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Advances Newsletter, June, 2015

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Vol. 5, #5, June 2015, No. 49

„Do Not Be a Spectator‟

Participants in RAC sports meeting heed CEO‟s advice to „take center stage‟


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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: +86-757-23270461

Web: www.midea.com/global

Managing Editor:

Kevin McGeary

Regular Correspondents:

John Baker

Lemon Lin

Mo Xuan

Zong Shujun

Hu Hailiang

Li Ying

Zhao Yingmei

Zhang Xin

NEWSLINE

Brand Appears on LED

Screen in Time Square, New

York PAGE 5

World Cup Winning Captain

Receives Smart Rice Cooker PAGE 3

Cooperation with American

Sink Giant PAGE 4

Global Facebook and Twitter

Pages Launched PAGE 5

www.midea.com

Precocious President of

International HQ PAGE 19-22

Big Picture

People

Idea

Idea of the Month: “What I

Wish I Knew When I Was 20” PAGE 18

Entire Product Range

Displayed in Africa PAGE 9

Chinese Air Conditioning in

Brazil PAGE 17

“Do Not Be a Spectator: The

World Needs You to Take

Centre Stage” PAGE 10

Guess What PAGE 16

Language

Rice Cooker Wins American

Design Excellence Award PAGE 8

Record-Breaking Day in E-

Commerce PAGE 8

The Backbone of the Water

Heater Factory PAGE 6

Marketing Staff ‟Take Centre

Stage‟ in Sports Meeting PAGE

7

Fame, Fame, Fatal Fame PAGE 11

Divisions and Departments

Mark Children‟s Day PAGE 12-

13

Two Product Categories

Launched in Indonesia Page

14

CAC Holds Multi-National

Elite Club Page 15

Microwave Receives Rave

Review on US Television Page

15


3

World Cup Winning Captain Receives

Smart Rice Cooker

W hen Fabio Cannava-

ro, who captained Italy to triumph

at the 2006 World Cup, stepped

down as Guangzhou Evergrande

coach on June 8, the images of his

farewell went viral. The coach,

who has been replaced by Brazili-

an Luis Felipe Scolari just six

months into his contract despite

being top of the league, was pre-

sented with a Midea IH Smart Rice

Cooker, a gesture which means he

can enjoy a taste of China wherev-

er he goes.

Eager to own the same prod-

uct as their idol, Chinese netizens

rushed to buy the product on Aliba-

ba‘s T-mall online store, causing

sales to increase dramatically within 24 hours.

Costing 2999 RMB (US$483), the IH rice cook-

er has been one of Midea‘s star products inter-

nationally since it was launched in Japan on

April 13. Smart rice cookers of this kind account

for over ten percent of rice cooker sales in Chi-

na and Midea expects to sell 100,000 this year.

The rice cooker‘s tripod pot interior chamber is

the best of its kind in the Chinese market, Ya-

hoo News claimed in April. It is the first Chi-

nese product to win the German IF Product

Design Award and German Red Dot Design

Award.

Midea Group boasts the world's largest rice

cooking taste research laboratory, with six re-

search and development centers around the

world and developers accounting for 10 percent

of the division‘s staff.

NEWSLINE

By Mo Xuan

The departing hero receives the gift from colleagues

Holding aloft the World Cup, one of the many highlights of Cannavaro’s glittering playing career


4

Cooperation with American Sink

Giant By Zong Shujun

M idea signed a cooperation deal with Elkay, Amer-

ica‘s number-one selling stainless steel sink manufacturer at

the Aquatech China exhibition in Shanghai on June 10. The

family business, which was founded in 1920 and employs

3,500 people worldwide, will benefit from the cooperation in

the lucrative Chinese market.

Water pollution and the need for safe drinking water is

one of China‘s most pressing societal issues. Midea is at the

forefront of China‘s drive to provide clean water to its citi-

zens, according to Xu Minfeng, general manager of the

group‘s Water Heating Division. Ted Hamilton, Elkay vice

president and general manager of emerging markets expressed

excitement about the deal: ―Whether it is in the pooling of

resources or consumer research, our company will benefit

hugely from this cooperation,‖ said Hamilton.

In April this year China published the Water Pollution

Control Action Plan, the most important document yet to

explain the seriousness of the nation‘s water safety situation.

This has left much room for businesses to compete to offer

the safest and most affordable solutions to the Chinese con-

sumer.

According to a study published by China Market Moni-

tor, the size of the Chinese water purifier market was estimat-

ed to be about 9.5 billion RMB (US$1.5 billion) in 2014. The

study indicates that the market will grow by 80 percent this

year. Since entering the water purification industry in 2004,

Midea has become one of the nation‘s leading providers.

A report from consultancy firm AVC shows that do-

mestic

brands like

Midea ac-

counted for

over 80

percent of

the market

last year,

making it a

valuable

cooperation

partner for

the American company. Midea will also benefit from the deal,

which will help it continue to revolutionize consumers‘ rela-

tionship with their appliances.

About Elkay

The Elkay Manufacturing Company began as a vision of

Leopold Katz and his son Louis on the North side of Chicago

95 years ago. Founded with the goals of manufacturing the

highest quality sinks and providing the best service possible, the

company began to thrive. As time went by, it set the pace with

new products, designs and innovations that continue to lead the

industry.

