Midea Has Been Making a Splash

Advances Newsletter, July, 2015

Vol. 5, #6, July 2015, No. 50

Midea Has Been Making a Splash...

... with FINA, Fiji’s Prime Minister, the Fortune 500, and Forbes Magazine

1 Advanceswww.midea.com Newsletter, July, 2015

ADVANCES Newsletter

Contents

NEWSLINE There Is Such a Thing as a Language Fortune 500 Places Midea Free Lunch PAGE 11 above the Competition Don’t Shoot the Interpreter PAGE 3 Malaysia Press Conference PAGE 21 and Dealer Meeting Page 12 Big Picture Splash of the Titans PAGE 4 Divisions and Departments The Rise and Rise of Spanish Mark Children’s Day PAGE 12- PAGE 22 Midea America ’Doubles in 13 Size’ PAGE 5 Japanese Expert Looks to Idea Forbes Asian Businessman of Rugby for Wisdom Page 14 Idea of the Month: the Year Comes to HQ PAGE 6 International HQ ’Reaches for Politeness PAGE 23 Fiji Prime Minister Visits R & D the Top’ Page 15-17 Center PAGE 7 People Water Wars PAGE 8 Appliances Fair Held in Philippines Page 18 Perfect Chemistry PAGE 24 Becoming a ‘12-Month Brand’ in India PAGE 9 Belarus Factory Makes Its First Water Heaters Page 19 MIBC Top Korean Trainer Comes to Our Very Own Silicon Valley Midea College Page 10 Page 20 The Coming Together of Countries PAGE 25-26 RAC and Xiaomi Team up for Group Headquarters Gets Its i-Youth Seminar Page 20 Own ‘Airport Terminal’ PAGE 10

Midea Advances Newsletter is published monthly Managing Editor: by Midea International Business. We welcome all comments, suggestions and contributions of Kevin McGeary

articles, as well as requests for subscription to our Regular Correspondents: newsletter. You can reach us by email at: [email protected] John Baker Berta Lorente Liu Lu Address: Wang Wei ADVANCES, International Strategy Department Chen Minshan Midea HQ Mo Xuan No. 6 Midea Road Wei Xin Zhang Xuefei Beijiao, Shunde, Foshan, Guangdong P.R.C. 528311

Tel: +86-757-23271418

Web: www.midea.com/global

2 Advances Newsletter, July, 2015

NEWSLINE

Fortune 500 Places Midea above the

By Kevin McGeary Competition

T he Fortune list of China‘s 500 biggest companies has placed Midea in 32nd place, up three places from last year and higher than any other appliances manufacturer. Gree was in 34th place, TCL in 55th and Haier in 66th on the list that was published at the beginning of July. This is the latest major international media to publish encouraging news about Midea Group‘s break- neck growth. The group has come from benig worth US$1 million in 1990 to US$23 billion last year. The top three remained unchanged. Sinopec was in first place, with revenue of US$ 451 billion. Petro- China was in second place and China State Construc- tion Engineering was in third. Industrial and Commercial Bank of China (ICBC) was highest in terms of profit with US$44.4 billion, even higher than Apple, America‘s most profitable company. The total revenue of the 500 companies amounts to about US$4.9 trillion, a 5% increase compared to last year. The companies account for nearly half of China‘s GDP. Midea Group leapfrogged its competitors into 32nd place. Fortune's report said companies in the Internet industry are rising at the fastest pace. The revenue growth rate of listed online enterprises is on average nearly 40 percent, higher than the average 5 percent growth of all listed companies. Among the 53 new entrants on the list this year, commercial property developer Da- lian Wanda Group Holdings Ltd was ranked 51. Alibaba Group, also making its first appearance on the list, was 81st, 26 places behind its competitor JD.com. China International Capital Corporation Ltd, which assisted Fortune in compiling the list, said the rankings proved that de- spite a slowdown in economic growth, emerging industries such as Internet- related service providers and the pharma- This is a positive addition to entering the Forbes 500 in May ceutical sector are expanding quickly.

3 Advances Newsletter, July, 2015

NEWSLINE

Splash of the Titans

By Advances

M idea is set to make a splash in the world‗s largest country and it began doing so with the help of the one organization that knows how. FINA, the world water sports governing body, joined Midea at a press conference in Moscow on July 16 in which the brand was formally launched in Russia. On the eve of the 16th FINA Championship Games in the historical Russian city of Kazan, Alexey Obukhov, General Manager of Midea Russia, outlined his plans for at the luxurious Lotte Hotel in central Moscow. Other speakers included Midea HQ‘s Manager of PR and Digital Marketing, Matthew Smith, FINA‘s Executive Director, Cornel Marculescu, and the multiple Olympic medal-winning Russian diver, Gleb Galperin. The theme of the event was chosen to highlight the pow- partnership, which began in 2011, and was renewed last year. erful nature of each of the parties involved: Midea, as one of the Mr. Marculescu was followed by Gleb Galperin, a Russian med- world‘s largest producers of home appliances, and their global alist in diving from the 2008 Beijing Olympics, who described partner, FINA, as the world‘s one and only organizing authority his experience as an athlete and the great progress that FINA for aquatic sports, both coming together in a country with a has made in promoting this sport across the world. hugely fertile market. Alexey Obukhov, then made a presentation illustrating Before the beginning of the press conference, reporters Midea‘s operational footprint in the world and the wide-ranging from over 30 news organizations and a handful of VIP dealers global product portfolio, before describing Midea‘s local initial mingled, with many taking notice of the large ―presswall‖ out- post-launch product offering. During the question and answer side of the venue entrance, depicting a muscular swimmer period, there were queries from the media about Midea‘s future breaching the surface of the water, looking like a Greek God plans in Russia, which were described by Mr. Obukhov as small and spanning the shape of Russia‘s geographic border. to start with plans to expand into additional product categories, The first of the speakers, Matthew Smith, Midea HQ‘s PR shown to the media during his presentation. and Digital Marketing Manager, gave an introduction to the By the end of the press conference, everyone from Midea, company, describing its status as a major household name in FINA, and the news media gathered together in front of the China and its recent but rapid growth in other major markets presswall for a final group photo, before a lunch outside the such as Brazil, India, and the United States. venue where everyone mingled about with renewed conversa- Speaking next, Cornel Marculescu, the Executive Director tion about the event. of FINA, mentioned About FINA about Founded in 1908, FINA or Fédération Internationale de FINA‘s Natation (trans: International Swimming Federation) is the In- relation- ternational Federation (IF) recognized by the International ship with Olympic Committee (IOC) for administering international com- Midea, petition in Aquatics. It is one of several IFs which administer a describing given sport/discipline for the IOC and/or international com- the natural munity. It is based in Lausanne, Switzerland. fit for the

