The president of Midea, Fang Hongbo, shared the overseas deployments plans with investors on May 17.
In 2020, Midea (000333:SZ) achieved overseas revenue of CNY 121.1 billion, making up 42.6% of the total revenue. Facing increasing foreign exchange costs and uncertainty of the prices of raw materials, the company states that they have been preparing to reduce the operational risks, with measures including hedging materials costs, digital transformation on the global business, increasing deployment of e-commerce, and overseas channels.
As for the strategies, Fang indicated that they vary in different regions. In the US, the Midea cooperates with Eureka; in Southeastern Asia, Toshiba and Midea dominate the market with Comfee supported; the combination of Toshiba, Midea and Comfee also the main deployment in Europe, but the cooperation with local brands are being considered.
What is more, Fang says, every department of Midea has established the e-commerce brand itself, which is expected to boost the overseas e-commerce business development with over 20% revenue contribution by 2025.
The strengthening of overseas plant productivity is another key deployment. The 17 plants will continue to explore local productivity levels and build more home appliance sales channels. Also, replicating the successful experiences in domestic production might increase efficiency as well.
In sum, all the revenue contributed by the overseas market will reach USD 35 billion in five years, with a market share of 10%. To be specific, five strategic markets, Japan, the US, Brazil, Germany and Southeast Asia, will hit 15% market share.