To meet the demands of a changing marketplace, over the

years it has expanded from its base business to include the man-

ufacture of faucets, water coolers, drinking fountains and bottle

fillers. It then added a cabinetry division and became a more

complete supplier of kitchen and bath products for both resi-

dential and commercial installations.

About Aquatech

Aquatech is the world's leading trade exhibition for pro-

cess, drinking and waste water. This year‘s Aquatech China was

held in The National Convention and Exhibition Centre in

Shanghai on June 10-12.

Aquatech China was launched in 2008. The first edition

welcomed 291 exhibitors and over 14,000 visitors.

NowAquatech China features 1,400 exhibitors, and this year

welcomed over 45,000 attendees from around the world.

NEWSLINE

Ted Hamilton and Xu Minfeng

Midea’s stand at the exhibition


5

Brand Appears on LED Screen in Time

Square, New York By Zong Shujun

M idea‘s brand name has appeared on a LED screen

at what has become known as the ―crossroads of the world‖,

New York‘s

Time Square.

The advertise-

ment was made

possible by

Midea‘s coop-

eration with

American clean

water giant

Elkay, which

was signed in

Shanghai on

June 10 (See

page 4).

Major brands it

appeared along-

side include

Budweiser, Toshiba, Sony and Dunkin‘ Donuts. An ad at the

square can cost up to US$2.5 million for four weeks.

Midea‘s award-winning water purification technology

boasts filtration accuracy of about 0.0001 microns, can intercept

a variety of inorganic ions in water, and filters out colloidal and

macromolecular solute substances, including heavy metals and

scale.

NEWSLINE

By Kevin McGeary

Global Facebook and Twitter Pages

Launched

M idea this month launched what will become unified,

global, English-language Twitter and Facebook pages for the

group. The pages will contain news from around the world

about Midea, its joint-ventures and its subsidiary brands.

Benefits of having a Facebook page include gaining expo-

sure to its more than 1 billion active users; the low cost of mar-

keting; the potential to develop brand loyalty and the increase of

traffic to a company‘s

website. Benefits to a

company of using Twit-

ter include keeping up

with industry trends;

monitoring brand repu-

tation and connecting

directly with potential

employees.

Currently, several

product divisions and

overseas joint ventures

have Facebook and Twitter pages. Some are highly successful.

However, the new global Facebook and Twitter pages will bring

it all together and be exclusively in English to help the Midea

brand push on globally.

The URLS are:

https://www.facebook.com/mideainternational

and

https://twitter.com/midea_global


6

The Backbone of the Water Heater Factory

By Hu Hailiang

This profile was published on MIP, an internal website.

K nown for his kind expression and muscular

shoulders,

Cao Xianlin

is a popular

and reassur-

ing figure at

Midea‘s

water heater

factory in

Wuhu, An-

hui Prov-

ince. His

status mes-

sage on

QQ, rough-

ly the Chi-

nese equiva-

lent of Fa-

cebook, is

indicative

of his atti-

tude over

the years he

has been at

Midea: ―努

力做事，

只能把事情

做完。用心

做事，才能

将事情做好”。 “It is not enough to give your time to a

job. You also have to give your heart to it.‖

At the factory, which he joined in 2005, Cao has been

responsible for overseeing pressing, cleaning, welding, sand-

ing, and enamel, keeping up with the rapid changes in the

industry along the way. Most importantly, he evangelizes his

belief that mere hard work is not enough to bring success.

As China‘s labor market becomes more flexible and

fewer people are willing to do factory work, Cao also takes it

upon himself to motivate workers and make sure the overall

attitude in the workplace remains at a high standard. He also

delegates

responsi-

bility, for

example

on days

when

produc-

tion

stops, it

must be

arranged

for some

workers

to shop

for

enamel

powder

and oth-

ers to

clear up

the waste

in the

furnace.

He also

tries to

keep over-

time to a

minimum,

knowing

that workers need to have lives outside of work and need to

show up to work revitalized with rest. He sees to it that the

factory is inspected every day to maintain high standards of

safety, efficiency, quality, and on-site management.

Under Cao‘s leadership, the factory operates with a spirit

of friendly competitiveness between teams to keep meeting

demand. His experience and determination has proven conta-

gious.

NEWSLINE

Cao Xianlin, water heater factory squad leader


7

Marketing Staff „Take Centre Stage‟ in Sports

Meeting

T his month, in one of his most important speeches of

the year, Midea Group President Paul Fang urged workers to

take centre stage and not be a spectator. Staff from the Midea

Residential Air Conditioning (RAC) overseas marketing and

domestic marketing teams did just that in a sports meeting held

on June 13th.

The indoor events took place in Nansha gymnasium and

every person was required to take part to get into the spirit of

working for a team against competition. The outdoor event was

a ‗color run‘, that is a run in which participants have colored

substances thrown at them, similar to the slime used on chil-

dren‘s television.

