With domestic consumption in a slump and headwinds battering the home appliance sector, Haier Smart Home has managed to buck the trend in the first half of 2024. Against a backdrop of uncertainty, the company’s latest financial report tells a story of resilience: revenue climbed to RMB 135.62 billion (USD 19 billion), up 3.03% year-on-year, while net profit shot up by 16.3%, reaching RMB 10.42 billion (USD 1.5 billion). Among China’s top appliance makers—Haier, Midea, and Gree—it was Haier that led the way in profit growth.
This success didn’t just materialize out of thin air. While a pivot toward high-end markets helped, the company’s overseas expansion has proven to be a game changer.
In the first half of 2023, Haier’s international revenue swelled to RMB 70.82 billion (USD 9.9 billion), a 3.7% uptick from the previous year. In regions like South Asia, Southeast Asia, and the Middle East and Africa, the company saw growth rates of 9.9%, 12.4%, and 26.8%, respectively. With more than half of its total revenue now coming from international markets, Haier’s global playbook is paying off in a big way.
One notable move came in July, when Haier acquired Electrolux’s South African water heater business, marking a significant step into Africa’s emerging markets. But this is just the latest chapter in Haier’s longstanding strategy to make inroads into the continent.
Back in 2023, Haier broke ground on a USD 160 million eco-industrial park in Egypt. The park, operational by the first quarter of 2024, spans around 200,000 square meters and stands as the company’s first digital twin facility in the Middle East and Africa. With a yearly production capacity of over 1.5 million units, it supplies appliances to markets across Africa, the Middle East, and Europe. After two decades on the continent, Haier’s African adventure is moving into a new phase—one likely to be more intricate as it aims to deepen its presence.
Doubling down on South Africa
Since 2021, Haier’s international revenue has consistently outpaced its domestic sales, with growth rates abroad leaving its performance in China in the dust. By 2023, nearly 52% of the company’s total revenue came from international markets, with standout performances across North America, Japan, and Europe. In the U.S., subsidiary GE Appliances has been the fastest-growing appliance brand for two consecutive years. In Japan, Haier leads the white goods market, while in Europe, its Fisher & Paykel brand has topped growth charts for eight years running.
The company’s strategy for capturing international markets is clear: acquire well-known local brands to quickly establish market share and deepen its brand awareness. Haier leans on these acquisitions to tap into existing sales channels and resources, accelerating its global reach.
In South Africa, this approach played out in July when Haier inked a deal with Electrolux to buy out its South African business for ZAR 2.45 billion. Electrolux had carved out a niche in the water heater market, especially with its Kwikot brand—a staple in South African homes for over a century. Kwikot’s strong sales network and after-sales service give Haier an immediate foothold in the region’s water heater market, with opportunities to cross-sell its broader range of home appliances.
Haier’s first steps into Africa came in 1998 as part of its broader globalization strategy. By localizing its research, manufacturing, and marketing efforts, it established a strong brand presence in the region early on. In Nigeria, for example, Haier developed products designed specifically for the local market—like freezers that can keep food frozen for 100 hours during power outages and air conditioners that can run on generators. These innovations were well received, strengthening Haier’s brand across Africa.
By 2001, Haier had air conditioner manufacturing bases in Algeria, Nigeria, and Tunisia. In 2019, the company set up a trading company in Egypt, and by 2020, it shifted its focus to building high-end localized brands. Haier’s influence in Africa has even extended beyond home appliances, with Haier Biomedical establishing vaccination stations and solar-powered mobile clinics to support healthcare in underserved areas.
Charging into Africa’s white goods market
Africa’s home appliance market, while still developing, holds immense potential. Statista estimates the market will generate USD 61.36 billion in 2023, with an expected compound annual growth rate of 7.53% through 2028. South Africa plays a pivotal role, with its appliance market set to reach USD 3.64 billion by 2024, growing at an annual rate of 6.55% through 2029.
This surge in demand is largely driven by rapid urbanization, population growth, and rising disposable incomes. As Africa’s middle class grows, so does the appetite for high-end appliances, particularly in markets like South Africa and Egypt. Haier’s financial reports show robust growth in Africa, especially in the water heater and home appliance segments. With rising incomes and growing economies, the company is well positioned to capture a larger slice of the appliance market, particularly in refrigeration and other key categories.
For African consumers, reliability is a must. The continent’s inconsistent electricity supply makes energy efficiency a top concern when selecting appliances. Haier’s products, such as air conditioners designed to run on backup generators, are in high demand. Government programs promoting energy-efficient products are also driving sales, as consumers look for appliances that can handle the region’s unique energy challenges.
While Chinese brands like Haier, Gree, and Midea dominate Africa’s home appliance market thanks to their manufacturing scale and cost advantages, they face stiff competition. Gree has introduced photovoltaic air conditioners to help tackle Africa’s energy supply issues, while Midea has also tailored its products for local conditions, offering air conditioners that perform well in coastal regions and handle West Africa’s voltage instability with ease.
Yet, the competition in Africa’s home appliance market is heating up, with brands from South Korea, Europe, and beyond vying for a piece of the pie. As infrastructure improves and the region opens up further, the battle for market share will only intensify.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Lin Qingqing for 36Kr.