Ten Years of Home Appliances: From Scale Expansion to Brand Success

In the ten years after China’s accession to the WTO, China’s home appliance industry has not only achieved its local accumulation by completing its own original accumulation, but also accelerated the process of international expansion and actively implemented the “export of products”. "Quality and Technology Export" is the expansion of the core brand influence.

From 200 billion yuan to over one trillion yuan, China’s home appliances experienced a “barbarous growth” over the past 10 years since its accession to the WTO. It has made rapid progress in local scale manufacturing and global processing trade, and has rapidly made China a global household appliance. The strong position of the manufacturing center. At the same time, Haier, Midea, TCL, Skyworth, Galanz and other companies have also grown into global appliance giants.

However, in the eyes of professionals such as government authorities and industry associations, “China’s home appliance industry is not big enough and faces the task of transforming from Chinese manufacturing to Chinese brands. It is the future of China’s home appliance industry to expand its brand and strengthen its core competitiveness. New challenges in 10 years."

Stunning 10 Years: Accelerating the Expansion of Chinese Household Appliances Overseas

At present, of all the household electrical appliances that sell well on the global market, China’s sales of 45 products rank first in the world. Yao Wenping, vice president of the China Chamber of Commerce for Electrical and Mechanical Products, disclosed: “Since joining the WTO in 2001, the total volume of imports and exports of home appliances and electronic information products has increased from US$124.11 billion to US$101.28 billion in 2010, an increase of eight times, and the average annual growth rate is 23% is far ahead of GDP growth and the increase in total imports and exports."

China's accession to the WTO has attracted many foreign-funded enterprises to increase investment in and development of the Chinese market, and has also accelerated the pace of international expansion of domestic home appliance companies in China.

At the same time, the export of home appliance companies has gradually entered the period of integration and development of “strong and strong”. At present, China’s home appliance products have already taken over 70% of the global market supply.

In addition to gaining advantages in market size, Chinese companies have also experienced a new ups and downs in overseas market mergers and acquisitions. Since the beginning of this year, Haier Group has acquired Sanyo's integrated research, production, and sales business in Southeast Asia, which indicates that Haier has fully entered the “global brand” after undergoing the previous brand strategy, diversification strategy, and internationalization strategy. Strategy "developed in the deep water area.

After the purchase of Miraco's Egyptian subsidiary Miraco in 2010, Midea Air-Condition announced again this year that it will invest US$223.3 million in the acquisition of 51% of UTC's subsidiary Carrier Air-Conditioning Air Conditioning Company to occupy the air-conditioning market in Brazil, Argentina and Chile.

Despite encountering difficulties in the integration of the French Thomson color TV business, TDL Group Chairman Li Dongsheng recalled “international mergers and acquisitions” and insisted that “international expansion is the only way for China's home appliance companies. Although TCL has experienced setbacks, it has accumulated valuable experience of going out again to seek stability in overseas markets."

Ten years after its accession to the WTO, China's home appliance internationalization expanded at the fastest pace in 10 years. According to incomplete statistics, Haier, Hisense, TCL, Changhong, Konka, Skyworth, Midea, Chigo, Haier, Chunlan, Gree, Xoceco, Meiling, Oaks and other home appliance companies ranked in the top 20 in overall strength may have been established overseas. Sales companies, or directly establish overseas production bases. At the same time, there are thousands of home appliance companies providing overseas customers with "OEM, ODM" processing trade business.

Jiang Feng, chairman of the China Household Electrical Appliances Association, pointed out: "From the current international economic situation, the shadow of the financial crisis has not yet been dispersed. In fact, the global economy is experiencing a second wave of shocks. The debt crisis in the United States and Europe has made the pace of global economic recovery apparently This is undoubtedly a good time for Chinese home appliance companies that are seeking to manage themselves from the traditional processing and manufacturing trade to independent overseas brands.” Yao Wenping reminded us that if we continue to use traditional products and traditional means, it is difficult to guarantee our competitive advantage. . It is necessary to continuously transform enterprises, improve management, and increase independent innovation so as to seize new opportunities in the international market.

However, how to move from China to a Chinese brand and how to establish the influence of Chinese home appliance brands in the global market has become a new challenge for all Chinese home appliance companies.

Golden Decade: Chinese and Foreign Giants Lay Together

After China's accession to the WTO, Samsung, LG, Panasonic, Sony, Hitachi, Toshiba, A. O. A large number of foreign-owned home appliance companies represented by Smith and Electrolux have taken the lead in setting off an investment boom in China's home appliance market, or establishing global technology research and development centers, or investing in new production bases, or directly changing the previous joint venture into a sole proprietorship.

Unlike Japanese companies in the early 1980s, and the “careful and conservative” investments of European, American, and Korean companies in the first half of the 1990s in China, the "return on investment cycle" of foreign-funded enterprises has now been greatly shortened. The accession to the WTO will undoubtedly bring about a broader market space and business opportunities for China's home appliance industry. In addition, the “high brand awareness, leading technological advantage, and strong capital strength” formed by foreign-invested enterprises in the Chinese market over the years have also become a huge force for their deepening of the Chinese market.

