Breaking the situation and layout: China's household appliances go global
China household appliances are continuously recognized by overseas consumers in terms of quality, intelligence, environmental protection effect and localization adaptability.
On July 17th, the National Bureau of Statistics released the "half-year report card" of China's economy. In the first half of this year, China's gross domestic product (GDP) increased by 5.5% year-on-year. As one of the "Troika" driving economic growth, the export volume reached 11,458.8 billion yuan, up by 3.7% year-on-year.
This time, China's home appliance industry also handed over the "half-year report card". Statistics from the General Administration of Customs show that from January to June, China exported 1,728.931 million household appliances, up 1.4% year-on-year, and the export value was 296.7 billion yuan, up 5.2% year-on-year.
Throughout July, many countries in the northern hemisphere were experiencing record-breaking high temperatures. An air-conditioning manufacturer in Ningbo, Zhejiang Province, produced and delivered overseas orders before June last year, but this year's orders have been scheduled to the end of August. China household appliances are continuously recognized by overseas consumers in terms of quality, intelligence, environmental protection effect and localization adaptability.
In the past 40 years since the reform and opening up, the relationship between China's household appliances and "foreign household appliances" has undergone great changes from following and imitating to catching up. At the beginning, the "three big things" that China people bought for marriage-color TV sets, refrigerators and washing machines-have also changed from "foreign brands" to smart domestic products.
Based on the global break-up and layout, China household appliances have become a shining business card in the world market.
Meeting the localization demand is the first step.
At one time, China was a market for more than 1,000 home appliance companies in the world to compete for layout; Today, China's household appliances are sold all over the world, and production bases have been built in Asia, South America and other places.
Under the background that European, American, Japanese and Korean giants have occupied the global home appliance market for a long time, China's road to the sea has never been smooth, and the first step is to find a breakthrough to wedge into the market and produce products that meet local consumption needs and habits.
For example, when entering the Southeast Asian market, Haier's field research found that in some countries in Southeast Asia, most Japanese and Korean brands have a long iteration period in local products, and they also lack products specially developed for local needs. Building products with more practical value based on the needs of local users has become Haier's way to break the ice.
In Southeast Asia, the climate is hot, air conditioners are frequently used, and the high maintenance cost makes many consumers feel distressed. To this end, Haier has introduced air conditioners with self-cleaning and sterilization functions, which meet the cleaning needs of users with differentiated products and effectively reduce their cleaning costs.
Pushing product iteration according to users' needs, Haier has gradually completed the transformation of products, markets and supply chains, realized the serialization and high-end of products, and greatly improved the efficiency of production and management. Take Thailand as an example. In the five years since 2017, Haier's local air conditioning capacity has doubled to 2 million units.
For Hisense, "making products localized overseas" is an important way for brands to break through tight encirclement in different countries, build consumer confidence and win goodwill. Pang Jing, deputy general manager of Hisense's brand management department, said, "The general managers of all overseas companies of Hisense should understand the feedback of customers, consumers, partners and authoritative evaluators on products and apply the results to product design and research and development. For example, in South Africa, Hisense developed a refrigerator with the help of a local R&D center. In Europe and America, R&D personnel have developed refrigerators with sharp edges and deeper thickness according to the physical characteristics of local people. In the Japanese market, researchers found that consumers like to put steamed rice in the refrigerator while it is hot, and the refrigerator with fast refrigeration will be more popular. "
Gree relies on self-developed technology to meet the diverse needs of consumers around the world. For example, a three-cylinder two-stage variable displacement compressor that can still heat stably at the ambient temperature of -35℃ has been developed to fight against the cold for consumers in the cold regions of the world; The "Leng Jing Wang+"air conditioner is introduced, which can still stably refrigerate at a high temperature of 65℃, so as to cool off the heat in hot areas around the world; The world's first "zero electricity fee" photovoltaic air conditioner meets the global demand for green and sustainable development. At present, Gree has won world recognition by relying on its independent research and development technology and quality management system, serving more than 180 countries and regions around the world.
