billion RMB (an increase

of 4.2 billion over last year). Midea’s Little Swan brand also

made the list, with a value of 19.3 billion RMB. In contrast to

the dim economic climate all over the world, the value of these

hundred brands has been increasing at an annual rate of 21%.

As the leader in the Chinese home appliance industry,

Midea Group has been developing steadily. Midea has been

building its corporate brand, strengthening itself through strate-

gic transformation, and focusing on innovation through product

R&D funded by significant reinvestment of profits. A strong

brand in its own

right, Little Swan

has been a well-

known develop-

er of washing

machines with

35 years of expe-

rience, with a

focus on quality

and customer

satisfaction. It

launched the

world's first in-

ternet-capable

washing ma-

chine, and the

world’s first heat

pump dryer.

In Septem-

ber 2013, Midea

completed its

corporate con-

solidation and

subsequent public listing. In future, Midea Group will strength-

en its efforts towards innovation, and actively promote structur-

al adjustment to build a more customer-oriented company, with

the goal of becoming not only a top brand in China, but a top

brand in the world.

Established in 1995, the Most Valuable Chinese Brand’s

research focuses on China-originated leading brands in the con-

sumer market. It has been China's earliest and longest-lasting

professional organization for brand value comparisons, which is

also carried out by the RREEF Global Ranking Information

Group and Beijing Famous-Brand Evaluation Co. Ltd. The

purpose of their research is to study the development of brand

values and to encourage Chinese companies to grow their own

brands. It has become an important reference for anyone in the

world to learn more about the progress of Chinese brands, both

inside China and abroad.

NEWSLINE


13

Midea CAC Kicks Off 19th Global

Technical Training By Amber Liu

M idea CAC division held the 19th of its twice-yearly

Global Technical Training this past month, here in Midea head-

quarters, where over 130 engineers traveled to from their home

countries.

As in previous sessions, the training was divided into two

parts: part one lasted two days, focusing on new products intro-

duced in 2013, and their main selling points over the competi-

tion. The most popular product for attendees was the V4 Plus R

series VRF, a DC inverter heat recovery model, which boasts a

maximum of 64hp when combined to its maximum, SCHE

(50/50 simultaneous cooling and heating efficiency) with a range

of 7+ (W/W), and several overall technical improvements.

Part two

lasted three

days, and fo-

cused on instal-

lation training

for VRF and

chiller models,

with equal parts

theory and

practical appli-

cation to im-

prove attendee

expertise with

installing the

newest CAC

products.

Aside

from training,

attendees were

given tours of the CAC showroom, Midea’s VRF factory and

the research labs, giving them a better familiarity about the prod-

uct manufacturing process, system leakage checks, 100% run-

ning tests for each VRF unit, and other product trial tests like

harsh environment simulation, long-term system runs, safety

tests, noise level tests and transportation tests. All of these help

to build attendees’ confidence and trust in China-made products.

The tour for guests also included Midea’s own CAC con-

figuration at the HQ building. The headquarters, with an area of

97,000m2 and height of 129m, first opened in 2010. Its climate

is handled by a water-cooled centrifugal chiller, a water-cooled

screw chiller, an air-cooled scroll chiller and a V4 Plus VRF,

which handles all four main sections of the entire HQ. Consid-

ering the scale of the building and the mixture of products

which power it, this part of the tour is usually a unique experi-

ence for visitors.

The Global Technical Training sessions provide a com-

mon platform for Midea’s distributors, technicians and engi-

neers worldwide to better understand Midea CAC products, and

serve to strengthen the relationships between Midea and all

participants. The next session is scheduled for April next year,

and CAC wel-

comes its distribu-

tors to join, wheth-

er they are new-

comers or previous

attendees.

NEWSLINE


14

Innovative and Surprising

By James Yu

I t is not common to open a newspaper or a magazine

and find a panda bear seating on the couch drinking a bamboo

sour or an elk enjoying the comfort of an air conditioning unit.

Surrealism and creativity raised with the arrival of Midea to

Chile.

“It is never easy to enter a market; thus, we immediately

understood that it was crucial to create a proposal that would

surprise the consumer, especially on a traditional category such

as home appliances”, remarked Benjamin Pena Isla, Mar-

keting and Business Manager of Midea Carrier Chile.