4 Advances Newsletter, July, 2015

NEWSLINE

Midea America ‘Doubles in Size’

Via NJBiz

M idea America & Canada Corporation (MACC) negotiated a new office lease in Parsippany, New Jersey, USA with international corporate real estate advisory firm Cresa on July 8. Midea will occupy a space of just under two square kilometres at Five Sylvan Way, double the size of its previous office. Five Sylvan Way is one of 15 class A office properties located at Mack-Cali Business Campus. Considered one of New Jersey‘s top corporate addresses, Mack-Cali Business Campus offers an award-winning office environment situated on a beautiful 600-acre site in Morris County—home to nu- Five Sylvan Way merous Fortune 500 companies. Tenants take advantage of a host of campus amenities includ- as potential new landlords. The value that Cresa was able to ing hotels, restau- bring to the transaction was that we mitigated the financial im- rants, banking, pacts of doubling in size, while still working to give our client and a child care the logistical benefits of their expansion.‖ center, as well as Earlier this year, Midea opened a research and develop- nearby shopping, ment centre in Louisville, Kentucky, which also serves as a restaurants, and statement of intent for the company‘s plans in the United business services. States. Edward English, vice president, About Cresa along with Founded in 1993, Cresa is an international commercial Thomas Gian- real estate firm headquartered in Boston, Massachusetts. Cresa none and Ronald represents tenants and provides real estate services, including Ganter, manag- corporate services; strategic planning; transaction management; ing principals, project management; facilities management; workforce and lo- represented cation planning; portfolio/lease administration; capital markets; Midea in the supply chain management; sustainability; and sublease and dis- transaction. The tribution. Staff at MACC demonstrate the power Landlord, Mack- of a Midea fan in a recent photo competition Cali, was represented in-house by Diane Chayes, senior vice president of leasing, and Brian De- cillis, assistant vice president of leasing. ―Midea is doubling in size,‖ English said in a prepared statement. ―Because we work exclusively as tenant representatives with no conflicts of interest, we were able to work equal- ly as aggressively with their current landlord‘s portfolio as well Parsippany, New Jersey

5 Advances Newsletter, July, 2015

NEWSLINE

Forbes Asian Businessman of the Year

By Liu Lu Comes to HQ

L ei Jun, founder and President of Xiaomi and Forbes Asian Businessman of the Year 2014, came to Shunde on July 28 to share with Midea his experiences of phenomenal success. Group President Paul Fang and Chief Financial Of- ficer Monica Yuan attend- ed the event. Things he talked about included Xia- omi becoming the first Chi- Lei has been described by Reuters as “China’s Steve Jobs’ and nese company he dresses in a similar way. to raise the manufacturing should be consumer desire. The function room was packed ing of patch with Midea employees eager to hear some of his wisdom. boards to the level of an art About Lei Jun form; manu- Born in 1969 in Hubei, China, Lei gained a bachelor‘s facturing degree in Computer Science at Wuhan University in 1991. He power banks was Pres- as powerful as ident and Receiving rice cooker from Midea President those of Tesla CEO of Paul Fang and selling 15 Kingsoft million units in before one year; plus making air purifiers that can use Internet of resigning Things technology to change their cores every six months. in 2007. He stressed that the starting point of all corporate think- He owns 77.8% of Xiaomi, a $45 billion company that A Xiaomi power bank has a partnership with Midea. In July this year, Forbes ranked Lei Jun number 87 on their list of global billionaires. His wealth is esti- mated to be well over US$10 billion.

A Xiaomi air purifier

6 Advances Newsletter, July, 2015

Newsline Fiji Prime Minister Visits R & D Center

By Advances

F ijian Prime Minister Josaia Voreqe (Frank) Bain- imarama visited the research and development center of Midea‘s Refrigeration Division during an official visit on July 21. The visit to Foshan was the final phase of a China tour that earlier took in Beijing and Fujian Province and involved high level talks with President Xi Jinping and Premier Li Keqiang. Along with Midea Group Vice President Dr. Andy Gu , Foshan Deputy Mayor Mai Jiehua and Liang Zicai of the Shunde District Standing Committee acted as guides to the leader of the Pacific of which are made in large quantities in Foshan. Island nation. About Frank Bainimarama As well Born in 1954, Frank Bainarama is a former naval officer as who has been Fiji‘s Prime Minister since 2007. He was the Midea‘s Commander of the Fijian Military Forces from 1999 to 2014. innova- tive refriger- Receiving an introduction to Midea Refrigeration ation Division’s Patented Technology technology, topics discussed included Midea‘s progress in Oceania and the company‘s future in Fiji, one of the strongest economies in the region. Last year, US$7 million in trade was done between Fo- shan and Fiji, according to state media, year-on-year growth of 2.3 percent. This is likely to increase Bainarama caused a stir on social media when he wore his national attire to meet President Xi as there is much de- While serving as Prime Minister, he has temporarily held vari- mand in Fiji ous ministerial portfolios: Information, Home Affairs, Immi- for plastic gration, Public Service, Indigenous and Multi-Ethnic Affairs, goods, Finance, and Foreign Affairs. home appli- On 22 September 2014, he was sworn-in again as the ances and Prime Minister of Fiji by the President, Ratu Epeli Nailatikau furniture, all after his Fiji First Party won the general elections. With Premier Li Keqiang

7 Advances Newsletter, July, 2015

NEWSLINE

Water Wars

By Advances

M idea Water Heater Division held a swimming competition at the Jiangshan Wutian swimming pool in Shun- de on July 24. The twelve teams held games such as a tug-of- war and ―fruit wars‖ in which they raced to gather balls into a basin. Of course the most important thing was the photo opportunities.