Professor Li Dejun of Anhui University of Technology believes: “The foreign appliances represented by Japan’s Panasonic and Sony not only started the branding and marketization operation in China, but also provided a reference for the growth of many Chinese home appliance giants. In the past 30 years, their actions have affected the development trend of the entire Chinese home appliance industry. In the 10 years after China's accession to the WTO, local household appliance companies with full wings have started to fully catch up with foreign appliances in the Chinese market."

Since the production and sales of the Haier Group broke the one-hundred-thousand billion yuan mark for the first time in 2005, the US-based group has also successfully joined the one-hundred-thousand billion-dollar camp after five years and proposed to launch a comprehensive attack on 200 billion yuan in the next five years. At the same time, the area of ​​home appliance channels shows the pattern of Suning Appliance and Gome's two giants, and the annual sales scale has also exceeded one hundred billion yuan. According to statistics from the China Enterprise News, local companies such as Hisense, Gree, TCL, Changhong, Chigo, Skyworth, and Konka have also targeted the development goals of “100 billion yuan in production and sales”.

Over the past 10 years, China’s home appliance companies have relied on their “localization” advantage to expand their “large-scale manufacturing capabilities”. With flexible end-user promotions, an endless stream of price competition, and improved after- A series of positive contests were launched.

Xu Dongsheng, secretary-general of the China Household Electrical Appliances Association, told the "China Enterprise News" reporter: "The 10 years of accession to the WTO is the golden decade of China's home appliance industry's all-round expansion. We have not only completed the consolidation of the fundamentals of the home appliances industry, but also achieved a price-oriented approach. From the large-scale market to the demand-oriented value-oriented market, especially in the past two years, China's home appliance companies have completed the transition from large-scale low-end markets to high-end markets that have long occupied foreign-invested household appliances."

At present, Japanese-funded enterprises have suffered heavy losses in the home appliance retail market, and they have begun to switch to the upstream market such as key components of the Chinese home appliance industry and the commercial market based on system solutions. The European and American household appliances enterprises in addition to Siemens, A. O. Outside of Smith, Whirlpool, Electrolux, Philips, etc. have all become brand operators in the Chinese market and are responsible for product R&D, production, and sales to their Chinese counterparts. Although South Korea's Samsung and LG appliance households have maintained a strong expansion and leading edge in the global appliance market, they still faced a strong counterattack from local companies in the Chinese market, and they are in a position of passive competition.

China, which has become the world’s largest home appliance and electronic information product market, will not only breed a group of leading companies in the global home appliance market, but will also attract more foreign companies to participate in market competition in various ways. However, in the ten years after its accession to the WTO, China’s home appliance industry has not only relied on “scale manufacturing” to complete its own original accumulation and achieved localization, but also accelerated the process of international expansion and actively implemented products from the “products”. "Export" to "quality technology exports" as the core of the brand's influence.

The Next Decade: Creating a Global Brand from Big to Strong

Although the scale of China’s home appliance market is large, but it is global, whether it is televisions, refrigerators, air conditioners, washing machines, microwave ovens and other traditional home appliances, or mobile phones, computers and other information appliances, in the global market is truly “called out”, “calling "China's home appliance brand is one of the few."

Jiang Feng pointed out: "Over the past 10 years, China's position as a global power producer has long been established. However, the lack of brand influence is still the most important issue facing Chinese home appliance companies. To achieve 'globalization', there must be Brands that can be widely accepted and loved by consumers around the world.” Jiang Feng encouraged domestic home appliance companies: “At the Summer Davos Forum held in Dalian this year, the US Ambassador to China Gary Locke talked about Chinese companies’ strategy of “going out” The mention of Haier reflects the improvement of the international status of Chinese home appliance companies from one aspect."

Yao Wenping also believes that "in the international competition of all industries in China, the home appliance industry is a typical 'unbreakable' area with strong vitality and creativity."

Long Yongtu, the chief negotiator of China's accession to the WTO, once also vividly compared: “The Chinese home appliance industry is a very sturdy child, and it has been hit. Through the development of the past 10 years, the Chinese home appliance industry has become a very sturdy child. The children who are striving for the development. For the development of the next 10 years, he pointed out that in the next few years, the development of the household electrical appliance industry will continue to face increasing pressures from the upstream and dual pressures from the downstream circulation companies, facing a serious export situation, and the development of the household electrical appliance industry will rely more on the domestic market. market. With energy saving, environmental protection, intelligence and safety becoming the theme of home appliance development, the intensification of global competition and the high profitability of high-end products have forced the home appliance industry to increase investment in technology research and development. Independent innovation will become a strategic support point for the development of the home appliance industry.