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Business

How the head of Haier Asia put his spin on white goods

Haier Asia CEO Yoshiaki Ito demonstrates a movable refrigerator robot, made in the shape of the "Star Wars" character R2-D2.

TOKYO   Haier Asia has a knack for putting innovative spins on everyday appliances. With one of its latest products, the Tokyo-based subsidiary of China's Haier Group may just have pioneered a new product genre -- the hand-held washing machine. We were so impressed with the device, dubbed the Coton, that we gave it the 2015 NIKKEI ASIAN REVIEW Award for Excellence.

     Spearheading the company's efforts to develop groundbreaking products is President and CEO Yoshiaki Ito. Though Japanese by nationality, Ito was born and raised in Bangkok and earned his MBA in the U.S. His border-blurring background and diverse resume, which includes stints at U.S. computer company Dell, Coca-Cola (Japan) and Sony Pictures Entertainment (Japan), may explain why his products are often a blend of the foreign and familiar. 

     Ito spoke with the Nikkei Asian Review about the Coton, innovation and what lies ahead for his company.

Haier Asia has come up with a number of convention-defying products, including the Coton and a refrigerator with liquid crystal displays. Where does your inspiration come from? Over the decades since the advent of white goods, such as washing machines and refrigerators, there have been few major attempts to innovate. This has led to a sense of stagnation in the consumer appliance industry.

     To break that stagnation, since taking my post in 2014 I have tried to build new business models that involve the use of home appliances, to bring innovations to existing product categories, and to develop products that are fun to use. The Coton meets all of these challenges.

     To create a new genre, you have to break free of fixed ideas about products. We questioned assumptions such as, "A washing machine belongs in the room where people get undressed to take a bath, as in most [Japanese] homes," and, "It's necessary to use a lot of water to wash clothes." Asking those questions led to the Coton.

The Coton has caught on not only in Japan but also in many other Asian countries. The product was initially developed for the Chinese market. But when I looked at the prototype, I was convinced it would sell well around the world. A product that carves an entirely new category is likely to be in demand worldwide. It also helps that we committed ourselves to making the washer run on batteries, which means it can be used even in the remotest parts of Africa, where neither water nor electricity is readily available.

     Currently, we sell the Coton in South Korea, India and the Philippines. We plan to start marketing it in Indonesia and Vietnam in 2016. Though it retails for a little more than $100 -- about the same price as some two-tank washers -- consumers seem to have accepted the cost because there are no comparable products.

     What is really important in the home appliance business is hikizan no bigaku (the beauty of subtraction). One should focus on truly essential or new functions, rather than trying to boost a product's appeal by adding as many advanced features and high-value-added functions as possible. The Coton is designed only to clean clothes.

     Large manufacturers tend to develop products based on what professional buyers have to say, or the findings of market research, but that does not lead to attractive products.

Southeast Asian home appliance markets are expanding rapidly. How do you intend to capitalize on this? As a unit of Haier Group, the major Chinese consumer electronics maker, Haier Asia oversees operations in Japan and Southeast Asia. When it comes to Southeast Asian markets, we plan to raise sales to 150 billion yen ($1.24 billion) in 2017, a threefold increase from current levels, by expanding sales of washers, refrigerators and air conditioners.

     Southeast Asians have little resistance to new products, which plays to our strengths. They accept new things better than conservative Japanese do. Once the infrastructure was in place [in the region], for example, the use of smartphones exploded, driving out fixed-line phones and the old Japanese-style cellphones. From now on, home appliance manufacturers are going to need to win over Southeast Asians to succeed.

Interviewed by Nikkei staff writer Rei Nakafuji

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