Fruit wars

The winning team

8 Advances Newsletter, July, 2015

NEWSLINE

Becoming a ‘12-Month Brand’ in India

By Advances

C arrier-Midea India will expand its portfolio of home appliances under the Midea brand to establish it as a ‗12 -month brand‘ in the world‘s second most populous country. Midea entered the country in 2012 with air conditioning products. Residential air conditioners and light commercial air conditioners still account for most of its business in India. Last year it launched microwave ovens and water dispensers. ―AC sales are seasonal and largely active between Janu- ary and June. During the remaining part of the year, the brand channel, market size of the product and future potential while selecting the products. Currently, the distribution channel that we have for ACs largely supports large appliances and consumer durables,‖ he added. An entire range of products will also increase the visibility of the brand within retail stores for 12 months of the year. Currently, Carrier Midea‘s products are available across 3,500 retail outlets in India. Of late, Carrier Midea has been focussing more on retail distribution. ―Seven to eight years back retail contribution was just 40 per cent and now it has moved up to 68 per cent, Apart from retail, the company also has been eyeing institutional sales by providing ACs and home appliances to developers for large residential projects. The slow pace in the construction business has affected institutional The top brass of both companies hold a press conference business. The company will be spending US$7.1 million on market- is not too visible. We want Midea to be a 12-month brand. So ing the Midea brand, which will include both above-the-line and we are introducing an entire range of home appliances, choos- below-the-line activities. ing the products relevant for the Indian market from the global portfolio. It will consist of large appliances, kitchen appliances and a few niche products not currently available in India,‖ said Sanjay Mahajan, vice president of sales and marketing. The company will be launching six products ahead of September. Home appliances will be positioned in the mid-segment in terms of pric- In India Midea sponsors Royal Challengers Bangalore, one of the world’s most glamorous cricket teams ing. ―We will look at the distribution

9 Advances Newsletter, July, 2015

NEWSLINE Top Korean Trainer Comes to Midea College

By Wang Wei

to have suc- r. Paul Jeong, president at Global Consulting and D ceeded in his Coaching came to Midea College on July 10-11 to offer manage- three goals of ment workshops for executives. Holding a doctorate in coaching increased research at Regent University, Jeong is one of the top people in faith between the world at what he does, with over twenty years‘ experience teammates; and memberships of the International Coach Federation and the creating an International Coaches Association. open and Particularly expert in Asian-American relations and the respectful atmosphere; leaving people desiring to grow and Asian market learn more. system overall, He also encouraged participants to evangelize his teach- Dr. Jeong spent ings about leadership not just to colleagues and underlings but the sessions to family and friends. The training involved mingling, pair and emphasizing self group work. -discovery and Global Coaching Company is the largest coaching compa- group coordina- ny in Korea, a major player in the training industry. The Global tion skills. At Coaching Company has top class coaching staff and its more the end of the than 30 administration staff provide world class coaching ser- two-day session, vices. Paul has written more than 12 books in leadership and he was adjudged coaching.

Group Headquarters Gets Its Own ‘Airport Terminal’ By Chen Minshan

zone door 5 M idea Group‘s global headquarters got its own and B zone ―airport terminal‖ on July 1, from which shuttle buses will run door 5. It is to Guangzhou Baiyun Airport every 30 minutes from 5 a.m. to 8 free to take p.m. The Shunde City Terminal Beijiao New Town Station is the bus from located in D zone of the group headquarters and all Midea em- the Midea ployees can use it to purchase domestic or international plane headquarters tickets, check in and take to the airport the shuttle bus. and costs 46 The Volvo shuttle bus The bus takes passengers Yuan (US$7.40) from The Shunde City to come the other way. Terminal Beijiao New You can receive your boarding pass at the terminal before Town Station to Guang- taking the bus. Free parking is also provided beside the head- zhou Baiyun Airport A quarter complex.

10 Advances Newsletter, July, 2015

NEWSLINE

There Is Such a Thing as a Free Lunch

By Mo Xuan

M idea Small Appliances Division sponsored phil- anthropic activities by outstanding high school students in the impoverished mountain region of Xinfeng County, Shaoguan in South China‘s Guangdong Province on July 10. The volunteers, students who excelled in the Gaokao, China‘s much- feared college entrance examination, held educational activities with local children and cooked a ―free lunch‖. The event began at 10:30 a.m. in a classroom on the second floor of Weixin Primary School where the students in Foshan. In a brief speech, he told the students: ―Improve yourself by seeing and understanding as much of the world as possible.‖ After IH rice cookers were presented to the volunteers and new sports achievement was presented to the school, the principal of Weixin Primary school said: ―Thank you Midea for supporting our school. This year our new sports ground has been completed, so it is the perfect time to try out our new equipment. Also, in a place like this, it is very rare for our students to get the chance to talk to those who have excelled in the Gaokao, so thank you.‖

gave speeches and teachers and children were free to ask questions. At 11 a.m. the volunteers held a session on how to be a top student, how to get into a good university and how to fulfill dreams. The first speaker was Li Jun who now studies sciences

When it was time for lunch, the volunteers led cooking activities with the students. The food tasted all the better because they had made it with their own hands. Midea likes being part of the local community, donating several million US dollars in Beijiao, the founder‘s home town, every year. Charitable activities in other countries will increase as the company grows around the world.

