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Haier grows its intl business as a leader in industrial internet

By Xie Chuanjiao | (chinadaily.com.cn) | 2021-03-09

For the fifth consecutive year, Zhou Yunjie, president of a world-leading provider of solutions to a better life and home appliance giant Haier Group and a deputy to the National People's Congress, brought forward a proposal to promote China's industrial internet system at the two sessions - the annual meetings of the country's top legislative and advisory bodies. This year's two sessions started on Thursday.

"Building an industrial internet system with Chinese characteristics to promote the high-quality growth of the real economy will have an all-around revolutionary influence on the future of the country's industrial development," Zhou said.

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Zhou Yunjie, president of Haier Group [Photo provided to chinadaily.com.cn]

As many developed economies race to develop their industrial internet in the latest round of the fourth industrial revolution, China has paid increasing attention. The field has witnessed robust growth with enhanced infrastructure and innovative business models taking shape over the past three years.

The Chinese industrial internet is expected to experience faster growth in the near future, thanks to a three-year development plan recently revealed by the Ministry of Industry and Information Technology.

Globally, it is widely acknowledged that Predix, developed by General Electric in the United States, and MindSphere, by Siemens in Germany, represent the top level of industrial internet development. The former uses new-generation information technologies to empower manufacturing in a top-down approach, while the latter gives full play to Germany's advanced high-end manufacturing and focuses on a bottom-up optimization of the production process.

"Industrial internet is the second half of the internet competition," Zhou said.

He believed that China, as both a global major manufacturer and an internet powerhouse, must develop its own industrial internet system featuring interaction and integration with the consumer internet - one that is driven by its users.

China is the only country in the world that ticks all 41 industrial categories under the United Nations' industrial classification standard, with abundant application scenarios. Those advantages grant China unique benefits in developing industrial internet systems, Zhou said. 

However, new challenges have emerged, including the uneven development levels of Chinese companies and the conflict between differentiated needs and limited supply capacity of current industrial internet systems.

To tackle these challenges, it is necessary to meet the various needs of small and medium-sized enterprises, which account for 90 percent of China's total number of companies and represent more than 60 percent of GDP, 70 percent of innovative technologies and 80 percent of urban employment. 

"Empowering the SMEs so that they stay active and dynamic is the key to building the industrial internet system with Chinese characteristics," Zhou said.

Haier started experimenting with its industrial internet system in 2012. In 2017, it unveiled the COSMOPlat system, a user-centered industrial internet platform that allows user to participate, interact and customize solutions throughout the entire process.

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COSMOPlat is an industrial internet platform developed by Qingdao-based household appliance manufacturer Haier. [Photo for CHINA DAILY]

The platform is the first of its kind in the world. COSMOPlat has topped the list of leading domestic cross-industry and cross-domain industrial internet platforms by the Ministry of Industry and Information Technology for two consecutive years. 

As an ecosystem "jointly built by large companies and shared by small companies", COSMOPlat offers one-stop differentiated and targeted solutions to a variety of companies.

Recreational vehicle maker Comparks used to run on the original equipment manufacturer model for Australian RV dealers. The company arranged its production solely based on orders from the dealers. As a result, it struggled to make profit because it did not understand the true needs of customers. 

But thanks to its partnership with COSMOPlat, the company now answers directly to clients and produces customized products, which has resulted in 63 percent of product premium, 62 percent more orders and 7.2 percent reduction in costs compared with the past.

Empowered by COSMOPlat, it has expanded its RV business overseas, and started to build smart RV industrial parks in Northeast Asia.

Qingdao Choho Industrial, a domestic leader in the chain drive industry, established a partnership with COSMOPlat in May 2020 to acquire a package of digital and intelligent transformation solutions that cover design, production, logistics, sales, services and human resources, integrating data from different segments with upgraded management and analysis.

Nan'an in Quanzhou city, Fujian province, is known for its stone industry. Companies in the business used to compete individually in the market. COSMOPlat helped the local industrial park rebuild the industrial chain from design and material selection as part of modernizing the traditional industry. 

So far, COSMOPlat has tapped into 15 sectors and expanded to 20 overseas countries and regions. All the platforms are open to SMEs to help them improve product quality, cut costs and improve efficiency.

"An industrial internet system with Chinese characteristics means a system that creates and carries value, which is delivered in various industrial equipment and shared by various industrial software," Zhou said. "The ultimate goal is to modernize the entire industrial chain and boost high-quality growth of the real economy­.­"

Since the industrial internet concept was first put forward by GE in 2012, the US, Europe, China and the Asia-Pacific region have been key areas for its development. There are about 600 industrial internet platforms worldwide, 500 of which are based in China. Apart from the cross-sectoral industrial internet platforms, more Chinese platforms are focused on specific businesses or segments.

In his proposal at the two sessions this year, Zhou called for open-source industrial alliances on the basis of enhanced internet and data security, to encourage fundamental innovation and improve the capacity of platforms.

He also suggested that Chinese companies test their industrial internet models at their own overseas operations before promoting them on a large scale to overseas companies. COSMOPlat has been a success at many of Haier's overseas arms, such as GE Appliances in the US, Candy in Italy, Fisher & Paykel in New Zealand and Aqua in Japan. These brands achieved double-digit growth last year amid the COVID-19 pandemic that caused an overall recession­.

China entered the global industrial competition as a follower but is now emerging as a leader due to its improving domestic business environment, preferential policies and continuous building of the industrial internet system.

As an industrial internet frontrunner, COSMOPlat has been assigned by the three major international standardization organizations - IEE, IEC and ISO - to lead the formulation of international standards of mass customization solutions.

Last year, invited by the European Union, COSMOPlat became a partner of the GAIA-X initiative, a cloud project aiming to enhance Europe's digital sovereignty, the first industrial internet platform outside the EU to be integrated in Europe's data and cloud infrastructure.

"Industrial internet means a new round of development opportunities for China," Zhou said, "with the help of industrial internet, many hidden champions will emerge across numerous segments in China." He expected that China will sharpen its global competitive edge in diversified competition during the next three to five years, and contribute a "Chinese model" that features mutual benefits to the world's industrial transformation.