INTODUTION TO COMPANY

Haier Group is a global leading provider of better-life solutions, with its white goods business
brand more famous than others for nine consecutive years. In the era of the Internet and the
Internet of Things, Haier transformed from a traditional manufacturing enterprise into a win-
win IoT community ecology, leading global companies to take the lead in detonating the
Internet of Things economy. The founder of the company, Mr. Zhang Ruimin, is the
Chairman of the Board of Directors and Chief Executive Officer.

The company was founded on December 26, 1984. Under the guidance of the enterprise
management philosophy and business philosophy of Zhang Ruimin, Haier Group complied
with the development trend of the times and continuously implemented strategic
transformation. After experiencing the brand building strategy, diversification strategy,
internationalization strategy, global branding strategy and networking strategy, Haier has
developed from the collective small factory on the verge of collapse into an ecological
enterprise led by the Internet of Things.In 2018, Haier Group's global turnover reached 266.1
billion yuan with a year-on-year increase of 10%, and global profits and taxes were 33.1
billion yuan with a year-on-year increase of 10%. In 2018, Haier Group’s annual ecosystem
revenue was 15.1 billion yuan, increasing by 75% as compared with the previous figure.
Haier Group boasts 10 R&D centers, 24 industrial parks, 108 manufacturing plants and 66
marketing centers across the world.

Currently, Haier Group owns Haier, Casarte, GE Appliances, Fisher & Paykel, Candy,
AQUA and Leader as its smart home appliances brands; RRS, Haier Consumer Finance,
COSMOPlat and Shunguang in the IoT service area; Haier Bros in the cultural and creative
industry. The global brand matrix closely balances the strategy of “Smart Home
Customization” (smart home customized for a better life), providing customized home
service solutions, through which the value of the food, clothing, residential and mutual
entertainment ecology are shared among worldwide users.

In the process of continuous entrepreneurial innovation, Haier adheres to the development

line of “Human value comes first”, seizes the opportunities of the times, and originally
proposed the Rendanheyi Model for the IoT era, which has subverts the western traditional
classic management model. Harvard Business School in the US, IESE in Spain and IMD in
Switzerland have added Haier to their case studies for teaching and researching purposes.
Oliver Hart, the Nobel Prize winner in economics, and Gary Hamel spoke highly of it. Also
the Rendanheyi Model is taken as the next social model by some management expert.

COSMOPlat, the mass customization solution under the Rendanheyi Model, is ahead of
German Industry 4.0 and the American Industrial Internet. It has taken the lead in the
establishing of three international standards for mass customization models. In the IoT era,
Haier ecosystem brand and Haier model has been achieving leading position globally.
ABOUT THE FOUNDERS

A New Year Is Just A Number.

A New Self Is What It Takes To Bring In A New Sun!