11 Advances Newsletter, July, 2015

Newsline

Malaysia Press Conference and Dealer Meeting By Advances

M idea Malaysia held a press conference at the First World Hotel in Genting Highland, Kuala Lumpur on June 30. At the same time it held a national dealer conference. The meeting saw more than 650 distributors attend and was the first of its kind since Midea Malaysia's concep- tion in 2008. More than US$8 million worth of orders were placed in one day. The conference was the first time many of them got the chance to see Midea's entire product range. New products that have particular potential in the country include the Mission series split air conditioner, the Vandelo series washing machines, the IH rice cookers, and the DC inverter fan lineup, and the slim-profile instant water heater. The team that organized the conference

Thomas Hollefeld, representing the Midea Group Interna- tional Headquarters, gave a talk introducing some of Midea's strengths and its plans to grow the brand around the world. After that, the two men unveiled the new product: The Marine series top load washing machine. In the afternoon, Jackie Huang and Mark Tam of Midea Malaysia told the dealers who were gathered about Midea's strategy, its products, and their selling points in the local market. They also announced the schedule of promotional activities for the next six months. Distributors were then free to check out

A model poses next to a range of fans

In the morning was the press release for the new products. Midea Malaysia CEO Ng Kong Chin gave a speech, talking about Midea's eight-year history in the country. "Introducing a new brand into Malaysia is not easy. Introducing a Chinese brand is even more difficult," he told the conference. "After eight years of hard work, Midea-brand air conditioners have a market share of 8 percent, Midea brand washing machines have a market share of 12 percent. We will keep working and investing until Midea becomes one of the top three brands in the industry," said Ng Kong Chin. The function room at the First World Hotel

12 Advances Newsletter, July, 2015

NEWSLINE Malaysia Press Conference and Dealer

By Advances Meeting (Cont.)

the product range and receive introductions and demonstrations from experts. At the after-party, there were performances and lucky draws. Ng Kong Chin also handed out honorary certificates and souvenirs to the more than 20 distributors who have sold more than RM 1 million (US$266,916) worth of Midea products. This event showed the media and dealers a new vigor from Midea. With the vastly expanded product portfolio featuring unique technology combined with high quality, the stage has been set for Midea to reach new heights in Malaysia.

Range of washing machines on display

Ng Kong Chin and Thomas Hollefeld present the new washing machine

Range of refrigerators on display

Prize winners

Distributors receive their certificates

13 Advances Newsletter, July, 2015

NEWSLINE Japanese Expert Looks to Rugby for Wisdom

By Kevin McGeary

sponsibility is complicated. It is important to always remember M iyaguchi Junichi has been working with rice cook- how our jobs relate to each other and to take advantage of our ers for 40 years. After spending much of his career with Toshi- strength in numbers. In this sense, the game of rugby has a lot ba, he is now a senior specialist in the Research & Development of wisdom to offer," said Miyaguchi, citing a sport in which (R & D) team in Midea‘s Small Appliances Division. Japan will be World Cup host in 2019. He has been a key player in the suc- "Unlike in similar sports such as American cess of the Midea induction heating (IH) football, players are not allowed to pass the rice cooker, which has been a star product ball forward, therefore their teammates must since it was launched in Tokyo in April. stay behind the ball, always be aware of what On MIP, Midea‘s internal website, he has is going on in front of them, be prepared to espoused some ideas about the game of receive a pass and carry the ball toward the rugby and how many of its disciplines are destination. A good player will trust their transferrable to business in general and teammates to be there and know when to Midea in particular. make use of them," said Miyaguchi, drawing a "The purpose of a business is to comparison between the sport and his own bring something of value to society," said Miyaguchi, adding that job in the Small Appliances Division. the role of the Small Appliances Division is to improve the liv- Other life lessons that rugby is said to contain include: be ing standard of the consumer and invest a decent amount of its patient, opportunities will come; play with passion; the real profit into continuing this process. world comes without padding; and true accomplishment does "Midea is a huge company in which the delegation of re- not require mass hysteria for validation.

Midea-Japan Celebrates 14th Birthday

By Wei Xin

ca and Western Europe, Japan – one of the most advanced soci- M idea-Japan celebrated 14 eties in the world – is somewhere Midea has years of operations at the beginning of grand long-term ambitions. The office will July. In 2001, when Midea‘s Japan of- this year go from having eight employees to fice was first established, the group‘s having 20. revenue outside China was US$1 bil- Midea-Japan excels in the fields of compres- lion, this has since increased to over sors and inverters and is largely staffed by US$8billion so it is time to get excited highly trained tech professionals. Based in about the future. Osaka, it is making gains in the Asian coun- Fourteen years ago, Midea‘s brand try‘s air conditioning industry. Midea-Japan awareness was comparatively weak in this year moved into a new office to help China and non-existent outside. To the group break into a market where stand- enter Japan, home of the world‘s leading appliances brands, rep- ards are sky high but are dizzyingly exciting growth opportuni- resented a brave step. Along with the countries of North Ameri- ties.

14 Advances Newsletter, July, 2015

Newsline International HQ 'Reaches for the Top'

By Kevin McGeary

T he recently established Midea International Head- quarters organized a day of sports activities for staff at Guang- zhou University on July 4. The event, titled Reach for the Top, enabled the more than 120 attendees to get used to working with each other. Staff were divided into six teams: pink, yellow, sky blue, royal blue, purple and orange, each of which had a name and a catchy slogan that it would chant. The activities themselves test- ed speed, teamwork and logic and were of varying degrees of elaborateness and silliness. Men had to carry women along the surface

The teams, led by banner bearers, enter the arena

Upon reaching the end, the women had to skip ten times.

Warming up

Activity 1: Running Man The first activity was inspired by the smash hit TV show ―Running Man.‖ It involved piggy-back riding, running bare- footed and skipping across a spiky surface while carrying a beach They then had to carry a ball back across without using ball together without using hands. hands.

15 Advances Newsletter, July, 2015

Newsline International HQ 'Reaches for the Top' (Cont.)

By Kevin McGeary

Activity 2: Ride the Dragon across the River Activity 4: Hanoi Tower The second activity required synchronicity and speed as This activity is a kind of relay race that involves swapping teams raced an inflatable dragon, taking the form of a giant cen- the rings from pillar-to-pillar in a certain order. It requires as tipede, across an imaginary river. much logical thinking as completing a Rubix cube.