It's a story that China's home appliance enterprises have a firm foothold in Japan, a traditional home appliance country. It not only proves the ability and wisdom of China's home appliance enterprises to break through, but also reflects the importance of the home appliance industry in adapting to the local market and tapping the local demand.
The reporter of Global magazine learned that China's home appliance enterprises, such as Hisense and TCL, broke through in Japan mainly by virtue of their vertical industrial chain and economies of scale, and with the joint blessing of technology research and development and quality improvement, they provided high-quality products to the market at reasonable prices. However, in the process of breaking the market, we still have to face the uncertainty risk of the market. Affected by the popularity of smart phones, the TV market is shrinking in recent years. How to survive in the shrinking market is a major challenge for enterprises.
According to the latest data released by JEITA, the supply of LCD TVs in the Japanese market from January to June 2023 was 2.129 million units, down 12.2% year-on-year, which was the lowest value in the first half of 2001. JEITA predicts that the demand for TV in Japan will decrease by 5.2% in 2023 compared with the previous year, reaching about 4.838 million sets.
In this case, China household appliance enterprises continue to strengthen technical input to enhance the consumer viewing experience and tap the irreplaceable "TV value" such as smart phones. The compression of procurement and manufacturing costs allows more funds to be allocated to video control and the development of additional functions. In 2022, REGZA, a TV brand owned by Hisense Group, was equipped with the latest generation of image quality chip REGZA ZRα, which reflected the sense of distance of scenery and the realism of characters' skin color. At the International Consumer Electronics Show (CES) in Las Vegas in 2023, Toshiba TV, a subsidiary of Hisense, released a millimeter-wave radar that can automatically adjust the image quality and sound quality according to the audience's position and enhance the user's presence.
TCL also attaches great importance to the research and development of next-generation products, and its latest LCD TV "98C955" is a TV featuring game operation mode. Not long ago, Huaxing Optoelectronics (CSOT), a liquid crystal manufacturer under TCL Technology Group, signed a cross-licensing agreement with Japan Display (JDI) for interoperability of intellectual property rights. JDI has advanced technology to present high-quality LCD images from different perspectives.
Foreign investment under the new internationalization strategy
In recent ten years, China's home appliance industry is transforming from a trade-oriented model that relies solely on exports to a new international strategy, and the status of China's home appliance brands in the international market has been qualitatively improved. China's home appliance enterprises have increased their foreign investment and mergers, and core enterprises have begun to make large-scale overseas production, research and development and brand layout, so as to promote the global brand strategy. This trend is particularly prominent in the process of China's household appliances entering the markets of developed economies.
For example, the TV brand REGZA mentioned above was originally a brand of Toshiba TV in Japan and was acquired by Hisense Group in 2018. Japanese research company BCN recently released the sales share data of LCD TV in the first half of 2023. REGZA's market share in HDTV category above 4K is 25.5%, ranking first for the first time. REGZA's share in the category below 4K was 24.9%, which kept the first place for three consecutive years. In 2022, REGZA and Hisense's other two brands together accounted for more than 40% of the flat-panel TV market below 4K in Japan. In addition, in 2019, Hisense also acquired the Japanese Sanpower Company, which produces automobile air conditioners, and gradually set foot in the automobile industry.
As a small developed economy, New Zealand's home appliance market has been divided up by Europe, America, Japan and South Korea for a long time. China's home appliances have tried many times in New Zealand, but it was not very successful until Haier's "buying the market with capital" was a great success in the white goods market.
Haier has a "three-step" strategy in overseas markets: going out, going in and going up. Haier has not made the strategic layout of the whole industrial chain, so it can't gain greater scale and cost advantages from the industrial chain. Therefore, products and brands have become the two fulcrums that Haier must strengthen, especially in overseas markets. Another reality that Haier must face is that the development of independent brands is very difficult. After years of trying, Haier realized that relying solely on manufacturing capacity or technology is not enough to help it build a brand overseas. A more effective way is to directly acquire a strong brand. Under the situation that the brand premium in China is generally low, it is a shortcut to enhance Haier's brand premium to acquire international brands and their mature product technologies. Haier made a strategic decision to acquire Fisher & Paykel Company in New Zealand.
