Following the new air conditioner product release of the first self-owned home appliance brand "Altesha" under the Huitongda network in April this year, in September, the entire refrigerator and washing machine product line was officially announced. Huitongda stated that this not only represents the expansion and upgrade of the "Altesha" brand, but also signifies the important implementation of Huitongda's "production and sales integration" and "self-owned brand" industrial upgrade strategy.
On the last working day before National Day, Huitongda Network (09878), a leading company in the domestic industrial internet sector listed on the Hong Kong stock market, announced a new industry dynamic.
According to Zhitong Finance and Economics APP, following the new air conditioner product release of the first self-owned home appliance brand "Altesha" under the Huitongda network in April this year, in September, the entire refrigerator and washing machine product line was officially announced. Huitongda stated that this not only represents the expansion and upgrade of the "Altesha" brand, but also signifies the important implementation of Huitongda's "production and sales integration" and "self-owned brand" industrial upgrade strategy.
How does the 'industrial platform' upgrade?
It is worth noting that Altesha is far from the complete industrial upgrade of Huitongda.
From the public information in the past year, Huitongda has been concurrently strengthening its efforts in several industry sectors including home appliances, consumer electronics, liquor, and washing industry. Summarizing a few categories, one is the deeper 'integration' with top upstream brands, such as the Home Express Apple O2O authorized store project and the cooperative town stores project with Apple. This enhancement in stickiness between Huitongda, upstream and downstream, as well as platforms has been synchronized. Another aspect is self-research, self-production, and self-sales, which is what Huitongda refers to as 'production and sales integration'. The joint venture between Huitongda and Jiangxi Province Green City Green Innovation Group, and Rong Electric Group to build the Zhonghuida Air Conditioning Intelligent Manufacturing Factory, within just less than a year and a half has grown to have an annual capacity of 1 million units, and has been shortlisted as one of the top enterprises in the industry for the '2024 China HVAC Smart Manufacturing Award'.
Secondly, self-research, self-production, and self-sales, meaning Huitongda's 'production and sales integration'. The air conditioning intelligent manufacturing factory, 'Zhonghuida,' jointly invested and built by Huitongda with Jiangxi Province Green City Green Innovation Group and Rong Electric Group in 2023, has developed in less than a year and a half to have an annual production capacity of 1 million sets and has been shortlisted as one of the top enterprises in the industry for the '2024 China HVAC Smart Manufacturing Award.'
Another aspect is the creation of self-owned brands in multiple sectors by Huitongda, targeting its own strengths in the lower-tier market in combination with the market changes of consumer downgrading and graded consumption in recent years. They have established a series of self-owned brands in air conditioners, refrigerators, home appliances, baijiu, and beauty. Leveraging its network channel advantage in the lower-tier market, Huitongda operates its self-owned brand products with a reverse supply chain model of "b2F" and "custom production based on demand." For example, orders for Altesha air conditioners have exceeded 0.03 million sets since their launch.
"Value amplification behind a succession of events"
From Apple's O2O store authorization to Zhonghuida, the Forbidden City soy sauce baijiu, to Altesha, Akai, and the official announcement to focus on the layout of personal care, household cleaning, beauty, and other industries. Huitongda's consecutive actions in industrial upgrading reflect a deeper understanding and practice of the "industrial internet" platform model and platform value.
At the end of August, through the mid-term performance report, Huitongda conveyed to the market the "three breakthroughs" - deepening of brand cooperation levels, breakthrough in integrated production and sales, and further expansion into new industries and product categories. Subsequently, the company saw growth and improvement in advanced indicators such as gross margin, revenue structure, and store member loyalty.
It is evident that Huitongda's definition of its own "industrial internet" model is no longer limited to the traditional platform of integrating upstream and downstream resources. From the selection of cooperative (or co-created/self-owned) brands to deep involvement in product research, development, design, production, and sales based on B端 demand throughout the entire product chain and process, Huitongda presents a 2.0 version of industrial internet to the market and investors. Combining the development of new qualitative productivity, activation of idle production capacity, and macro policies, the value coverage of the 'new platform' is broader, and the imagination space for future development is greater.
As Huitongda President Xu Xiuxian stated at the 2024 Summer Davos Forum in June, “Huitongda, together with upstream brands, is constructing an innovative supply chain system where products undergo a 'green light' process from research and development, production to sales. Through the improvement of store operation and industrial operation capabilities, they are building an efficient dual-flow circulation channel for urban and rural areas.”
This argument is increasingly confirmed by the "Altesha" brand.