The strategic planning started with the execution

of several market researches with potential consumers,

to collect the most relevant brand building and position-

ing insights, test the response to the campaign, and un-

derstand the consumer’s behavior on this category.

Among other things, the research showed that the

enormous evolution that has been taking place on the

households and culture has not yet been reflected by

other home appliance brand, and that people want to

link this category in a fun way that could help them to

escape from the daily routine. Consequently, the need

for an advertising campaign that sought to break the

mold, oriented towards a unique well-being mood, using

visual codes that would generate major attraction in the

final consumer. Therefore, this requirement needed an

innovative creative boost, a challenge which was taken by Prox-

imity Chile, branding agency part of Omnicom Group, who

worked on a proposal that aimed at “breaking with the strong

tendency on this category to exclusively focus the communica-

tion on the daily activities or the woman’s role, using an stereo-

typed figure of life, many times typecasting the woman as the

owner and unique protagonist of the household chores”, says

Marcelo Con, the Agency’s General Creative Director. That is

why they chose to explore an alternative which went beyond

genders and stereotypes.

As a result of the above, it became clear that even though

home appliances are part of daily life routines and that currently

nobody expects much from a kettle, than to boil the water, or

from a dryer, besides drying the clothes, life deserves more. The

day-to-day activities need something incredible to create a better

life, and Midea Chile embraced the creativity to make it come

true. That’s how what needed to be done came up: to simply

surprise.

“Each ad is saying to the consumer that the really surpris-

ing objects are Midea home appliances that are arriving to Chile,

rather than the incredible characters that were created. The

campaign is receiving good feedback from consumers and also

from retailers, which have found it very innovative and attrac-

tive – shaking the current status quo on the market from the

typical home appliances advertisement”, comments Benjamin.

FEATURE


15

German Quality Meets Chinese Dynamism

By Mandy Wang

Rainer Kern

Senior Manager of Operations, MID

[email protected]

This month, we sit down with

Rainer Kern, Senior Manager of

Operations in the Midea International

Division (MID). With his international

working background, Rainer came here

to build up a new team for the

Operations Department in MID and to

expand Midea’s business into new

areas.

ADV: Hi, Rainer. Thank you for taking this time to have a few words with me. Why don’t you start by talking about your experiences previous to joining Midea? Rainer: I build up my experience in different companies and countries. As cars were always fascinating me even from being at young age, I started my career working in fleet sales for Daimler Benz. Later on I changed to a chemical company, which is producing different kinds of coating materials and decorative products. I also worked in different countries like the United Kingdom, Thailand, and of course in Germany [laughing]. ADV: There are other good companies in China. What attracted you to Midea? Rainer: At the time, I was searching for a job in China, and Midea gave me a very interesting offer to develop the Operations Department in MID. I was asked to build up a team and to expand Midea’s business into new areas. That happened to be exactly what I was looking for, so that’s how it all came together. ADV: What do you do for your position specifically? Rainer: I am in charge of supply chain management, global purchasing, quality management, after-sales management, IT, legal, compliance, and process management. However in the near future my focus will move more to cover strategic questions for MID.

ADV: How different do you see your management style compared to other managers in Midea? Does it make things more challenging, or do you think it creates an advantage for you? Rainer: There are a lot of differences I would say. I try to employ a mixed style, to respect the Chinese business culture and expectations, which are significant to my team and other colleagues. But I also incorporate some western elements of open-mindedness and team-orientation. Because of this, my team enjoys a more cooperative environment. I truly value all of the input from my team, and in fact, I force them to give input and ideas. I really like to hear their thoughts and ideas, because I believe that everyone has creativity. Those are the biggest differences. Of course it is always a challenge when you step into a different business environment especially also in a different country. You need to first understand the culture of the company; why and how normally things are handled. But after that, you need to develop your own way. That’s basically the key point. There is no question about the challenges being faced. But when you are open-minded, I do believe that you can find your own way. ADV: What other challenges do you have in your work here, and also your life here?