Activity 3: The Moon Orbiting the Planet Teams had to bounce a beach ball on a cloth to a finish Activity 5: The Magic Carpet line and back without touching it or letting it drop. This activity involved passing ball along a sheet while running to a destination and back again. The players holding the ball are unable to run with it, players are also of course forbidden from touching it.

16 Advances Newsletter, July, 2015

Newsline International HQ 'Reaches for the Top' (Cont.) By Kevin McGeary Activity 6: Bouncy Castle Assault Course The assault course for the last activity may have looked as if it was made for children but it contained walls to climb, hoops to crawl through and fences to jump.

The winning team with their gold medals and trophy

Presentation Ceremony The teams pose together The overall standings were decided by a points system similar to a decathlon. With characteristic showmanship, the announcer declared that team 3 Dancing with Fire was the win- ner, with team 2 ―Oh My God‖ finishing as runner-up.

Participants leave their footprints on a commemorative poster The results are read out

17 Advances Newsletter, July, 2015

Newsline Appliance Fair Held in Philippines

Paolo Concepcion

C oncepcion Midea Inc. (CMI) held its first Midea Appliance Fair in the Concepcion Industrial Corporation (CIC) Canteen from July 13-16. Through this event, more than 500 CIC employees were able to learn more about Midea and its product range in the Philippines. They were also given the chance to purchase products at discounted prices. On the first day of the exhibit, a program was held to introduce Midea and its various product lines. Heating, ventilation and air conditioning (HVAC) products were presented by Product Management Officer Jo Anne Salazar. In the washing machine section, the topic of One Peso Wash and Water Magic Cube were highlighted by Product Management Officer, Kriza Portillo. The One-Peso Wash simply means that its Quick Wash cycle would only cost One Peso (US$0.02) in electricity. This is important for the Filipino market as electricity costs in the Philip- Manager Bea pines are very Santos. After high. each presen- Refriger- tation, a ators and short game Small Appli- was done to ances were engage em- presented ployees in with cooking the program. demonstra- The exhibits tions by Assis- were left in tant Product place for several days so CIC employees could check out the products for themselves. More cooking demos were done to entice attendees on the ―never knew before‖ usage of the digital multi-cooker/pressure cooker. On the first day of the event, 62 Midea products were bought by CIC employees. Sales were also strong among CIC employees as the demonstrations left them liking what they saw. The event, which also contained lucky draws, was a pilot run to see how locals would react. It also received positive reviews from Raul Joseph A. Concepcion CEO of CIC. Fur- thermore, this presents a learning opportunity for the marketing team as they try to penetrate various offices in the metro and duplicate this efforts toward strengthening the brand name of Midea in the Philippines.

18 Advances Newsletter, July, 2015

Newsline Belarus Factory Makes Its First Water Heaters

M idea‘s Belarus factory has begun produc- ing the first Midea-branded water heaters to be manu- factured in Europe. The water heaters will be distrib- uted throughout Europe and the former Soviet bloc. The Belarusian capital of Minsk has a strong manufacturing tradition and Midea has the experience, resources and know-how to make water heaters fit for the target markets. Research and development engineer Zhong Guorong went to Minsk to lead a two-day training session in products, quality, manufacturing and after-sales service. Engineers filmed themselves going through the

largest household appliances and consumer electronics producers in the former Soviet bloc. The companies that are part of Horizont Group now render a wide variety of services starting from commercial property development, engineering, designing, construction and management to logistics, catering, medical care, recreation and social service.

key processes step-by-step for future reference. Quality control engineer Mu Jie led tests to make sure that each worker knew what they were doing. By the end of the training session, the first water heater had been completed. The factory will help Midea's local joint venture with Horizont achieve its potential. The Horizont-Midea joint venture was set up in 2007. Belarus holds 70% in the company. The Chinese share is 30%. Highlights in its history include an official visit from Belarus President Alexander Lukashnko in 2010.

About Horizont Founded in 1950, Horizont Group today is one of the The presidential visit in 2010

19 Advances Newsletter, July, 2015

NEWSLINE Our Very Own Silicon Valley

By Kevin McGeary

T he eastern area of Midea Industrial City in Shunde to benefit areas has been named Midea‘s own ―Silicon Valley‖ after it was estab- such as Africa, lished to complement the neighboring M-Smart Headquarters India and West- and Central Research and Development Institute. The valley, ern China. which already employs 130 people, will bring together various ―Silicon strands of what the company is trying to achieve in areas such as Valley‖ has be- manufacturing and consumer research. come a catch-all Silicon Valley, in its original sense, is a nickname for the term for a global southern portion of the San Francisco Bay Area in the United hub where an States where many of the world‘s leading tech companies and a industry‘s lead- large ecosystem of start-ups are based. Midea‘s Silicon Valley is ing ideas and What the Silicon Valley will look like currently being used to research water management and waste cutting-edge prod- manage- ucts originate. A 2012 article in Harvard Business Review called for ment the creation of a Life Sciences Silicon Valley. This year, Christian technol- Science Monitor published a piece listing non-American compa- ogy and nies that were beating Silicon Valley at its own game, citing Xia- how omi‘s competition with Apple and Indian e-commerce company such Flipkart‘s battle with Amazon. technol- Like the original Silicon Valley, the eastern area of Midea ogy can Industrial City will bring together research, applied sciences and be incor- some of the world‘s leading minds in the field to ultimately porated bring the optimum experience to the consumer.