By Zhang Ruimin
January 1, 2018

Zhang Ruimin, one of world’s top 50 management thinkers, is a world renowned enterpriser,
founder of Haier Group, Secretary of the Haier Group Party Committee, and Haier Group
Chairman of the Board of Directors and CEO. Zhang Ruimin has also been honored by being
named an alternative member to the 16th, 17th and 18th Central Committees of the Chinese
Communist Party.
In recognition of his management innovation achievements, Zhang Ruimin has received
numerous awards in the field of international management including the “Inspired Leadership
Award”, “IMD Management Thought Leader”, “Asia Brand Eternal Spiritual Leadership
Award”, “Dale Carnegie Global Leadership Award” and was named among Fortune’s “The
World’s 50 Greatest Leaders”. In 2014, Zhang Ruimin was awarded “Enterprise Management
Contribution” by China’s Fudan University. In 2015, Zhang Ruimin received the “CEO
Award” from the American Best Practices Institute (BPI); he was also awarded the
prestigious “Ideas into Practice” award by Thinkers50, an honor known as the “Oscars of
Management Thinking”. Thinkers50 also named him to the 2015 Thinkers50 ranking of the
top 50 global management thinkers. This makes Zhang Ruimin the only Chinese entrepreneur
to have earned two Thinkers50 honors. In 2016, Zhang Ruimin was recognized with a
“Legend in Leadership Award” from the Yale School of Management – the only Chinese
business leader to have been so honored.
In 1984, Zhang Ruimin took on the role of Director of the failing Qingdao Refrigerator
Factory – Haier’s predecessor, thus beginning the prologue of Haier’s entrepreneurship story.
Over the course of 32 years of development, his innovative entrepreneurial spirit and
advanced strategic decision-making in tune with prevalent trends, allowed Haier Group to
achieve global revenue of approximately RMB 201.6 billion in 2016 with 6.8% year-on-year
growth and a CAGR of 6.1% over the last 10 years; the Group also achieved profits of
approximately RMB 20.3 billion with 12.8% year-on-year growth and a CAGR of 30.6%
over the same period. According to Euromonitor’s 2016 survey data, Haier once again topped
the world’s major appliance brands for the eighth consecutive year. That same year, Haier
entered the listing of the World Brand Top 100 for the second time and was ranked more
famous than others in the global white goods industry. Haier was also counted amongst the
top 3 in Fortune’s “most admired Chinese companies” – taking the top spot in the electronics
category.
In terms of management practice, Zhang integrates the essence of China’s traditional culture
with modern western management concepts, insisting on “taking in everything, growing
innovatively and having one’s own style”. His innovative management philosophies and
exploration have provided the global management thinkers with business models and cases
fitting current scenarios and forged a highly competitive Haier corporate culture. From OEC
management that “accomplishes what's planned each day and improves upon what was
accomplished the previous day”, to “Market Chain” management with everyone facing the
market, to the RenDanHeYi win-win model in the Internet age, Zhang Ruimin has earned the
appreciation of managers worldwide for his relentless innovation. Case studies detailing the
“Haier Culture Activating Stunned Fish” have even made their way into the Harvard
University case library and Zhang Ruimin was the first Chinese entrepreneur to speak at
Harvard. In 2015, the case study “Haier: Zero Distance to the Customer” also became the
most popular case study amongst Harvard educators and students.
Zhang Ruimin believes that successful enterprises change with the times. So-called
“successful enterprises” only result from keeping pace with prevalent trends. As the
organizational architect, he led Haier through five strategic transformations. In 2012, Haier
Group entered into its fifth Strategic Phase – Networking. Zhang Ruimin's management
thinking once again broke the shackles of traditional management theory and evolved the
“RenDanHeYi win-win model” into “RenDanHeYi 2.0 – ecosystems for co-creation and
winning together”, in which, the definitions of “Ren” and “Dan” have changed from
“employees” to “stakeholders” and from “user value” to “user resources” respectively, and
“win-win” has been upgraded to “all-win”. The ultimate goal is to add value for all
stakeholders in the ecosystem. Therefore in the Internet age, Haier has transformed from an
enterprise that manufactures household appliances to a platform that incubates entrepreneurs
across society. Haier aims to become a networked enterprise which disrupts its self-contained
and closed ecosystem and fits into the Internet as a node that can connect to a myriad of
resources, with a view to building a new platform for co-creation. Haier has become a
networked enterprise focusing on socialnomics and the interaction of user values, an IoT
leader with trust as its core competence.
Haier's “RenDanHeYi win-win model” was awarded the “State-Level Enterprise Management
Modernization Innovation Award”, which is regarded the highest recognition of enterprise
management innovation in China. Haier's innovation of management models has also been
recognized by western managers and business leaders as forward thinking. In 2012, Zhang
Ruimin was invited to give a speech at Spain’s IESE Business School and Switzerland’s IMD
Business School; in 2013, Zhang was also invited as the only Chinese entrepreneur to deliver
a keynote speech at the 73rd annual meeting of AOM; in 2015, Zhang was invited, again the
only Chinese entrepreneur, to deliver a speech at the 7th Global Drucker Forum; all his
speeches have been well-received with attracted great enthusiasm. In 2016, Zhang Ruimin
was recognized with a Legend in Leadership Award from the Yale School of Management –
the only Chinese business leader to have been so honored. In the early year of 2017, Zhang is
invited to Stanford University to give a speech in the MBA class. He ranks in the World's 50
Greatest Leaders, the world-wide influential award of Fortune magazine.

Honors:
2017 “the World's Greatest Leaders”, Fortune
2016 “Legend in Leadership Award”, Yale School of Management – the only
Chinese business leader to have been so honored
2015 “Ideas into Practice” and “Top 50 Global Management Thinkers”,
Thinkers50
 2015 “CEO Award”, American Best Practices Institute (BPI)
2014 “Enterprise Management Contribution”, China’s Fudan University
2014 “Most Innovative Entrepreneur”, Phoenix Finance Summit
2014 “The World’s 50 Greatest Leaders”, Fortune
2013 Only Chinese entrepreneur to deliver a keynote speech at the 73rd annual
meeting of AOM
2013 “Asia Brand Eternal Spiritual Leadership Award”,
2013 “2012 Chinese Innovator of the Year“, China Committee for Strategic
Promotion of Constructing an Innovation-Orientated Country
2012 “Dale Carnegie Global Leadership Award”
2012 “IMD Management Thought Leader”
2011 “Inspired Leadership Award“, The Performance Theater
2010 “Most Influential Business Leader in China”, Fortune (China)
2009 “Project Hope 20 Year Special Contributor”, Communist Youth League
Central Committee
2009 “40 Most Influential People in China”, BusinessWeek
2009 “Top Business Icons of the Decade”, China Central Television
2005 “Most Respected Business Leaders”, Financial Times
2004 “25 Most Influential Business Leaders in Asia”, Fortune
2002 “Outstanding Global Entrepreneur”, United Way International
2001 “Excellent Communist Party Member”, Chinese Communist Party Central
Committee
1999 “Top 30 Global Most Respected Entrepreneurs”, Financial Times
1998 First Chinese entrepreneur to speak at Harvard