Newsline

By Li Ying

Warming up

A race based on interdependence

Tug-of-war

Workers posing after the colour run

Triumphant in victory


8

Record-Breaking Day in E-Commerce

By Advances

M idea had its best ever June 18, a date which in Chi-

na is synonymous with

e-commerce. In one

day, Midea saw domes-

tic e-commerce of

US $57.36 million on

three major Chinese

platforms, a year-on-

year increase of 117

percent.

On Alibaba‘s

Taobao service, Midea

made sales of US$18.5

million, a year-on-year

increase of 75 percent.

On its rival site Jingdong, Midea made sales of US$31.9 million,

a year-on-year increase of 127 percent. On Suning, sales were at

US$ 6.9 million, a year-on-year increase of 283 percent. Midea

ranked first in sales of eight product categories and second in

twelve others.

In the past year, Midea has signed or renewed partnerships

with giants such as Jingdong,

Alibaba, Suning and Xiaomi. Close

cooperation with these companies,

with their deep pools of resources

and years of experience, made

Midea‘s record-breaking June 18

possible.

Midea is the official sponsor of

China‘s national swimming and

diving teams, many of whose

members are Olympic champions.

Ahead of June 18, a short movie

was made with the team members

titled ―Facing Challenges Like a

Champion‖ to promote the Midea brand and the company‘s

ability to meet the considerable demands of June 18. It never

hurts to be associated with winners.

NEWSLINE

By Zhao Yingmei

Rice Cooker Wins American Design

Excellence Award

T he Industrial Designers Society of America has grant-

ed the Industrial Design Excellence Award (IDEA) to a Midea

rice cooker. The Anxiang

YunNan Steam Pot beat

12,000 competitors to win

the bronze award.

This is the second

major international award

the rice cooker has won,

after it attained the G-

Mark in Japan. Midea‘s

Small Appliances Division has now won all five major interna-

tional industrial design awards, which also include Germany‘s iF

and Red Dot awards and South Korea‘s GD award.

Founded in 1979, IDEA is a premier international design

competition, recognizing and promoting excellence across a

wide array of industries and

disciplines, including com-

mercial products, entertain-

ment, home goods, social

impact designs and student

designs. Gold Silver and

Bronze winners are recog-

nized. Winning entries re-

ceive worldwide press and

are housed in a permanent collection at the Henry Ford Muse-

um in Michigan, USA.

Facing challenges like a champion


9

Entire Product Range Displayed in Africa

By Kevin McGeary

T he entire

range of Midea-branded

products was on display

at the Tunisia Dealer

Convention on June 12,

courtesy of leading local

distributor Electrostar.

Over 200 dealers set up

stands and over 20 local

media outlets were pre-

sent.

This was the first

time Midea‘s entire prod-

uct range has been exhibited in Africa. Highlights included the

Mission residen-

tial air condition-

er and the KISS

range of kitchen

products. The

former impressed

with its interop-

erable ―smart‖

technology and

the latter drew

positive remarks

for its integrated

design. The group‘s Small

Appliances Division and

Water Heating Division

had products on display

in the African country for

the first time.

Residential Air Condi-

tioning in particular has

seen rapid growth in Af-

rica and there is still

much potential for

growth. In recent years, a

relatively stable political

environment and sustained economic growth has seen Midea

thrive in several African countries, including Tunisia. As well as

being a valuable display of strength, Midea‘s appearance at the

event is a statement of intent for the brand in Africa.

NEWSLINE

Journalists and purchasers at the convention Midea products being introduced by local distributor

The hall where products were laid out The powerpoint introduction


10

“Do Not Be a Spectator; the World Needs

You to Take Center Stage” By Advances

― Do not be a spectator; the world needs you to take

center stage,‖ Midea Group CEO Paul Fang told a training ses-

sion for all employees on June 2. This sentence captured the

image that this company is trying to cultivate. The main theme

of his speech was ―creating a brand for the mobile internet age.‖

Here are some highlights:

A company for our times

As we enter the age of the Internet of Things, the consum-

er is now king. It is an age of deconstruction, reconstruction and

great change. It is not necessarily the biggest or the smartest

companies that will survive, but the ones that fit the new envi-

ronment.

To become a great company, Midea and its employees

must be daring and courageous, creating new and valuable

things. A company for this age needs to be fearless, innovative,

and open. The core of our company needs to be the end user,

and our entire business should be based on their needs and de-

sires.

Stages of development

Midea‘s past approach of large scale and low costs is fast

becoming a failed business model. We are adopting a new model

and competing in different areas. This transition has reached a

critical stage.

Midea is already in the second stage of its ―three-three‖

strategy. That is to go in the space of three years from one of

China‘s top appliances brands to a global industry leader. To get

to the next stage we need to deepen our restructuring and be-

come an industry leader with global operations.

The need to reinvent ourselves

We need to comprehensively remodel our organizations,

systems, teams and culture to reinvent ourselves as a global

brand. In our case, changing our management and team struc-

tures is even more important than changing our technology.

Individuals need to be free to use their own skills and

bring their own ideas. Teams must not be constrained by the

need to conform as this will only lead to mediocrity.

Challenge yourself, get onto the stage.

The people who thrive in these times will be the ones

willing to take center stage. It may be necessary to change your-

self, open up, and dare to innovate. Only by challenging your-

self can you discover what you are capable of.

