Industrial Equipment / RoboticsChina
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JOURNEY · DETAIL
He Xiangjian of Midea: From Fan Workshop to Home Appliance Giant, Acquiring Kuka and Empowering Professional Managers
Founded: He Xiangjian · Midea Group Co., Ltd.
JOURNEY
Key Fields
FIELD STAMPSIndustryIndustrial Equipment / Robotics
RegionChina
ScaleGiant
ChannelOffline
Origin
In 1968, He Xiangjian in Beijiao, Shunde, Guangdong, pooled about 5,000 RMB and led 23 villagers to start a small workshop producing plastic and medicinal bottle caps, struggling to survive in the cracks of a planned economy. In 1980, he seized an order for electric fans to cut into home appliances, and in 1981, he registered the Midea brand, driven by the hunger of urban and rural residents for durable consumer goods in the early reform and opening-up period to make affordable appliances for ordinary people.
Milestones
1968
Inception Turning Point
In 1968, He Xiangjian pooled about 5,000 RMB and united 23 Beijiao villagers in Shunde to found the Beijie Plastic Production Team, making plastic and medicinal bottle caps. He ran business operations by day and guarded machines by night. This was the origin of his business, and such a low starting point is rare among later Chinese tycoons.
1980
Transition to Appliances Turning Point
In 1980, the workshop received its first electric fan order. He Xiangjian decisively shifted from metal processing to home appliance manufacturing. In 1981, he registered the Midea trademark, subsequently breaking into the air conditioning field and becoming one of the earliest domestic air conditioning manufacturers. This step successfully bet on the 30-year golden cycle of white goods.
1993
Going Public PMF
In 1993, Midea Electric was listed on the Shenzhen Stock Exchange, becoming the first township enterprise in China to restructure and list as a joint-stock company. He Xiangjian leveraged this to gain capital market ammunition, paving the institutional foundation for future business division reforms and equity incentives.
1997
Crisis & Reform Failure
In 1997, Midea's air conditioner sales fell to seventh in the industry. Severe internal friction from multi-head management brought the company to the brink of crisis. He Xiangjian made the painful decision to implement the business division reform, cutting centralized control and establishing independent accounting by product division. Revenue stopped falling and rebounded that year, and this organizational self-revolution saved Midea.
2012
Succession Turning Point
In 2012, 70-year-old He Xiangjian handed the chairman's position to 45-year-old Fang Hongbo—an internal editor by background—rather than his own children. Midea Group became a rare non-family succession case among Chinese enterprises with hundreds of billions in revenue. The following year, Midea Group went public as a whole, and Fang Hongbo subsequently launched three major strategies: product leadership, efficiency drive, and global operations.
2017
Cross-Border M&A Turning Point
In 2017, Midea completed a tender offer to acquire Kuka, one of the world's four major industrial robotics giants in Germany, for about 29.2 billion RMB, raising its stake to about 95%. This was one of the largest acquisitions of European high-end manufacturing by a Chinese company. Midea thus announced its transformation from a home appliance company into a technology group, but Kuka's subsequent years of sluggish profits sparked huge doubts.
2022
Integration Pains Failure
After being acquired, Kuka experienced declining orders, turmoil among German management, and geopolitical review pressures from the US, China, and Europe. Midea completed the privatization and delisting of its remaining shares for about 1.5 billion RMB, delisting Kuka from the Frankfurt Stock Exchange. Critics argued that Midea spent a heavy price on a continuously slimming asset, and the robotics business failed to prop up a second growth curve. This phase lasted from 2022 to 2024.
2024
Breakthrough Growth
Midea Group's revenue surpassed 400 billion RMB in 2024 and completed a secondary listing on the Hong Kong Stock Exchange, raising over 27 billion HKD. The robotics and automation business returned to growth after reducing costs with the help of China's local supply chain. By 2026, Midea's robot shipments ranked among the top four globally, and Kuka's localization rate in China increased significantly. The 8-year layout finally saw a breakthrough, lasting from 2024 to 2026.
Turning Points
- In 1980, shifted from plastic bottle caps to electric fans and air conditioners, accurately betting on the 30-year golden age of white goods.