RAC and Xiaomi Hold i-Youth Seminar

By Kevin McGeary

ers is how can they maximize convenience to the user and give S enior representatives of Midea Residential Air Condi- them the best possible experience in the brave new internet age. tioning (RAC) got together with counterparts at Xiaomi to hold The particular purpose of the event was to promote the i-Youth the i-Youth Seminar in Beijing on June Smart Air Conditioner, which can be con- 30. Head of RAC Wu Wenxin and trolled through a number of platforms and Xiaomi Vice President Huang Jiangji Xiaomi products including bracelets. talked about how a manufacturing This partnership, which was established in giant can work with an internet pio- late 2014, is aimed at keeping both compa- neer to lead the way in smart home nies at the forefront of ―smart home‖ technology. Themes discussed includ- technology as the Internet of Things revo- ed ―The Fast Track to Success‖ and ―Made in China 2025.‖ lutionizes people‘s relationship with their home appliances. i- 2015 is a particularly competitive year in the Chinese resi- Youth is one of the partnership‘s biggest success stories so far. dential air conditioning industry, so the question to manufactur-

20 Advances Newsletter, July, 2015

Language Don’t Shoot the Interpreter

By John Baker

though, that he/she may also secretly wish that he/she was the This is part of a series about language learning. The author gradu- powerful businessperson making big decisions on behalf of a ated from Cambridge University with a Master's degree in Engineering large corporation, rather than being the ‗middle-man‘? and spent several years working in financial services in London before So don‘t be jealous of someone who speaks more lan- moving to China. guages than you. We don‘t need to have hang-ups about the He is currently based at the Midea Group headquarters, working fact that we don‘t speak all the languages in the world. No- in Midea International Business’Strategy & Human Resources team. body does. There‘ll always be situations when you meet people who speak languages that you don‘t speak. Don‘t bother envying them, as it‘ll lead to you worry about learning a lan- S ome people make a living out of their language skills: guage, which will get in the way of learning in a natural way. doing international trade, working in multi-national corpora- As children, we don‘t have any hang-ups about language learn- tions and, of course, being professional interpreters. ing, we just relax and get on with it. As adults, we should do When you start learning a the same. language, it is easy to assume that The first few months of learning a the days when you‘ll be able to language are usually the time when speak the language well are a people have the most doubts long, long way off. If that‘s the about whether or not they‘ll be case, it‘s easy to start envying able to achieve their target. The people who speak several lan- same may be true of any project or guages. undertaking, but somehow lan- I‘ve spoken to quite a few guage study is one aspect of life professional interpreters and that has a peculiar ability to cast some of their comments about fear into people‘s hearts. their work surprised me. On As I‘ve said in previous articles, reflection though, they make that fear most likely arises from perfect sense. If you‘ve ever previous attempts to learn a lan- thought of interpreters as hold- guage (using a method totally un- ing a certain amount of power, or Nobody’s life is enviable in extreme close-up suited to the task), and the common subconsciously been jealous of myth that language learning is diffi- their language skills, take a moment to put yourself in their cult. Whilst learning a language is something that can‘t be position. rushed – we weren‘t in a rush to learn our mother tongue – it‘s During business negotiations, it‘s easy for an interpreter certainly not something that has to be difficult. to worry that both sides will think he/she is trying to get the To embark on a project in the right frame of mind, it other side to give him/her a secret cut or commission – doing helps to eradicate anything that‘s giving you negative feelings a secret deal with the one side that the other side can‘t under- about the endeavor. Unlike other negative emotions such as stand. When he/she asks questions to try to fully understand fear or anger envy serves no purpose, so do not envy other the situation before translating, sometimes the parties to the people‘s language skills or pay no attention to those who envy negotiation start to think that the interpreter is trying to take yours. over the conversation. Instead of being jealous of each other, let‘s relax. After If you‘ve ever relied on an interpreter for help, you may all, tension, fear and worries are one of the biggest barriers to wish you had his/her language skills. Have you ever thought learning.

21 Advances Newsletter, July, 2015

Big Picture The Rise and Rise of Spanish

By Berta Lorente

Crown of Castile in the center and south of the peninsula. In L anguages, like empires, inevitably rise and fall. Rea- the 16th century, due to the colonization of America, Spanish sons why they rise are similar: resilience, luck and necessity. spread throughout much of the Americas and has been ever English, today the most studied language in the world, started present since. life as a minor Germanic dialect around 500 AD. Latin, the The Spanish language is present on six continents. As well standard language of science until the 18th century, later became as being the official language of over 20 countries, it has a de- the subject of the children‘s rhyme: ‗Latin is a language, as dead gree of formality in the United States, the Philippines and Oce- as it can be, it killed the ancient Romans, and now it‘s killing me‘ ania. About 400 million Spanish speakers worldwide, 95% of If you go to Yangshuo, a popular tourist destination in the total, are in the Americas, specifically in Latin America and south China, there is a good chance you will hear Japanese, Rus- some US states. sian, German and Korean travelers communicate in English. Similar to British and American English, Spanish is spo- This suggests English is and will remain the language of the ken in different ways throughout the world. It is especially di- world, but it is not the only one that is growing. verse in the way it is written. Two of the most common differ- Of any language today, Spanish is the third most spoken ences, the use of "you" in Spain, which is used to address the and second most studied. Like English, it third person singular, while Hispanic Americans, came from humble beginnings. Derived use it to mean "you" informally. Nouns can also mostly from Latin and is the official lan- be different, the word for computer in Spain is guage of Spain, nineteen countries in the "ordenador", while in Latin America it is Americas, and Equatorial Guinea, a small "computadora". oil rich country on the west coast of Afri- In the 21th century, Spanish has around 470 ca. million people who speak it as a first or second Spanish is also known as Castilian, language, second only to Mandarin. It is the as it has its origin in the region of Castile in Spain. It evolved third most spoken language in the world and has over 20 mil- from several dialects which were descended from Latin in the lion students. Iberian Peninsula after the fall of the Roman Empire in the 5th The language will continue to expand. It is anticipated century. The Moorish invasion of the 8th century meant Spanish that by the 2050s, 10% of the world‘s population will speak it, also became highly influenced by Arabic. according to the Cervantes Institute. In a highly competitive job In the Christian kingdoms of subsequent years, there were market, an increasing number of people are realizing the useful- several Romanesque forms: Catalan, Navarre-Aragon, The Cas- ness of a language that is spoken in so many countries that are tilian, Asturian-Leon and Galician-Portuguese. At the end of the playing a bigger role in the global economy, according to Luis 11th century it began a process of linguistic leveling which re- Hu (胡路平), owner of Louis International Language Acade- sulted in the formation of what is now known as the Spanish my in Foshan, Guangdong province. language. Not only can Spanish help you book a hotel room in As King of Castile, Alfonso X (1221-1284) fostered the Madrid or Buenos Aires, it can help you see into the heart of development of a cosmopolitan court that encouraged learning. Borges, Cervantes, Marquez and so many others. Author Rita As a result of the subsequent translations of works from Arabic Mae Brown said language is the road map of a culture, and and Latin into the vernacular of Castile, many intellectual chang- Spanish is native to a wider variety of cultures than any other es took place, perhaps the most notable being encouragement of language in the world. the use of Castilian as a primary language of higher learning, The author is an intern from Spain who this summer used her time science, and law. at Midea’s international headquarters to do translations and give Spanish Thereafter, it spread gradually with the expansion of the classes.