In every era of great change, industrial companies are re-

quired to restructure and upgrade. Great companies are born

out of these challenges. Some of the mighty will fall and up-

starts will emerge. Over the next ten years, we are willing to

stand or fall when meeting the obstacles that come our way.

Newsline

Paul Fang giving the speech

The audience of employees


11

Fame, Fame, Fatal Fame

By Kevin McGeary

O ne only has to look at a reality television star or

internet celebrity to appreciate that fame, in and of itself, has no

value. However, for a growing brand it is gratifying to see the

name appear in the media, however unrelated it is to the good

work that the company is doing.

Here are

some inadvertent

media appearances

that Midea has

made in recent

weeks.

Residential

Air Conditioner

Saves Bear’s Life

Flooding in

Tblisi, Georgia ena-

bled animals to es-

cape from a zoo on June 14. Escaped animals included a rhino,

20 wolves, eight lions, eight tigers and eight bears. Those

drowned inside the zoo included a lion and 14 penguins.

One bear, to prevent itself from drowning, climbed the

side of a residential building. To survive, it climbed on top of an

air conditioner, where it was found by rescuers.

Mentioned in the New York Times

In ―China‘s Troubling Robot Revolution‖, a report in The

New York Times published June 10th, Midea‘s approach to auto-

mated technology is mentioned. The comment was neither fa-

vorable nor unfavorable, but it shows awareness of the company

is growing.

Martin Ford wrote:

―Midea, a leading manufac-

turer of home appliances in

the heavily industrialized

province of Guangdong,

plans to replace 6,000 work-

ers in its residential air-

conditioning division, about a fifth of the work force, with auto-

mation by the end of the year.‖

Midea plans to spend US$800 million on automated tech-

nology for its factories in the next five years. Ford casts a sym-

pathetic glance at what this will do for the domestic economy.

The Irish Times comments on China’s Second Gen-

eration Wealthy

China‘s Fuerdai （富二代） or ―second generation rich‖

occasionally make headlines with their lavish lifestyles or osten-

tatious displays of wealth. The report in The Irish Times pub-

lished June 2 titled ―Dog with two Apple Watches sparks out-

rage in China‖ talked about the outlandish gifts bestowed on

the husky dog belonging to Wang Sicong, son of China‘s richest

man, the property mogul Wang Jianlin.

The article goes on to comment on succession plans for

wealthy entrepreneurs, stating that not all of China‘s wealthy

people spoil their

children or make

success easy for

them. The citation

reads: ―One exam-

ple of a successful

transition often cit-

ed came in 2012,

when He Xiangjian,

founder of the home-

appliance giant Midea, passed over the reins to Fang Hongbo,

chairman and president of the enterprise‘s listed arm, rather

than to his son, He Jianfeng, who had a nonexecutive board

seat.

―Since the handover, Midea has expanded strongly, in-

cluding major growth in its e-commerce business.‖

Newsline

This picture appeared in the UK Daily Mail among other places

Husky Wang Keke, via The Irish Times


12

Divisions and Departments Mark Children‟s

Day By Kevin McGeary

Newsline

M idea‘s departments and product divisions all held

their own activities to mark International Children‘s Day which

fell on Monday June 1. Activities included the handing out of

gifts, the attendance of performances, games and visits to the

zoo.

International Children‘s Day was established in 1950 and

China, a country known for its family values and affection for

children, is particularly serious about observing it. The day is all

about spending time with children, the most important gift a

child can have.

Gifts at the Commercial Air Conditioning factory in Hefei,

Forty families from the Small Domestic Appliances Division were invited to hold fun activities at a McDonald’s

There were games, activities and gifts for all the children

A treasure hunt at a factory in Anhui


13

Divisions and Departments Mark Children‟s

Day (Cont.) By Kevin McGeary

Language

Over 100 families from the Refrigeration Research & Development Institute were invited to a theme park

Though some people were slightly overwhelmed

Staff at the Water Heater production base in Wuhu received gifts for their children

A female worker receives the gift from her boss

The same was done for staff at the headquarters in Shunde


14

Two Product Categories Launched in

Indonesia By Advances

Newsline

M idea launched two new product categories in

Indonesia on June 16, the digital fan & digital water heat-

er. The event helped introduce the new products to the

market and raise the Midea brand profile among Indone-

sian consumers.

The event was held in the ballroom of the Akmani

Hotel in Jakarta and was attended by 60 journalists from

54 media including Bisnis Indonesia, Media Indonesia,

Koran Sindo, Kontan, Housing Estate, other property

magazines as well as online news outlets.

President of Midea Electronics Indonesia Mr. Jino

Sugianto began by giving an introduction to the company

and updates on its progress. The digital fan and water

heater were introduced by the relevant product managers

Mr. Dennis Jiang and Mr. Teguh Sutrisnah respectively. It

was the first time a Midea-branded fan had been formally

launched in Indonesia.

Midea Electronics Indonesia is responsible for intro-

ducing the Midea brand in the Southeast Asian country. It

has already successfully launched a number of small

household products and will eventually establish sales

channels for the entire product range.