- In 1997, the business division reform transformed a centralized company on the verge of internal friction into a decentralized operating entity.
- In 2012, handed over leadership to Fang Hongbo instead of his children, initiating China's largest-scale de-familiarized governance experiment.
- In 2017, swallowed Kuka whole, forcibly steering the home appliance company onto the track of a technology group.
- From 2022 to 2024, fully privatized Kuka, absorbing integration pains in exchange for a domestic robot localization solution.
Failures & Pitfalls
- In 1997, air conditioner sales dropped to seventh in the industry, and multi-head management led the company to the brink of loss of control, forcing a drastic organizational revolution.
- For several years after acquiring Kuka, its profits remained sluggish and German senior executives resigned one after another; the 29.2 billion RMB transaction was long questioned as an overpayment.
- Kuka's privatization and delisting acknowledged a failure in public market integration, and Midea spent an additional ~1.5 billion RMB to wrap up the initial premium acquisition.
- None of He Xiangjian's three children entered Midea for succession, leading to a complete separation of family capital and family management, with external speculation lingering for years over the awkwardness of a hundred-billion fortune with no one to inherit it.
关键成功要素
- Having an extremely low starting point yet refusing to cling to the status quo: after making a first pot of gold from bottle caps, immediately migrated to the larger home appliance market.
- Combating the founder's personal authority through business divisions and the institutional devolution of power—reforming the organization before talking about growth.
- Choosing an internal professional manager who had grown within the company for 20 years, Fang Hongbo, rather than blood relatives, to ensure strategic continuity.
- Buying tickets to industrial technology through multi-billion acquisitions when cash flow was most abundant, and enduring 8 years of Kuka integration pains.
- Relying on China's supply chain for cost reduction and localized orders in the robotics business, rather than counting on the German team to revive on the spot.
Lessons
- Enterprises born from small workshops must proactively revolutionize their product tracks and organizational structures every decade to survive cycles.
- The biggest risk for a family business is not choosing the wrong business, but refusing to hand over power to professionals more capable than one's children.
- Buying a ticket for cross-border technology M&A is easy, but digestion is hard. 8 years of losses and privatization are real integration costs that must be budgeted beforehand.
- The second curve must be grafted onto local supply chains and local markets; German technology plus Chinese manufacturing is the true recipe for Kuka's turnaround.
- Being prepared for danger in times of peace must be grounded in institutions; Midea's 1997 reform proved that organizational illness is more fatal than market decline.
Core Data
- 2024 Group Revenue：4091 billion RMB (public data baseline, independent verification pending)
- 2024 HKEX Fundraising：Over 27 billion HKD (public data baseline, independent verification pending)
- Total Kuka Acquisition Amount：Approx. 29.2 billion RMB (public data baseline, independent verification pending)
- Kuka Privatization Final Payment：Approx. 1.5 billion RMB (public data baseline, independent verification pending)
- 2023 Net Profit Attributable to Parent：337 billion RMB (public data baseline, independent verification pending)
- 2026 Robot Shipment Ranking：Top four globally (public data baseline, independent verification pending)
- Fang Hongbo Succession Year：2012 (public data baseline)
Competitors / Peers
In the main battlefield of white goods, Midea forms a tripartite standoff with Gree Electric and Haier Smart Home. Gree relies on single air conditioning products and channel channel-loading; Haier pursues high-end and overseas independent brands; Midea leads in revenue scale through a multi-category plus digital distribution T+3 model. In the robotics second curve, Kuka benchmarks against the Big Four (Fanuc, Yaskawa, ABB) while facing pressure in China from low-priced shocks by domestic rising stars like Estun and Inovance. Amid the humanoid robot boom in 2026, it also faces cross-industry competition from new entrants like Unitree. Midea's winning edge lies in supply chain cost reduction and the continuous cash flow transfusion from its home appliance business.
Sources
- https://finance.sina.com.cn/tech/roll/2026-06-09/doc-iniavmyr1716777.shtml
- https://news.qq.com/rain/a/20260214A05ZHG00
- https://cymima.com/story/295.html
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- https://www.36kr.com/p/2015453858694152
- https://www.jiemian.com/article/1272737.html
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