Brand is not only a sharp weapon for enterprises to compete on the world stage, but also an important factor to measure the core competitiveness of a country. With their entry into the world economic arena, Chinese enterprises, especially multinationals, have begun to focus on “brand building”. Recently, Haier Group has proposed the concept of “ecosystem brands” for the first time. It is an iterative and innovative concept about brand after product brand and platform brand and also the first worldwide clear proposal about how to create “brands” in the age of the Internet of Things (IOT).

Eco-brands are an exclusive product of the IOT age

Essentially, traditional brands are product brands which rely on product quality and marketing systems. At that point, original equipment manufacturing (OEM) for overseas famous brands was a common way adopted by Chinese enterprises to “go out,” but Haier has been preserving in developing the “Haier” brand globally in the face of difficulties.

In the Internet era, brands are more of platforms. Like many E-commerce platforms, they provide consumers with more choices while incurring integrity issues. These E-commerce platforms are only used for transactions and their development relies more on user traffic.

However, the IOT era features community economies and shared economies. Competition between brands will gradually shift toward eco-construction. Haier is the first to propose building eco-brands in the IOT era across the world. Haier believes that user needs will be more personalized in the IOT era and all digital technologies should be developed to satisfy personalized user experience.

Most importantly, personalized user needs are not isolated, superficial information, but can be used to map out the entire “network of needs” hidden behind, which is constantly changing. Therefore, the personalized service solutions provided by Haier will not be isolated and fixed. They will keep rebuilding the entire ecosystem for the user in a dynamic manner to meet all the needs indicated on the network through making continuous efforts to dig user needs. The ecosystem will be replaced and upgraded constantly to realize common appreciation for the ecosystem.

Eco-brands are not about price transactions, but about value interaction.

The basis of ecosystem brands is value interaction rather than price transactions, and this kind of interaction is constantly upgraded. For users, interaction is different from transactions. A transaction represents a business relationship and it ends when the commodity is sold. However, interaction means “communication with warmth,” which requires understanding and digging user needs and providing users with personalized products and services they need.

E-commerce platforms, to a larger extent, are serving as trading platforms. Though online, they still reflect the traditional business relationship. They only generate transaction data rather than interacting with users.

Zhang Ruimin, chairman of the board and CEO of Haier Group, pointed out that Haier should shift its focus on the product life cycle to the service life cycle. With the popularization of IOT technology, products will only be one of the carriers for eco-services, and the lasting user experience provided by the IOT eco-systems built for users will become the core.

Eco-brands are not a zero-sum game, but co-creation & win-win.

Another important feature of eco-brands is co-creation & win-win. All the participants of an eco-brand will be able to share its value and continue to participate in the subsequent ecological co-creation. Value sharing encourages participants to keep creating value for users together, which promotes sustainable development for the eco-brand.

Traditionally, it is often the brand that gains profits in the market; in the Internet era, users can obtain more information, but the possibility of buying fake products is greatly increased and enterprises doing business on e-commerce platforms are very easy to fall into a price war. E-commerce platforms, enterprises and users are playing games against each other. It can be predicted that this unbalanced state of development will eventually be subverted and only win-win ecosystems can be sustained.

The network of needs acquired by Haier via interaction will provide significant guidance for all parties in an eco-system, so Haier has gathered abundant resources to build a user-focused eco-brand.

The eco-brand built by Haier is a dynamic and open system featuring co-creation & win-win. User needs keep changing and so do the services. If the user experience standards cannot be met, the service will be eliminated and better resources will be brought into the eco-system. Therefore, eco-brands have a mechanism for self optimization to meet the constantly changing user needs and achieve co-creation & win-win.

The soil for eco-brands is RenDanHeYi instead of the traditional hierarchical system.

The acquisition of user needs by eco-brands is supported by the IOT management model. The traditional management model cannot provide conditions for zero-distance interaction between enterprises and users.

Even in the Internet era, many Internet companies are only involved in Internet technology, but they are still organized by the traditional hierarchical management model. Customer-centered concept advocated by brand based on the traditional management model only means being friendly to the user during the single service process and the service only acts as a complementary to the product. However, eco-brands focus on the concept based on user experience during the whole process which starts from product and service design.

“RenDanHeYi” is a management model that Haier needs to become the first eco-brand in the IOT era. Using “RenDanHeYi,” Haier has strategically transformed itself from a closed enterprise into an open eco-platform, subverted the traditional theory about scale and scope and built a long-lasting service eco-system focusing on constantly changing user needs, which will eventually lead to co-creation & win-win for the eco-brand.

From the perspective of organization, Haier has transformed itself from a pyramid to a network in which each employee serves as a node. Each parallel node can be in direct contact with users, which provides an organizational guarantee for the ecosystem brands to acquire user needs by interacting with them and realize the situation that “the organization revolves around users” and that “everyone is able to create user experience.”

Additionally, Haier has changed its salary system from being paid by the enterprise to being paid by users. The system matches the user value created by each employee with their own income, effectively motivates employees to focus on user needs and actively explore the network of user needs, and promotes the formation of the network for the cosystem brands.

In the past, it was the scale and scope that determined whether an enterprise could win the brand competition. In the future, the brand competition will focus on the construction of eco-systems. Truly strong eco-brands must be those with powerful and long-lasting eco-systems.