Political and economic progress in Indonesia is currently

stable. Relations between China and Indonesia are also

strong. The spending power of consumers and their

demand for quality appliances is increasing. Under Jino

Sugianto‘s leadership, Midea will strive to become a fa-

mous brand in Indonesia, known for its entire product

range.

The ballroom at the Akmani Hotel


15

CAC Holds Multi-National Elite Club

By Zhang Xin

T he three-day MDV Elite Club was held from June 16-

18 by Midea Commercial Air Conditioning (CAC) in Shunde,

with representatives from The Philippines, Kazakhstan, Malta

and Myanmar attending. The first two days were devoted to

product training and market seminars, while the third was a re-

search tour of factories, laboratories and warehouses.

Founded in 2010, the elite club helps overseas dealers and

engineers familiarize themselves with the brand and products;

ensures that principles of design are uniform; and builds a sense

of camara-

derie. This

year‘s

camp em-

phasised

the quali-

ties of the

V5X and

V4Plus

series,

products

under the

MDV

brand, particularly their energy conservation, ease of installation

and flexible control.

A lot was also said about MDV‘s history since its founda-

tion in 1999 and how it can continue to grow in the global heat-

ing, ventilation and air conditioning (HVAC) market. However,

it was not all work. There was also a sightseeing tour of Guang-

zhou so that attendees could get to know the people who would

help them develop the international brand.

NEWSLINE

Via Fox 7

Microwave Receives Rave Review on US

Television

A Midea microwave was one of the highlights at the

Freescale Technology Forum in Austin, Texas this week, causing

it to be featured on US television. This is a highly encouraging

piece of publicity from a country where Midea is still in the early

stages of building brand awareness.

Noelle Newton of Fox 7 began her report by introducing

the product. ―This red microwave cooks multiple foods at the

same time at targeted temperatures,‖ said Newton.

John Dixon, Freescale Marketing Director further ex-

plained the benefits of the product: "It's for people to have

meat, potatoes, carrots in the same dish without you having a

steak that is cold and a mashed potato that is going to burn your

face off," said John Dixon, Freescale Marketing Director.

The forum is an annual event which was this year held at

the JW Marriot in Downtown Austin. International brands use

it to display their newest, hottest technology. Other innovations

on show this week included the Myo armband, which can con-

trol any electronic item in your home if you move your hand,

and Arrow Electronics, which can help you drive a car without

touching the steering wheel.

You can read the report and see the video on the Fox

website here: http://www.myfoxaustin.com/story/29392059/

freescale-hosts-technology-forum

Outside the global headquarters on day one

A product installation exercise


16

Guess What

By John Baker

Language

This is the second in a series about language learning. The author

graduated from Cambridge University with a Master's degree in Engi-

neering and spent several years working in financial services in London

before moving to China.

He is currently based at the Midea Group headquarters where he

works in the strategy & human resources team.

I n last month‘s article, I wrote about the perils of us-

ing a dictionary when learning a foreign language. So if we are

avoiding the use of dictionaries, how do we learn new words?

To answer that question, we have to look at how we learned

our first language.

When I ask people to think about how they learned their

first language, I‘m constantly sur-

prised by the number of people who

say they didn‘t learn it. I‘ve never

heard of a new-born baby that could

already speak a language. Others tell

me that they learned their first lan-

guage at school, but again this is miss-

ing the point – we‘re not talking here

about reading or writing, but listening

and speaking.

Most people grasp the overall

structure of their first language‘s

grammar by age four or five. We

don‘t even have to think about the

grammar of our own language.

None of this requires a diction-

ary or grammar book. We didn‘t write

any words down or even actively try to

remember any.

The only reasonable explanation is that we learned by

listening. We listened to our relatives talking, we listened to the

radio, we watched television. And that was it. If you have diffi-

culty believing that it was through listening that you learned to

speak your first language, pause to think for a minute, and see

if you can come up with another explanation.

Of course, as small children, on occasion we do ask our

parents about the meaning of a word, but we certainly didn‘t

ask them the meaning of every word we know. Parents usually

find that, before their child can speak, he or she can already

understand what they say – or at least a few words.

How is this possible? Babies can spend all their waking

hours observing the world around them. They can slowly deci-

pher the meaning of their parents‘ words. A small child may

have heard a parent ask where their car keys were. Once they‘d

found the key, they made an association between the small

metal object and the word.

Even if you accept the above points, you might by now

be thinking that your current life situation is so different from

that of a small child that the way a small child learns a language

is not relevant. It‘s true, of course, that as adults we have re-

sponsibilities such as work and family that we didn‘t have as

small children. However, this can still inform

our approach.

As adults, many people find language-learning

a chore. To children it is never boring. Could

it be that the reason for this difference is the

different ways we go about learning a lan-

guage?

As I mentioned last month, I went from find-

ing language learning tiresome to finding it a

joy. The change came about when I started

to learn in a more natural way. If you find

that learning a language is giving you a head-

ache, the good news is that, if you examine

the way that you are approaching language-

learning, you may well find that it is very dif-

ferent from the way you learned your first

language. Using a dictionary, keeping note-

books of vocabulary, repeating words to try to

remember them – these are the common habits

of adults trying to learn a language – but they are not a natural

way of learning a language.