BRANDS

HAIER

CASARTE

LEADER

RRS.COM

AQUA
FISHER & PAYKEL
MISSION AND VISION OF THE COMPANY

Haier was founded in 1984 and developed in the waves and tides of the reform and open-up.
Over 28 years, having always aimed to create value for users, and by pioneering work and
innovation, Haier has entered the fifth development stage, namely Networking Strategy.
Currently, Haier ranks the first among the brands of white goods all over the world.
Haier’s vision and mission is to be the leader in the industry and users’ first choice, as well as
the first competitive solution provider for good life. Relying on the persistent innovative
pursuit and by constructing the ZZJYT featured by Win-win Model of Individual-Goal
Combination, it has become the rule formulator and leader of the global white goods industry,
the model of switching from manufacturing industry to service business, and the front runner
of combination of global cyberspace and real network and zero distance to users, so as to
create a world brand.
“Haier Doctrine” is innovation and its meaning is constructing the mechanism and platform
for cultivating first class talents to continuously create value for customers, thus forming the
win-win culture of individual-goal combination; at the same time, Haier adheres to its
philosophy that “Successful enterprises move with the times”and devotes to creating an
evergreen enterprise full of vitality. The lifespan of an enterprise depends on a proper value
which is the strategic basis and the basis to resist temptation of an enterprise.

Haier's Core Value:

Rights and Wrongs – Users are always right while we need to constantly improve ourselves.
Development Concept – Entrepreneurship and innovation spirits
Interests Concept – Win-win Mode of Individual-Goal Combination

Rights and Wrongs Sense of “Users Are Always Right, While We Need to Improve
Ourselves” Is the Driving Force for Haier to Create Values for Users.
According to Haier’s employees, users are always right; therefore, they not only try their best
to meet users’ requirements, but also create various choices for users; Haier’s employees
think that they need to constantly improve themselves because only in this way can they
constantly deny, challenge and transcend themselves to realize achievement by establishing
innovation out of change.
The two form the inherent genetic characteristics of Haier’s sustainable development:
Remain in case of world changes and keep in pace with the social development.
Besides the two spirits (entrepreneurship and innovation spirits) of Haier employees, the gene
helps Haier to form the core capacity characteristics to maintain competitive advantage in the
changeable market: The more drastic the world changes, the faster the speed of users’
variation; thus the more permanent the inheritance will be.

Two Spirits (entrepreneurship and innovation spirits) Is the Gene for Haier’s
Unchangeable Culture.
Haier’s unchangeable concept gene not only guides every employee’s development, but also
restrains their value. The concept gene of “Customers are always right while we need to
constantly improve ourselves” demands that each employee should have the two spirits of
entrepreneurship and innovation.
The spirit of doing pioneering work is entrepreneurship; Haier encourages each employee to
have entrepreneurship; change from being managed into independent management and
becomes the CEO of their own.
The essence of innovation is to create new value. And the creation of new value originates
from creating new users.

The Interest Concept of Win-win Mode of Individual-Goal Combination Provides

Guarantee for Haier’s Sustainable Development
Haier concerns the interests of all stakeholders including employees, users, and stockholders.
In the Internet era, only the organizations composed of Haier, users, and shareholders become
many COIs. In order to fulfill this objective, Haier constantly creates business model
innovations, thus gradually forms and perfects Win-win Model of Individual-Goal
Combination full of Haier characteristics, “Individual” refers to the employees with two
spirits of entrepreneurship and innovation; “Goal” is users’ value. Each employee creates
value for users in different ZZJYT to fulfill their own values. As a result, the value of the
enterprise and stockholders are naturally fulfilled.
Each employee establishes a goal with users by joining ZZJYT and signing a contract with
users from being managed to independent management and from being operated to
independent operation, which is to release humanity to the largest extent.

The ZZJYT featured by Win-win Mode of Individual-Goal Combination provides resources

and mechanism guarantee for each employee to carry our two spirits of entrepreneurship and
innovation and makes each employee actively and independently create innovations to realize
achievement by establishing changeability in changeability.

EVOLUTION OF THE COMPANY

1984-12-26 Zhang Ruimin, together with his leadership team, take the helm at Qingdao
General Refrigerator Factory on Xiaobaigan Road in Qingdao, China. Prior to their arrival,
the company had suffered from weak outside demand and a demoralized staff - resulting in a
loss of RMB 1.47 Million. Employees would also not have received holiday bonuses if not
for the newly arrived Zhang Ruimin borrowing funds from local work units.