As the oldest home appliance enterprise in Oceania, Fisher & Paykel mainly produces kitchen appliances, refrigerators, washing machines and dishwashers. Most New Zealand families have a Fisher & Paykel drawer dishwasher. Fisher & Paykel also has refrigerator compressor technology that can improve the energy saving rate by more than 30%. According to public information, Fisher & Paykel has a market share of 55% in New Zealand and 18% in Australia. Its income in the European and American markets has accounted for 26% of the company's total income.
After the acquisition was completed in 2012, after years of integration, it finally blossomed. First of all, the key technologies of Fisher & Paykel's multi-temperature mode drawer refrigerator and double-deck drawer dishwasher have benefited Haier a lot. Secondly, through Fisher Paykel's sales network, Haier can further expand into the Australian and New Zealand markets. According to the data in 2022, Haier and Fisher & Paykel ranked first in the white goods market in Oceania, among which the market share of washing machines and refrigerators ranked first.
In Vietnam, where the population exceeds 100 million and the market potential and vitality are attracting multinational enterprises, China's home appliance brands have a similar story. Zhang Shoujiang, general manager of AQUA Vietnam Electric Appliance Co., Ltd. told Global magazine that AQUA Electric Appliance has a long history of development in Vietnam. Its predecessor was a factory established in Vietnam by Sanyo Electric Appliance Co., Ltd. in Japan in 1996. After becoming a member of Haier Global Matrix in April 2012, it was renamed AQUA Vietnam Electric Appliance Co., Ltd.
Joining Haier is a major turning point for Vietnam AQUA. With the platform resources of Haier Group, Vietnam AQUA has achieved better and faster growth, and the Vietnamese market has become one of the main strategic markets for Haier's global strategic deployment. According to the trinity strategic layout of "localized R&D, localized manufacturing and localized marketing", AQUA continues to accelerate local operations and cultural integration, and the share of refrigerators and washing machines ranks among the top in the Vietnamese market.
After more than 20 years of development, AQUA's position in the Vietnamese market has become more and more stable. By the end of 2022, 15 million families in Vietnam used AQUA brand or products made by AQUA, serving more than half of families in Vietnam.
Brand diversification marketing strategy
With the continuous innovation of Internet technology, in order to meet the needs of young consumers who are more personalized and more interactive, China home appliance enterprises are trying more and more diversified marketing models.
In the list of "the most admired companies in the world" published by Fortune magazine in 2023, Haier Zhijia ranked first in the global home appliance industry. Haier Zhijia uses TikTok to carry out innovative brand marketing in order to break the monopoly of Japanese and Korean brands in the Southeast Asian market and win over local consumers.
Haier has noticed that in Southeast Asian countries, some older consumers have formed inherent consumption cognition, while young consumers have higher acceptance of new product iterations, which is the key for brands to further improve market penetration. In Haier's view, TikTok has a fast pace of content update, a large volume of content and rich platform resources. At the same time, with multi-interactive gameplay, TikTok can help Haier reach the target users more efficiently. Through a series of marketing games such as brand challenge and talent cooperation on TikTok, Haier can more effectively make Southeast Asian consumers interested in its brand.
Skyworth Group is one of the first smart home appliances and information technology enterprises in China to deploy overseas markets. Its overseas business has standardized the whole process of localized staffing, supply chain, manufacturing, testing and quality control, sales and supply, and after-sales service, forming a global controllable professional service capability.
By 2022, Skyworth has entered the telecom and integrated operator markets in India, Asia-Pacific, Africa, Latin America and Europe. In terms of marketing, Skyworth not only regularly develops chain stores, agents and e-commerce channels, but also cooperates with new retail channels by holding new product launches, new product promotion and tour exhibitions, live broadcast and delivery, etc., so as to promote products to reach more places around the world.