The way, as children, we learned a language, is far superi-

or. Not just because it is a more natural way and therefore not

at all tiresome, but also because the results it produces are

much better. After all, I‘ve met many people who speak their

second language quite badly, but we all speak our first lan-

guage well.

A world-class linguist


17

Economic News

Chinese Air Conditioning in Brazil

This article was first published in Economic News on

May 21.

C hinese Premier Li Keqiang arrived in Brazil

on May 18 on the first leg of his four-country tour of

Latin America. Acting as a ―super salesman,‖ the pur-

pose of Li‘s visit was to boost cooperation between

China and the region.

Air conditioning has been one of the core prod-

ucts to help Chinese business gain a foothold in the

South American nation. Joint venture Midea-Carrier

boasts a 35 percent market share in air conditioning in

Brazil and pulls in over US$1 billion every year.

Liang Zhengpeng, an expert in the home appli-

ances industry, told reporters that Chinese brands have

an advantage in the developing countries of Latin

America and Southeast Asia where consumers are

particularly conscious about price.

In terms of air conditioning, Brazil is a mar-

ket that still has plenty of room for growth. China

is the world‘s largest manufacturer of air condi-

tioning and small domestic appliances, and Brazil

is proving a particularly fruitful market. For these

reasons, Midea-Carrier‘s market share is likely to

continue to grow.

Midea sells under two brands in Brazil, its own and Com-

fee. As well as air conditioning, the company‘s brands are also

in the top three in microwave-ovens. Chinese appliances brands

are also thriving in Argentina, Chile and other Latin American

countries. Midea has joint ventures in those two countries.

Despite its potential and lucrativeness, there are all kinds of

challenges facing companies that are trying to grow their brand

in Latin America. These include turbulent political situations,

red tape, the problems of red tape localization, and economic

uncertainty. The winners will be those who ride out those is-

sues.

Big Picture

Chinese Premier Li Keqiang


18

IDEA

Idea of the Month: “What I Wish I Knew

When I Was 20” By Advances

I f you could go back in time and talk to your 20 year-

old self, what advice would you give? Here are some examples

of what life advice professionals had to say to this question.

Samantha Matt: Author and editor-in-chief of magazine

Forever Twenty Somethings

You're not losing friends. You're finding out who the

real ones are.

As I progressed from my early 20s to my mid 20s, I

started to notice I was losing touch with a significant amount of

people. To me, it seemed like I didn't have as many friends as I

did before and that upset me. However, I soon realized I was

actually growing closer to a smaller amount of people which

was in fact better than having "50 close friends." In fact, having

"50 close friends" is basically

impossible.

Royale Scuderi: Creative

strategist, consultant and writer who

specializes in cultivating human

potential for happiness, health and

fulfillment.

Money is not the most

important thing.

Money is important. We all have bills to pay, I understand

that completely. But in the end, or even in the middle, maybe

especially in the middle, money is not the end goal. Satisfaction

in a job well done, contributing to something worthwhile and

finding something you enjoy doing (or figuring out how to

enjoy what you do) are more motivating goals and certainly lend

themselves to a happier and less stressful life.

Contrary to what you have been sold by the ―lifestyles of

the wealthy and happy‖ fallacy, money does not equate to

happiness. Nor does it insulate you from pain, suffering and

conflict or improve your relationships with those around you.

Money is simply a currency that allows you to eat, dress and

live. It is not a magic wand.

Don’t be afraid to stand up and stand out.

Take a stand. Speak up. Stand out from the crowd. If

something is important to you, then stand up for it…even if it

is unpopular. Never compromise your integrity. One person

can make a difference and shed light on injustice or unfairness.

If it‘s not right, say so.

Be quirky, be different, be yourself. Don‘t worry so much

about conforming to society‘s standards or whatever passes for

the norm. While I do think it reasonable to be clean, respectful

and considerate, I think we place too much emphasis on fitting

in and being ―appropriate.‖ This is not your grandmother‘s

world. Don‘t be afraid to be yourself. http://

www.lifehack.org/articles/lifestyle/10-

wise-lessons-what-i-wish-i-knew-when-i-

was-younger.html

Dr. Tina Seelig: Professor of the

Practice in the Dept of Management

Science and Engineering (MS&E) at

Stanford University.

Opportunities Are Everywhere

―First, opportunites are abundant. At any place and time

you can look around and identify problems that need

solving....regardless of the size of the problem, there are usually

creative ways to use the resources already at your disposal.‖

―Attitude is perhaps the biggest determinant of what we

can accomplish.‖

Jordan Fried: Entrepreneur and blogger

Learn to love mistakes

Always remember to learn from your mistakes—and

keep growing. Don‘t doubt yourself so much. One day you‘ll

be able look back on your ―oops‖ moments and laugh at them.

They are inevitable.

Find time to be alone.

Being alone can be wonderful. Make time for you to

hang out with you. Be your own best friend—take yourself out

to lunch, take yourself out to a movie, go on a trip alone. I

know, the thought of being alone can be overwhelming and

scary. But you‘ll learn a lot about yourself by just hanging out

with you.


