Advances Newsletter, June, 2015 1 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‟
Advances Newsletter, June, 2015
1
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‟
Advances Newsletter, June, 2015
2
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
Advances Newsletter, June, 2015
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who has been replaced by Brazili-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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
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.
Advances Newsletter, June, 2015
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
Advances Newsletter, June, 2015
20
By Kevin McGeary
Precocious President of International HQ
(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.
Advances Newsletter, June, 2015
21
By Kevin McGeary
Precocious President of International HQ
(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
Advances Newsletter, June, 2015
22
By Kevin McGeary
Precocious President of International HQ
(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