22 Advances Newsletter, July, 2015

IDEA Idea of the Month: Politeness

By Kevin McGeary

you‘re about twice as likely to experience incivility in the P oliteness is the most respectable form of hypocrisy, workplace as in the 1990s. said American satirist Ambrose Bierce. Business etiquette, with However, the explanation for it hasn‘t changed since its formality, dress code and worship of status would appear to 1899. Porath‘s work shows that around 40% of us, across back him up. Few businesses are brave enough to rebel. multiple industries, say we‘re rude because we haven‘t the time However, Forbes magazine argued July 10 that politeness to be polite. kills careers and businesses. Politeness causes people to fail to Oliver Burkeman, writing in The Guardian on July 10, identify weaknesses and which virtues that can spill over into pointed out that many forms of politeness take no time at all. vices. It is no quicker to scowl than to smile, or to talk quietly into The persona you have at work could be the joker or the your phone on the train, rather than bellowing. prankster, the person who tells it like is, or the one who is Moreover, to judge by Porath‘s research, rudeness at hyper-organized. These traits can all inspire positive feedback. work is rarely a good time-saving tactic. When bosses treat However, in excess any of those things can be weaknesses. employees rudely, it causes productivity and creativity to A funny person can become facetious, a prankster can plummet, so in the end rudeness slows things down. become sadistic, a frank person can become a One example of something that is supposed to be verbal bully, and an organized person can be anal. timesaving but that has the opposite effect is For every Dr. Jekyll quality, there may be a Mr. acronyms. If professionals are using jargon to Hyde characteristic underneath. communicate with each other, then fine. But As Forbes says, Achilles‘ heels can include: business writing is all about knowing your talking too much; shooting down ideas; worrying audience, there are very few acronyms that are about your outside interests more than work; universally recognized: VIP, CEO, RIP to name making sure that fools know they‘re fools; being some. excessively spontaneous or excessively rigid; always Would it not just be easier and ultimately save Christine Porath avoiding risk, or always plunging into it.‖ confusion to write the words in full? The same goes Success requires self-awareness and we all need to know for the new abbreviation ―rgrds‖. It may send out the message: how we truly come across. The best buddy road movies such as ―I am so productive I don‘t have time to write the word ―Planes, Trains and Automobiles‖ are about characters who ―regards.‖ It may also show contempt and condescension. grow by learning how their personalities can annoy as well as American humorist John Billings said one of the greatest endear. victories you can gain over someone is to beat him at Unfortunately, to gain this self-awareness, we need to hear politeness. Legendary soccer manager Sir Alex Ferguson is a the truth about ourselves and that is not always possible in a case in point. civilized society. If everyone said to everyone else‘s face what When he led Scottish minnows Aberdeen to the 1983 they really thought, people would only leave home to get in European Cup Winners‘ Cup final against Real Madrid, he fights. presented his opposite number with a bottle of champagne to In many ways, politeness is not conducive to running a show how honoured he was to meet him. This only fed into company or holding a job. Manners maketh man but time is Real Madrid‘s misguided sense of superiority which led to their money. ―It appears to be the case that in these modern days defeat. many people have no time to be polite,‖ grumbled the New If you are a celebrity, you may not be able to sign every York Observer in 1899. autograph but you also don‘t have to punch paparazzi. As for Though every older generation complains about the the claim that politeness prevents people from learning about decline of behavior, rudeness does appear to be increasing. themselves, anybody who had good teachers at school knows According to Dr. Christine Porath, professor of management at you can criticize people without being a jerk and that not all Georgetown University, writing recently in the New York Times, criticism is helpful.

23 Advances Newsletter, July, 2015

People Perfect Chemistry

By Zhang Xuefei

and realize my potential,‖ C hemistry is an Hong told an internal ancient science and some- publication. thing to which all life is relat- Graduation from his doc- ed. Dr. Hong Yanzhong of toral program was a begin- Midea Residential Air Condi- ning as well as an end. tioning (RAC) has been fas- After all, learning is only cinated with it since Autumn valuable if it is put to prac- 2006 when he started univer- tical use. sity. Born in Xinyang, Henan Shortly after graduating, Province on Chinese New he joined Midea Residen- Year‘s Day, 1988, Dr. tial Air Conditioning Hong‘s entire adult life has (RAC) where he strives to revolved around Chemistry. apply the principle of us- His bachelor‘s degree ing scientific method to involved throwing himself improve people‘s lives. into every course, gaining During his studies, he did overall competence and appre- Dr. Hong Yanzhong a work placement at RAC ciating the subject‘s im- where he fell in love with portance to society and how the environment in which it understanding Chemistry has been improving human life for is encouraged to think differently. centuries. Hong‘s undergraduate His title is structural studies were broad but not deep, so development engineer and as soon as his undergraduate de- the department he uses gree came to an end, Hong decided focuses on research and to continue his studies. development for non- As a postgraduate student, Hong utilitarian ends. In this re- was lucky enough to study under spect it is similar to still Jin Xianbo of Wuhan University being at university. and Chen Zheng of Nottingham RAC gives Dr. Hong University. Both are experts in ma- the chance to get paid for terial chemistry and physics. Hong using the things he learned had the best guidance available at university. Having spent when doing his research on new so much time in full time Dr. Chen Zheng of Nottingham University energy materials, alloy materials, and education, Dr. Hong is in Dr. Jin Xianbo of Wuhan the preparation and application of some respects a freshman in University composite materials. the college of life, but he has Hong was struck by the unassuming styles and diligent found a nurturing environment at RAC. guidance shown by the professors he was studying under. ―My Midea brings in top talent from the world‘s best institu- nine years as a college student were the most precious and bene- tions of education. It also gives them room to be the person ficial time of my life. They enabled me to vastly expand my mind they want to be.