19

By Kevin McGeary

Precocious President of International HQ

Coobie Zhang President of Midea International Headquarters

Coobie Zhang has been with Midea since 2003 and

has risen rapidly through the ranks to the position of pres-

ident of the group‘s International Headquarters. After

graduating from Simon Fraser University in Canada,

Coobie joined Midea as a sales representative.

He has had a variety of roles such as key account

manager and

regional

sales manag-

er for Resi-

dential Air

Condition-

ing in terri-

tories as

diverse as

Latin Ameri-

ca, Europe

and Africa.

In 2012 he

became

president of

Midea Inter-

national Di-

vision. He

has achieved all this before turning 40. On June 25, he

took the time to talk to Advances and several other inter-

nal media about the current situation of the company.

Q: Group President Paul Fang this month gave a

speech about remodeling our organization for the mobile

internet age. How do you feel about his ideas?

A: We are certainly entering a new era. People‘s lifestyles

have changed radically in many parts of the world. The mobile

internet is a tool of improved efficiency that has removed a lot

of barriers to communication, and increased the speed of com-

munication while lowering the cost. We have to think as a com-

pany about how we can use this to bring new value to the con-

sumer.

Our business model has not fundamentally changed since

the pre-internet age. The company has always been about bring-

ing cutting-edge products and satisfactory services to the con-

sumer. However, many of our methods are undergoing major

shifts.

Midea started life as a single-product company. The inter-

action ended when the customer bought the product. The inter-

net age has created

the potential for a

new relationship

between product

and consumer.

Many boundaries

have been blurred.

It takes more than

just a good product

to provide the con-

sumer with a satis-

factory experience.

When it comes to

home appliances,

they of course have

to be functional

and usable. Now

there are many

more considera-

tions, such as con-

venience, malleability, and design. At the development, design

and production stages, a manufacturer must always be thinking

of the end user. We may need to think bigger and bigger, in-

cluding considering the entire supply chain. Who should we

cooperate with and how? How should we identify ourselves? If

we think too conservatively then we are likely to get left in the

dust.

We need to identify what new opportunities have arisen.

People


20

By Kevin McGeary


(Cont.)

ing hardware with software that is ideal for the consumer. Ama-

zon, for example, started life as an online market, but it has

morphed into a brand with its name appearing on children‘s

clothes, batteries, and many other products. It made this possi-

ble by mastering the entire supply chain. It integrated channel,

merchandise and brand.

For example, not only can you buy a washing machine

from Amazon at the push of a button, they can deliver it

promptly as well as access your data and know what else you

might want by comparing you to other customers, putting them

in pole position to satisfy your needs.

The American and Japanese companies are already leading

the way with the Internet of Things. In the future, all of our

products will be interoperable and suitable for a smart home,

but this approach is still in its early stages. Having said this, Chi-

na has phenomenal potential. If we invest well and think smart,

we can still overtake our competitors because we are not actual-

ly that far behind.

Q: Does the Internet of Things already have a large

presence in people’s homes?

A: Very much so, our sales team in America is dealing

with this. It is already the case that people are controlling their

windows, curtains and other traditionally non-electric items with

their phones. Recently, when Paul Fang stayed in a hotel in

Hong Kong, he could control just about any item in the room

without getting out of bed – this is what the Internet of Things

is already doing for us. In the future, cars will become smarter

and a lot of traditional manufacturing will be taken over by au-

tomated technology. These trends are irreversible.

In the IOT age, as I said communication costs have been

significantly reduced, physical distance is no longer a barrier of

communication, acquaintance is not as important as before.

Today I can reach any colleagues anytime anywhere, and tomor-

row I will be able to do so with end consumers from different

part of the world, or maybe even planets.

As for changes in the relationship between seller and buy-

er, there two implications for us: One is on product develop-

ment. With IOT we are awarded with significant extension of

opportunities, which could last the whole lifetime of the prod-

uct, to engage with the users through built-in product, which

People

Good things will happen to those who think and act quickly and

ambitiously.

To make the most of the internet age, companies need to

keep on top of what changes are going on in the industry and in

the world. We cannot afford to restrict ourselves within our

own little industry.

Simply put, right now our competitive advantage is our

product range and the value it brings to customers. However,

our

model

is out-

dated

in the

inter-

net age.

It may

no

longer

be

about

what a

single

product

brings to

the consumer but a whole collection of products. We cannot

build our brand simply on individual items, we need to use our

product range to create an ecosystem. We need to transcend our

industry and our traditional specialties, thinking about software

as well as hardware.

Take Xiaomi for example: their flagship product is cellular

phones, through which they can collect consumer data and use

it to satisfy customer wants. This has already helped them move

beyond the status of a single-product company. Of course,

products are still the heart of a company, but to avoid being

marginalized we need to think beyond mere hardware.

Q: Are overseas appliances manufacturers still ahead

of us?

A: I think the United States and Japan are at the forefront

of the industry because they are the best at utilizing internet

technology. In China, we still have not found the way of marry-

Xiaomi, a company that has moved beyond mere products.


21

By Kevin McGeary


(Cont.)

Internet of Things is a natural progression. Though China is a

huge market, the cost of smart technology is more expensive

compared to median income; so many people simply cannot

afford it.

