With technologies such as the internet of things and cloud computing, homes devices can have more purposes by being more intelligent and more connected.
Haier Smart Home Co CEO Zhang Ruimin said, “By creating connected appliances, we are creating an ecosystem to connect and engage with our users. We’re no longer selling them products but making them a lifetime user of our products and services.”
An example of a future connected device would be a smart refrigerator. The smart refrigerator would automatically allow groceries to be delivered without need for the consumer to go to the supermarket. While a connected refrigerator with that capability might be in the future, it is becoming more feasible.
Many of Haier's smart devices already have sensors that are offering new business opportunities as the company has linked its network devices with multiple industries to form a new ecosystem. As of August 31 2019, Haier Smart Home’s refrigerator-mediated food network has over 400 ecological resources including fresh food and recipe resources that brought in ecological income of 1.016 billion Yuan.
In the future, Haier Smart Home hopes to provide complete solutions to devices in smart living rooms, smart kitchens, and smart bathrooms that not only innovate but also combine with users' dynamic needs.
Small Data Can be Profitable
Big data has a lot of value because it allows companies to take the data and optimize processes to improve efficiency. Small data, such as in the case of the future connected refrigerator, can also have value too. In Haier Smart Home’s case, the company could potentially benefit by taking a fee from the grocery order process. With the new applications and services, Haier Smart Home has the potential to increase margins.
Haier Smart Home could also benefit from interconnected devices by increasing service levels and reinforcing customer relationships. If customer service is higher, customers could be more loyal to Haier Smart Home and the company could sell more items.
If it utilizes digital technologies successfully, Haier Smart Home Co Ltd could also potentially increase its margins by being more efficient.
Other companies are also working on creating smart home devices. If competitors build better digital ecosystems, Haier Smart Home Co Ltd could lose competitiveness and sales.
In its digital transition, Haier Smart Home Co Ltd could make products that don’t sell very well and the company could lose money.
The macroeconomic environment for Haier Smart Home Co Ltd could weaken and the company could lose money as a result.
Haier Smart Home Co Ltd has grown a lot since Zhang Ruimin took charge of a loss making refrigerator company in the 1980s.
In the past, Haier Smart Home has grown due to acquisitions, product innovation, and good marketing. In the future, the company could grow further if it utilizes the internet of things ecosystem correctly. Not only is there opportunity to create new smart functionality for existing consumer appliances, but also there is potential for Haier Smart Home to create new types of consumer appliances as well.