PEOPLE


16

By Mandy Wang

Rainer: The first thing is language, which I try to learn. That’s the biggest challenge. When you learn English or even Indonesian, for example, you can read it using the common alphabet. With Chinese, you have a wildly different character set; a picture-based language. It is not really a “sounding” language. It is really a truly different culture: how people work, how they think and how they act. For a foreigner starting in this company, it is a challenge because Midea started and grew up in China. It is a family-owned business. Most of my colleagues have vast experience working in Midea, having been here for 10 years, or even more. They have networks here already, so they can easily go to this or that department to ask this or that person for information or help. For a newcomer, especially one who cannot speak the main language here, it is quite challenging to communicate, to find the right people and build up such a network. ADV: Midea has recently been bringing in more foreign talent. Now that you’ve been here for more than a year, what kind of advice would you offer a new arrival from outside of China? Rainer: My advice is that when you build up a team, you keep a good mixture; include people from within Midea, but also leave room for new talent that will fit your remaining needs. On one hand, you want those with good experience from inside of Midea, and on the other hand, you also want people with new or different ideas. That’s my general advice. So mixture is a key part.

ADV: What impression did you have about Midea before you joined? How about a few months after you joined, and now, more than one year later? How do you see Midea’s growth in the white goods industry, right now and in the future? Rainer: When you walk in here, and you see the showroom for the first time, you just say “Wow. This is the LG or Samsung of China. This is totally amazing.” This was the first impression. When you start working here, of course you learn that in China, Midea is a very big and well-known company, and it is a very big driver in the white goods industry. But when you travel abroad, and you ask people about Midea, you realize Midea is still not known for its own brand. It is only well known by industry people as a big OEM player. If you do hear about Midea outside of China, it is simply that it’s a Chinese brand; it’s just not in the minds of the people. That’s definitely the shift from when I started working in this company and also changes some the first thought market approaches for MID resp. my own areas. Of course, Midea has great potential due to its very wide range of products. It covers nearly everything in the white goods market, with potential to sell everything from refrigerators to air conditioners to washing machines, and much more. Midea is unique compared to other Chinese companies as far as I can judge, in that we are much more orientated now in understanding the needs of foreign markets, and in developing specialized products for these foreign markets. This is the reason I say Midea has a very good potential to grow in markets beyond China.

PEOPLE



17

By Mandy Wang

Furthermore Midea is managing currently the transition from being a pure international OEM manufacturer, to a global ODM and OBM. This evolution is a very important growth path for Midea. If it continues to follow this way, it can be a very successful company in my own opinion. The potential is there. It is very interesting just to be here for this transition from OEM more to ODM and OBM. That’s the key aspect for Midea, and MID can drive it for the international markets. That’s a very fascinating aspect of my job here, that I can be

part of this new growth story. A D V : F o r projecting its brand outside of China, what steps do you think Midea should take, to develop its own b r a n d i n o v e r s e a s markets? Rainer: Chinese companies have developed a bad reputation from earlier efforts to go abroad, but it is very much different now, especially for Midea. Midea

has a long-term interest in growing in these countries. We are not just going there to acquire knowledge. We are looking for real cooperation in the form of our joint ventures, like those we have with Carrier. It really is cooperation based on mutual gain; both Carrier and Midea benefit. I think this has significantly changed the perception that foreigners used to have. On the other hand, Midea must also be open-minded about welcoming foreigners, to understand how to integrate them into the company: how to give them some areas to grow, how to bring them into the Midea system, and how to make it easier. Some people maybe come here for a shorter time, but if a foreigner comes, they probably expect to stay for the long term, with the ambition to grow with the company, while supporting the growth of the company. That requires Midea to form different structures to better integrate this new blood. We also need to first understand what markets are expecting from our products. That means you need to provide the right products, of the right quality, for the right price, and

also offering the right service packages. For example, we are creating a new after-sales service process, which will back up our brand promise, which my colleagues are working on currently. We are now building up a complete package and looking more into the market, to understand what the market demand is in order for us to promote Midea sales. ADV: What is the role of MID (Midea International Division) for expanding Midea and its brand overseas? Rainer: Our strategic intention for Midea is being the multi-brand production and sales channel for the overseas business. Our intention is to build up our knowledge and expertise for foreign markets. That’s our strategy and positioning for MID. I

also believe that we show and demonstrate our ability to develop and tap into new markets, and to grow existing markets. Of course, it is very hard and there is still a long way for us to go. But we have been building the foundations, implementing new management frameworks and business structures here since last year. MID is a very young division, so we still need time to grow, but we are already well on our way, and we never stop learning and being creative to find answers for future questions posed.

PEOPLE



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