The market will mature and it has huge potential. Compa-

nies will be falling over each other to find ways of taking ad-

vantage of this. In places like America and Japan by contrast, a

large percentage of the population can already afford smart

home hardware and are interested in buying it. Therefore, those

smart home markets will grow faster than China in the short

term.

* This is a quote from Deng Xiaoping, the leader who oversaw

China’s reform and opening up in the post-Mao era.

Q: How does a market like the United States differ

from other markets such as Latin America and the Middle

East?

A: The US is a very mature market. Markets are highly

consolidated. Consumers are more sophisticated. This is differ-

ent from emerging ones where consumers are more open to

new brands and more price conscious rather than brand sensi-

tive. Channels are not highly consolidated, meaning there are

more opportunities for start-ups.

There is more flexibility in emerging markets. The entry

barrier for a new brand is lower. Not everybody can comply

with US standards. In emerging markets, the regulations are not

as strict, which means more opportunities for newcomers.

In a mature market, your product strategies need to be

fully developed and your products need to meet the highest

standards. In an emerging market, products need to be cost

competitive to attract the mainstream consumer.

Q: Does your experience as a regional sales manager

inform your current job?

A: Yes, of course. My earlier jobs provided me with a lot

of insight into the local consumers. You need to study the local

culture and what the local consumer needs and how our existing

line-up could be useful. This has paved the foundation for

Midea‘s brand strategy.

My experiences gave me significant exposure to diversified

People

can be leveraged to enhance consumer experience beyond a

product itself, an integration of experience of both product

utility and communication.

A superior product is the one which understands consum-

ers better, the communication between a product and a con-

sumer will become a new trend. The end-game winner would be

the one who can effectively integrate the hardware and software

experience in an unmatched user friendly way. It is a tremen-

dous opportunity for everyone as well as a threat.

The second is related to organizational transformation.

Internet technology will reshape drastically traditional distribu-

tion networks and corporate business models, a lot of organiza-

tion functions can be consolidated across space, any in-house

function or processes which lack efficiency compared with ex-

ternal ones will be replaced eventually. The whole competitive

landscape will be completely reshaped, we will have to redesign

the whole end-to-end value chain to achieve overall optimiza-

tion. Excellence in one segment may not be transferrable to

another. Openness and collaboration will be the key to winning

this game.

Q: You say we are not that far behind our competi-

tors, in terms of our future direction, will our Internet of

Things strategy be mostly influenced by industry stand-

ards or something even broader?

A: Mobile platforms such as Android and ISO could hold

the key to the future progress of the Internet of Things. If an

individual company is unable to come up with its own integrat-

ed system, then the smart home could become dependent on

open source technology. Standards will become more conver-

gent and the number of resources that can be integrated on an

open platform will increase.

Q: Is there a massive difference between Chinese

companies and overseas companies in terms of resources

and methods?

A: The development of the Internet of Things is a trend

dependent on two things: technological progress and improve-

ments in people‘s lifestyle. In developed countries, internet

technology has been present in people‘s homes for years so the


22

By Kevin McGeary


(Cont.)

term OBM strategy and divisions‘ approach to investment re-

flected this. The biggest achievement is that we have more per-

ception on this OBM strategy, which has a much greater return

on investment.

Q: Our globalization drive could not be possible

without the large number of employees working hard for

the Midea family. Do you have anything special to say to

these people?

A: In the Chinese market we can still see much room for

growth, but we are currently facing a huge challenge. Our

knowledge of how to set up systems that befit a global company

is still in a pre-

liminary stage.

We need to be

creative, inno-

vative, fearless,

and find the

right road for

us.

There are plen-

ty of dragons

to slay along

the way. Some-

times we will

feel like perish-

ing. We are in

the pioneering

age of Chinese

companies

trying to estab-

lish themselves

abroad. There is

nobody to tell us

exactly what to

do. We can only teach ourselves.

It won‘t be for the faint hearted, but the next ten years will

make or break us. There is no textbook on what we have to do,

so all I can say is: Go team!

People

cultures and lifestyles around the world. Being versatile and

flexible and thinking from other points-of-view are key to de-

veloping relationships, I believe trust is the foundation of busi-

ness. This mindset is core to doing international business. The

fundamental principle applies to both B2B and B2C,

"understand your customer/consumer's need and create more

value for them than our competition.

Q: In twelve years you have risen very fast to a high

level in a very large company, do you often look to older

colleagues for guidance?

A: Unfortunately no, we are a young operation staffed by

young people,

most of who were

born in the 1970s

or 80s. We are

learning by doing

as we don‘t have a

great deal of inter-

national experi-

ence.

We do

benchmark studies

of other Chinese

companies and try

to learn from their

globalization pro-

cesses. Alibaba,

Huawei, Lenovo

all have experienc-

es we can learn

from.

Q: What do

you think are some

of the biggest

achievements of 2015 so far?

A: We have achieved internal alignment in our OBM strat-

egy. In the last three years, MID has been a driving force. How-

ever, product divisions were not fully aligned with our long-

Talking to Lemon Lin of Midea’s International WeChat platform


23

SNAPSHOT

Brand Name on LED Screen Brand Name on LED Screen Brand Name on LED Screen

in New York’s Time Squarein New York’s Time Squarein New York’s Time Square

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