Author | Huang Yu Editor | Liu Baodan Last year, thanks to the success of the "Speeding" on iQiyi, the company has had a difficult time recently. On the one hand, the explosively popular TV series is on hiatus, and on the other hand, the derivative concert of the variety show "Plant Some Goodness" has been criticized for "free offline but paid online." According to Wall Street News, the second Wheat Field Music Festival, produced by iQiyi's reality show "Plant Some Goodness," was held on June 6th. Some viewers had previously received free offline tickets through official activities, while online viewers, even iQiyi members, had to pay RMB 12 for viewing, and the viewing period was valid until June 14th. This differentiated pricing model has caused dissatisfaction among many viewers, who question that iQiyi's move is "cutting corners." In response, iQiyi's customer service said, "You can buy tickets to watch the concert live according to your own needs, and the edited content of the concert will be launched on the main platform in the future." In fact, this is not the first time that long video platforms represented by iQiyi have been accused of "cutting corners." In recent years, membership grading systems, early access, and inventory restrictions have often caused user backlash, in addition to paying extra for derivative programs. The differential pricing model reflects the growth anxiety faced by long-form video platforms such as "i优腾."

In today's weather is good. Today's weather is good.

In the new wave of Chinese companies going global, Haier, as an old player, has made big moves.

Recently, Haier Zhijia (600690.SH), a home appliance listed company under Haier Group, signed relevant transaction documents with Electrolux Group from Sweden, and will acquire 100% equity of Electrolux South Africa Proprietary Limited ("ESA"), which is engaged in the water heater business in the South African market and its home appliance business personnel will be taken over.

The cross-border transaction has a price of ZAR 2.45 billion, approximately RMB 0.98 billion. The transaction is still subject to regulatory approval and is expected to be completed in the fourth quarter of 2024.

Behind the large-scale acquisition, Haier Zhijia was attracted by Kwikot, a century-old water heater brand owned by ESA.

It is reported that Kwikot's business covers storage-type electric water heaters, solar water heaters, multi-energy solutions, gas water heaters, heat pumps and other diversified products and solutions, making it the leading water heater manufacturer in South Africa, with a complete sales channel and after-sales service system in South Africa.

It is worth mentioning that with regard to profitability, ESA's EBITDA profit margin is in double digits, which is basically the same as that of Haier's water and electricity business (operating profit margin of 11.9% in 2023).

Huawei News learned from Haier Zhijia that this acquisition is an important strategic layout of Haier Zhijia in the African market. With ESA's sales channels and after-sales networks in South Africa, further enriching the product lineup of the water heater business while expanding the development of Haier's other white goods products in the South African market.

Haier Zhijia's targeting of ESA also stems from the growth potential of the African market.

As for the water heater market that Haier Zhijia chose first, Research Nester data shows that the global instant water heater compound annual growth rate (CAGR) from 2022 to 2031 is 9%. Among them, the expected growth rates in North America, Middle East and Africa, and Latin America are the highest, mainly due to the improvement of energy efficiency awareness and emerging economies.

Huachuang Securities analysts pointed out that this acquisition, as a strategic layout of Haier for the African market, not only avoids the potential geopolitical risks of China, the United States and Europe, but also can fully enjoy the development dividend brought by the low penetration rate and high economic growth rate of emerging markets, with huge incremental space in the future.

In addition, for Haier Zhijia, this acquisition is also intended to make up for the shortcomings of its layout in the Middle East and Africa and accelerate the increase of local market share.

According to Euromonitor data, in 2022, Haier's share of the global appliance market reached 17.1%, with a market share of over 24% in strong regions such as Asia-Pacific and North America, but only 4.4% in the Middle East and Africa, significantly lower than in other regions.

In recent years, Haier has been continuously making up for the shortcomings of its layout in the Middle East and Africa. For example, in May of this year, Haier Egypt Ecological Park was officially opened, with a total design capacity of more than 1.5 million units, including air conditioners, washing machines, televisions, refrigerators, and freezers.

Haier's data shows that Haier Zhijia has achieved a doubling of growth in the Middle East and Africa in three years. Among them, in Nigeria, Haier refrigerators rank first in the market; in Egypt, sales of high-end air conditioning series have grown cumulatively by 122%; in Ghana, high-end drum washing machines have achieved 30% growth, and so on.

In fact, as early as 1998, Haier officially entered the African market, becoming one of the first markets it chose to layout after launching its globalization strategy.

With expanding influence and brand awareness, in 2001, Haier established overseas air-conditioning manufacturing bases in Algeria, Nigeria, and Tunisia. In 2019, Haier officially established a trading company in Egypt and transformed into a high-end localization brand in 2020.

As one of the three giants of China's white goods industry, Haier has achieved the most significant results in globalization. This is because founder Zhang Ruimin started to firmly promote Haier's globalization strategy early on, and opened up the market with independent brands and acquired overseas brands, giving Haier an advantage.

In terms of revenue proportion, Haier Zhijia's overseas market revenue was RMB 136.4 billion in 2023, a year-on-year increase of 7.6%, accounting for 52% of total revenue. Midea's overseas revenue accounted for only 40.56%, and Gree was less than 10%.

During the process of going global, Haier formed a global brand matrix through mergers and acquisitions, acquisition of brand business lines, including seven major brands: Haier, Casarte, Leader, Aqua, Candy, GE Appliances, and Fisher & Paykel.

According to Huachuang Securities Research Report, in recent months, the export of home appliances has continued to strengthen, while the domestic sales production of air conditioners, refrigerators, and washing machines from June to August this year showed a basic downward trend compared with the same period last year, while export production generally maintained growth above high single digits. It is judged that emerging markets such as Southeast Asia, the Middle East, and Africa have contributed greatly to the export-driven growth.

"There are no successful companies, only companies that are in the age". Zhang Ruimin's forward-looking layout has finally brought Haier into its own era.

In recent years, Midea has held its position as the top revenue earner, while Haier and Gree have been competing with each other. In terms of market capitalization, Haier has long been at the bottom of the three giants.

However, starting in 2021, under the impact of external factors such as the epidemic, the market structure of the three major household appliances has changed, and the revenue gap between Haier and Gree has widened, and Haier's market capitalization has also surpassed Gree's.

In terms of revenue, in the first quarter of recent years, Midea achieved a revenue of 106.5 billion yuan, Haier Smart Home achieved a revenue of 68.98 billion yuan, and Gree Electric Appliances achieved a revenue of 36.596 billion yuan, with year-on-year growth rates of 10%, 6%, and 2.53%, respectively. The net income attributable to the parent companies were 9 billion yuan, 4.77 billion yuan, and 4.675 billion yuan, respectively, with year-on-year growth rates of 12%, 20.2%, and 13.77%.

Against this backdrop, Haier Smart Home has also become the darling of the capital market, with its stock price rising by nearly 50% this year. Although it has fallen back somewhat in the past two months, Haier Smart Home's stock price has still risen by nearly 23% year-to-date, higher than the price increases of Midea and Gree Electric Appliances.

However, as the domestic home appliance market enters the stock stage, exploring overseas markets has become an important direction for major household appliance companies to break through growth bottlenecks in recent years. Therefore, Haier will inevitably face more fierce competition in the overseas market in the future.

The difficulties that Haier still has to overcome include how to further enhance its global brand power, improve its relatively low profit margin, and explore its second growth curve.