Haier is probably the biggest appliance brand that U.S. consumers don’t know. And Adrian Micu is out to change that.
For years the business operated in North America as a volume-driven trading company led here by Michael Jemal and his lieutenant and successor Shariff Kan.
Fueled by China’s Haier Group, arguably the world’s largest majap manufacturer by volume, the partners put millions of room air conditioners, compact refrigerators and other generic white goods into homes, apartments and dorm rooms through discount chains, home improvement stores and OEM deals, while the badge stayed largely below the radar.
Despite establishing a manufacturing base in South Carolina, efforts to build the brand through sports licensing, an expanded CE assortment, and independent-channel entreaties generally dead-ended due to quality, design and delivery issues, and Haier Group bided its time until the trading agreement expired.
Enter Micu, a veteran Whirlpool engineer who joined that company as a refrigeration engineering general manager in 1999 and left 25 years later as global engineering VP. Just months after taking an early retirement he returned to the fold as president/ CEO of a new Haier America.
His orders from China were broad: expand market share; leverage the parent company’s manufacturing prowess and expansive portfolio; and, most of all, make money.
But if the mandate was simple, getting there was not. After assessing the U.S. operation, Micu essentially started from scratch, hiring new staffers, changing or expanding the roles of current ones, implementing new management systems, drawing up a new go-to-market game plan, and even moving company headquarters, from the basement of a former Midtown Manhattan bank to the suburbs of New Jersey.
Now, 18 months into his new role, and with the first fruits of the reborn business coming to market, Micu sat down with TWICE to share his vision for the new Haier America.
TWICE: What attracted you to the job?
I thought Haier had a lot of potential in the U.S. It was still largely unknown here, although it is a completely different picture globally. In China Haier is a premier company with high brand recognition, and it’s known worldwide for its visionary leadership.
TWICE: So it’s the first day on the job, where do you begin?
It’s not cut-and-paste; we had to create a local-market approach. The first thing was to create a comprehensive strategic view, a 100-day plan for how to look at customers, the brand, product, supply channels, and the aftermarket.
Once that was in place and approved, we moved pretty quickly, attracting significant talent, assigning new roles to previous folks, and changing how we challenged, assessed and rewarded people. We rewrote the DNA and created a new organization.
TWICE: That was inside. And outside?
We developed a new go-to-market strategy that offers total solutions rather than just products, based on the stages of life. For students we have a platform called Haier University featuring compact refrigerators and other dorm-room appliances. After they graduate and move to an apartment, we have a small Urban Kitchen platform that will show them how to live in a small space without compromising aesthetics. Both will officially launch next month at Dwell on Design New York, along with a new, transactional website.
There are other platforms to come: When they move into a house there’ll be a Digital Living platform of TVs and other electronics devices for the den, and an air quality platform of humidifiers and air purifiers in addition to room air. We will tap into Haier Group as a full-solution provider.
And at some point their own kids will move into a dorm, and they will become empty nesters and return to the apartment.
We want to create an intimate relationship with the consumer that carries through the various stages of life. We think of them as the center of our ecosystem, and we want them to think of Haier as a one-stop-shop for their needs.
So we’re creating a new identity, that of a human brand vs. a technology brand, and realigned our products and portfolio, and will launch 87 new products this year.
TWICE: You mentioned TVs. What role will video play in your plans, compared to appliances?
We had a lot of introductions at CES and expanded our TV offering significantly, including 4K TV and a Roku TV line. And we’ll be getting into soundbars later this year.
Our business in TVs has grown double-digit every year in the U.S. but it’s still very small. We do absolutely want grow in TV, and we do see an opportunity for us, but we want measured growth. TV is a very tough business; many secondary and even first-tier companies have exited, and we don’t need to grow in a way will cause us to lose money and follow them.
TWICE: What lies ahead for the industry over the next several years?
We will see some dynamics over the next one to two years that are unprecedented. We don’t know how long Sears will continue; the GE-Electrolux merger may or may not go through; big-box retail is changing; and at the next CES I expect there will be all kinds of meaningful examples of inter-connected devices that address real needs and provide cohesive solutions.
Everyone [vendors] will have smart appliances next year. They will grow slowly at first, but once you can tailor them to specific needs, and not just show gimmicky, Internet-connected appliances that are great for booth displays, then you will see exponential growth, like apps on a smartphone.
Ten years from now I’d be surprised if most homes aren’t smart homes.
TWICE: And what lies ahead for Haier?
Right now we’re less than 2 percent of the American market, $500 million including TV, a small part of it. We’re not here to displace GE, take their builder channel or bump Frigidaire or Whirlpool. We haven’t set stiff goals, like tripling or quadrupling sales over time.
But we’re creating new operational systems to bring all the parts together, and just about everybody who has been exposed to our strategy has been very excited. If we do it right and focus on the consumer, particularly millennials, we think a few years down the road the approach will be very powerful.