Hisense's "sports marketing" strategy not only won its popularity, but also opened the way for product upgrading and innovation and development.
In 2022, Hisense made its second appearance in the football World Cup and sponsored the world's top sports events for the fourth time since 2016. Before that, Hisense went through eight years of "new recruits testing the water" in sports marketing. From naming the Australian Open Stadium to sponsoring the Australian Open, and then becoming a senior partner of American F1 Red Bull Racing Team, nascar racing and Bundesliga Schalke 04, this series of sports sponsorship activities made Hisense realize that sports events are a universal language and communication method in the world, and also a direct, simple and efficient communication method between corporate brands and consumers.
Hisense Japan Company, on the one hand, uses the group's sponsorship rights for top-level events such as the World Cup to promote its brand in Japan, and at the same time, it also invests in local sports marketing in Japan. Since this year, it has become the official sponsor of the club "Yokohama DeNA Bay Star" ranked second in Japan's professional baseball league (Central League).
It is understood that Hisense Japan Company plans to launch a series of online and offline sports marketing activities around sponsorship, such as advertisement exposure, online celebrity fans supporting competitions, Hisense title competition day, etc., and invite club players to participate in corporate social responsibility activities, so as to combine sports marketing with corporate social responsibility activities, narrow the distance between brands and local consumers, establish a friendly and effective brand image, and take an important step to upgrade the brand strategy based on localized long-term business objectives.
The world's top competitions have solved the problem of explaining "who is Hisense" to customers and consumers in strange countries. The data shows that from 2016 to 2021, Hisense's global popularity increased from 37% to 59%. As early as 2006, Hisense had determined the strategy of "future development, big head overseas", and gave up OEM production earlier in the industry, but made its own brand "shipbuilding to the sea". With Hisense's continuous strengthening of sports marketing, while enhancing brand awareness and influence, it is also strengthening product and technological innovation. The Financial Times, a well-known British financial media, said: "Hisense's global influence is one of the main driving forces of its innovation. Today, Hisense's products have entered large shopping malls in Japan, the United States and Europe. "
At present, Hisense has set up 23 R&D centers and 31 production bases around the world, and plans to set up nearly 100 flagship stores of high-end brands around the world. By using every contact with consumers, digital transformation will drive advanced manufacturing to be intelligent and high-end, and China's high-end manufacturing will be displayed in the global market.
When Lin Lan, Chairman of Hisense Group, met with infantino, President of FIFA, infantino said bluntly that the criteria for FIFA to choose the sponsors of the event is by no means to choose whoever pays more money, but to seek a "real brand" enterprise-this enterprise not only invests in sports marketing and other aspects, but also continues to invest in technology and product innovation to truly become a brand and see results.
Judging from the development in recent years, many overseas brands have passed the primary stage of "overseas survival" and are in a new stage of growing into international brands. Enterprises generally shift from focusing on building products to giving consideration to both products and brands, and are not eager to "make quick money", but actively enhance social contributions and practice the win-win concept to enhance the long-term sustainable development momentum of brands.
Li Wenli, president of Hisense Japan, said that Hisense has developed in the Japanese market for 10 years and has received the support and love of consumers and businesses. Hisense is actively implementing social concepts such as corporate social responsibility and sustainable development goals, such as participating in various activities such as protecting beaches, providing food for single-parent families, and providing TV refrigerators for children's canteens.
Another important manifestation of corporate social value is to become an employer of foreign companies recognized by local employees. Hisense Japan began to employ Japanese fresh graduates in 2015. Although the scale is not very large, there are more than 100 people who register through the job search website every year. An employee who joined the company last year told the Japanese media that it was very important for him to be able to give advice to the president and other management on business. Like other foreign companies, Hisense does not stick to Japan's employment schedule, and the mechanism of recruiting talents all year round is very friendly to job seekers.