Today’s guest:

Shinji Katsuhiko, Executive Board Member of Rinnai Corporation, and Managing Director of the Shanghai Rinnai Co., Ltd.

Exploring the Response of the Chinese market to Quality Products

Q: You must have attended various exhibitions. What do you think the significance of the first CIIE is for a foreign-funded enterprise like yours?

A: This is the first time for China to host an exhibition event only for imported brands and products. This is good for foreign-funded brands to introduce their premier imported products into the vast Chinese consumption market to meet the demand of the growing medium to high end consumers.

Against the backdrop of an exhibition that focuses on the local Chinese market, and taking on international qualities, Rinnai can present its mature, premier and comfortable gas appliances, kitchen appliances and bathroom products, researched and developed by Rinnai Group in Japan and the US, to professional Chinese purchasers, professionals, the media and consumers, so that more Chinese users can enjoy the comfortable life brought by the imported goods of Rinnai, and that Rinnai can thereby embrace the opportunity of the Chinese consumption upgrades.

Rinnai entered the Chinese market in 1993. Shanghai is one of the markets that Rinnai water heaters entered earlier. There is therefore a group of loyal users of Rinnai products. When we visited the users this year, we found that a Rinnai water heater was still functioning after 16 years of use.

In 2017, we invested in the Rinnai Industrial Park in the Fengxian District of Shanghai, we invested RMB 1.5 billion in phase one of the project, which has been completed and put into service. It has 6 water heater production lines and 2 cooker production lines.

By participating in the CIIE, we are testing the waters to see which imported products are favored by the audiences. Once the time is right, we will produce them as early as possible in our factory in Shanghai.

Pricing the Products for Medium-to-High End Consumers

Q: Rinnai is a world-famous gas appliance brand that Chinese consumers are familiar with. What new products will you bring to the CIIE? When will these new products enter the households of common Chinese consumers?

A: The theme of Rinnai Group at the exhibition is “to create a comfortable, healthy, environmentally-friendly and convenient lifestyle for consumers”. The main products we will exhibit include a heating system, a domestic hot water system and intelligent kitchen products. At the same time, we will provide systematic, highly efficient, comfortable and environmentally-friendly solutions for the use of domestic heating systems and hot water systems.

As for kitchen products, we will demonstrate the example of our imported Japanese intelligent stove with its original packaging—the Griller. This product makes cooking easier and enables ordinary people to cook cuisines as if they were cooked by chefs. This product can upload and download recipes on apps and enables users to make their own menus. In the process of cooking, it can automatically adjust the temperature through temperature sensors according to the requirements of the menu to prevent the food from being burnt or dried so that the taste and nutrition of the food can be retained.

As an example of heating systems and domestic hot water systems, the Rinnai Hybrid mixed energy system is a mixed energy heating and hot water system that combines gas and heat pumps, realizing the perfect portfolio of gas and air energy. When the amount of water used is small, heat will be mainly provided by an air energy heat pump. When the amount of water used is large or heat is provided, the gas water heater will be turned on to provide additional heat. The primary energy ratio reaches 125%, achieving the best energy-saving effects.

As for other products closely related to the daily life of people, like remotely-controlled cloud intelligent heating stoves, gas clothes dryers, warm water type bathroom heating dryers, etc., we will not go into further details here. We expect to display them at the exhibition in November.

The Griller, the gas clothes dryer, and the cloud intelligent heating stove are already on sale in primary household electric appliances and furniture chain-stores, as well as the exclusive agencies of Rinnai. We will introduce more of our characteristic imported products. In pricing, we will cater to the group pursuing a high quality of life, and fix prices that suit medium-to-high end consumers.

Spirit of the Craftsman Featuring Focus, Not Settling for Second Best, Innovation and Inheritance

Q: China’s household electric appliances manufacturing industry is picking up speed as it seeks to transform and upgrade. Rinnai is an old brand. Can you share some observations on how to build Chinese “Century-Old” household electric appliance brands?

A: Rinnai Group was founded in 1920 by Japanese engineers Hidejiro Naito and Kanekichi Hayashi in Nagoya. In nearly a century, we stay focused on the R&D and manufacture of integrated heating appliances. We made it our mission to “provide a comfortable life for society through heat” and stayed committed to serving our customers with the principle of “Quality is our life”.

For example, in the production departments of Rinnai, there is a requirement for “Zero Defects”, namely, we must make sure not to produce defective products in spare parts processing. The emphasis of most workers on the assembly line is on “quality control”. Regardless of the size of spare parts, they must be screened through different procedures. Only when it is confirmed that there are no defects do the spare parts enter the next procedure. Once an unqualified spare part appears, the whole product will be swiftly isolated. The shared goal of all departments is not to produce or deliver any defective products. From the production of spare parts to assembling, our products go through a lot of tests. Only after gathering 18 stamps of approval can a water heater be packaged and delivered.

Another example is that throughout the process of production, we stick to three “self-manufacturing” principles, namely, we must make the key electronic parts, including the electronic substrate, the combustor and the heat exchanger and sensor ourselves, we must research and develop the combustion core technology of water heaters ourselves, and we must research, develop and manufacture the equipment that manufactures key spare parts.

Based on these enterprise goals and development theories, we have stayed focused, never settling for second best, keeping up our innovation and inheritance of skill, and thus we have achieved the continued and steady growth of our company for nearly 100 years. Our products have been favored by consumers around the world. I think this is the key to the fact that our brand keeps prospering.