Operational Restructuring
By 1998, Haier’s annual revenues had reached RMB 16.8 billion and the firm’s domestic market
shares for refrigerators, washing machines, and air conditioners each exceeded 30%. Haier had much
to celebrate, but the long period of extraordinary growth of consumer demand in China was showing
signs of slowing. Retail consumption for 1997 had grown 11.6% over the previous year, the lowest
increase since 1990. Industry optimists pointed to growing income levels among rural Chinese who accounted for 72% of population, but only about 10% of rural households owned a refrigerator and
20% had a washing machine in 1998.