24 Advances Newsletter, July, 2015

MIBC The Coming Together of Countries

By Kevin McGeary

of individual markets T he Midea International Business Conference (MIBC) India, Brazil and Rus- was held July 30-31, drawing representatives of over 20 coun- sia. tries and regions to the Midea Group headquarters in Shunde. Most speeches Speakers included Midea International Business‘ Product Line were about internal Manager Thomas Hollefeld, Head of Human Resources Kaiser issues including Chen and Peter Goldman, Vice President of international mar- Thomas Hollefeld‘s review of the first half of this year and lay- ket research organization GfK. ing out the plan for the second half. After stating the goal of Memorable moments included Kaiser‘s citing of a famous becoming one of the top three heating, ventilation, and air con- Thomas ditioning (HVAC) brands in the world, Thomas stressed the Paine need to be organized across the whole value chain and work in a quote consumer-centred way. about risk Sophie Shao explained the new word she had invented being es- ICE, short for integrated sential to consumer experience. Her entrepre- speech covered matters neurship that will be required to Peter Goldman of GfK and Thom- engage consumers: from as sponsorship events, to Hollefeld‘s confession that this was the first time in 20 years that brand slogans to social he had worn uniform (not since his army days). media. Peter Goldman was one of the few non-Midea employees Other speakers in- Sophie Shao encouraging ICE to be invited to the conference. His speech began with the ques- cluded Anthony Wong who tion of what the world will look like when there are 3 billion talked about how DHL could help companies improve efficien- middle class consumers, which is where our current trajectory is cy and reduce operational costs. Coobie Zhang, President of leading us. Midea International Business gave a one-hour closing speech in He stressed the need for risk taking in business, pointing which he pulled everything together and talked about the future out that most of the Japanese and Korean companies whose of the company. footsteps In his memorable speech he called for Midea to be more Midea is like a helicopter: firmly on the ground but able to rise up and trying to see the big picture. Citing a Song Dynasty poem, he also called follow in for Midea to be more like a duck: dwelling in a place where it made could feel the changing of the seasons before any other crea- major ture. mistakes On the evening of July 30, along the all attendees were invited to a way. He banquet at the Shunde Marriot then where, as well as the famous shared in- local cuisine, guests were invited depth to play games whose winners Thomas Hollefeld (center) about to reveal the first analysis uniform he has worn in 20 years. won prizes including Midea WIFI converters. Coobie Zhang: “Be helicopters”

25 Advances Newsletter, July, 2015

MIBC The Coming Together of Countries (Cont.)

By Kevin McGeary

Advances solicited the feelings of attendees from various countries. India—Sukhwant Singh is Chief Financial Officer of Carrier-Midea India. Up to Argentina— German B. Damiano now, the joint venture has mostly been of Midea-Carrier ABC said the past year involved with residential air conditioners, has been a success. Residential air condi- but Singh said they were about to move tioning was particularly lucrative, accord- into other areas. ing to Damiano. ―Soon we will launch washing machines, When asked why this was, Damiano water heaters, water purifiers and other cited good distribution, strong processes, a skilled HR team and products,‖ said Singh. a strong brand. The joint-venture‘s Surrey brand is particularly When asked about the sponsorship of Indian Premier successful. ―Our biggest challenges now include increasing our League cricket team Royal Challengers Bangalore, he said it was range of appliances and building brand awareness,‖ said Dami- great, bringing association between the Midea brand and some ano. of the top figures in India‘s most loved sport.

Singapore—Julius Oczujda is a Human MACC—Eli Glanzberg has been Pres- Resources Specialist who has been with ident of Midea America & Canada Corpora- Midea since 2013. He is currently based in tion (MACC) since January 2014. Previously Singapore, where the Midea brand had no he served as vice president of the corpora- presence whatsoever as recently as 2010. tion and general manager of the refrigeration ―In just five years we have gone from zero and laundry division. to being present everywhere where white He said he and his colleagues enjoyed goods are sold and having a great deal of the speeches. In terms of his own branch‘s visibility,‖ said Julius. When asked what progress, Glanzberg said that one of the challenges Midea still faced in the city state, biggest success stories of the past year was he cited its brand status. ―Chinese brands getting big placements in Walmart. are still not as trusted as Japanese brands,‖ said Julius, adding ―RAC has been pretty good for us, as has refrigeration,‖ that in the next year the product range in Singapore would in- said Glanzberg. crease. Germany—Michael Habla has been with Midea for seven Egypt—Amr Said is Miraco man- years. He described this year‘s MIBC as detailed and well orga- aging director for Egypt and Africa. He nized, saying that the event becomes more well-structured every said that the past year had been particu- year. larly successful in terms of residential air ―Midea and its brands are still only mak- conditioning. ing baby steps but it is a long long pro- His stated goal is to make Midea cess, said Habla. He has been at the one of the biggest brands on the conti- company through a large number of nent. ―It is a top company, with great structural changes so has worked under products and a good brand. In Egypt we want to help it gain its RAC, the now defunct Midea Interna- rightful place as one of the leading brands in the industry,‖ said tional Division and is now with Midea Said. International Business.

26 Advances Newsletter, July, 2015

SNAPSHOT

Midea in Mexico