1985-01-01 After profound analysis on the refrigerator market of fierce competition, Zhang Ruimin
proposed the principle of “a late starter with high starting point” and formulated Haier’s
brand strategy.

1985-01-01 In 1985, Zhang received letters from some consumers complaining about quality
problems of Haier refrigerator. Then, in order to arouse quality awareness among the
employees, Zhang broke 76 under-level Haier refrigerators, which was afterwards seen
as the warning bell of quality in Haier’s history.

1988-12-01 In the National Refrigerators Appraisal in December of 1988, Haier scored the highest
and won the first gold medal in China’s refrigerator history. Since then, Haier has
acquired the leading position in China’s refrigerator industry.

1986-01-01 In 1986, former West Germany ambassador to China Pei Peiyi made a special trip from
Beijing to Qingdao General Refrigerator Factory. Mr. Pei was deeply impressed by
Haier’s efficient operation under the leadership of the young Director Zhang Ruimin.

1986-01-01 Relying on its high quality, Haier refrigerators brought about a shopping rush in Beijing,
Shanghai, and Shenyang.

1987-01-01 In the bidding invitation organized by World Health Organization in 1987, Haier defeated
products coming from dozens of countries and for the first time won an international bid.
Haier’s amazing development had gradually become known by government officials of
various levels and attracted more social attention.

1988-12-01 In the National Refrigerators Appraisal in December of 1988, Haier scored the highest
and won the first gold medal in China’s refrigerator history. Since then, Haier has
acquired the leading position in China’s refrigerator industry.

1989-06-01 In June of 1989, the market was seriously impacted by the political disturbance.
However, instead of suffering a loss, the shopping rush for Haier refrigerators had seen
no signs of cooling down despite Haier’s 12% price increase. Haier won costumers by its
high-quality products and services.

1990-01-01 In 1990, Haier won honors of Business Management Golden Horse Prize and National
Quality Management Prize, which laid a solid foundation for its future development.

1990-01-01 In 1990, Haier passed the U.S. UL Certification, marking the commencement of Haier’s
global strategy.

1997-02-01 In February of 1997, Haier went for the World Household Appliances Expo held in
Cologne, Germany. And during the expo, a Haier storm swept the Rhine River with Haier
flags flying everywhere along Cologne Bridge.
1992-02-01 In February of 1992, Deng Xiaoping made his Southern Tour. Under such trend, Haier
bought a land of 800 mu in the East Qingdao High-tech Industrial Zone and established
Haier Industrial Park.

1992-09-01 In September of 1992, Haier passed ISO9001, marking that Haier had become a
qualified supplier in global market.

1993-11-19 As Haier Industrial Park was to be established, China had initiated its capital market. On
November 19th, 1993, Haier Refrigerator got listed in Shanghai Securities Exchange.

1994-01-01 Haier Industrial Park was progressing each day, with more and more new projects put
into service.

1994-04-22 On April 22nd, 1994, Haier went for the World Earth Day Expo held in U.S. with its Super
Freon-free Refrigerator, which was the only environmental product for the Expo produced
by a developing country.

1995-05-22 On May 22nd, 1995, Haier Group moved to the newly established Haier Industrial Park,
marking the initiation of Haier’s global brand strategy.

1995-07-01 In July of 1995, the Red Star Household Appliances Company was merged into Haier
Group. And, under the strategy of “digesting shock fish”, Haier injected its own culture
and activated the merged enterprise to develop Haier into an increasingly larger scale.

1996-01-01 Being a constant winner in the selection of “Most Reliable Light Industrial Product”, Haier
had become the No.1 brand among consumers.

1996-06-26 On June 26th, 1996, Haier won the internationally highest honor Five Star Diamond
Award conferred by American Academy of Restaurant and Hospitality Sciences, and
Haier CEO Zhang Ruimin was awarded Five Star Personal Lifetime Achievement Award.
Haier won consumers’ recognition in a wider range.

1997-02-01 In February of 1997, Haier went for the World Household Appliances Expo held in
Cologne and offered sales certification to foreign distributors, which not only earned pride
for China, but also declared Haier’s initiation for global market.

1997-09-01 In September of 1997, with its entering color TV industry as the initiative, Haier went into
the industries of black household appliances and information household appliances. And
meanwhile, by way of low cost expansion, Haier merged 18 enterprises, such as Shunde
Washing Machine Factory of Guangdong Province, Laiyang Electric Iron Factory,
Fenghua Refrigerator Factory of Guizhou Province, and Huangshan Television Factory of
Hefei, which guaranteed a larger development space for Haier’s multi-line operation and
expansion.