For fridge and TVs maker, sales figures are good viewing
The Chinese consumer electronics brand Hisense is making a splash in Britain with a diverse range of products.
“The UK market has a consumer population who are very aware of high technology, new technology and prefer shopping online,” said Louis Hou, managing director of Hisense UK Ltd.
“They have a good and open attitude towards new brands, which as a new brand, is great for us.”
In the UK, the company’s revenue grew from 8.5 million pounds ($12.4 million) in 2013 to about 30 million pounds last year.
“We are growing fast because we have great products and an understanding of the needs of customers in the UK market,” said Hou.
Hisense grew out of Qingdao No 2 Radio Factory, founded by the government in 1969. It established a globalization strategy in 2006, and has built 16 overseas companies in North America, Europe, Australia, Africa, the Middle East and Southeast Asia.
In 2014 its overseas sales revenue reached $2.6 billion. Hisense household electronic products have been sold in more than 130 countries and regions, and Hisense-branded products have been sold in more than 80 countries around the world.
“Our strategy is that we first bring into the UK market premium, high-end refrigerators, and secondly we bring in more fancy products that suit the lifestyle of the UK consumers,” Hou said.
Following the company’s refrigerators, the product that generates the second-largest revenue for Hisense in the UK is televisions, and this year the company added the latest 4K TV to its product range, ultrahigh definition TVs.
“We are globally the third largest producers of 4K TV, just after Samsung and LG,” Hou said.
“We believe our quality for the midmarket segment is the same as theirs but we provide better value for money.”
Hisense 4K TVs, which retail for between 399 pounds and 2,199 pounds in the UK, have received good market reviews. The most expensive model is the Hisense 65-inch 4K TV.
The Hisense 4K TV uses the technology of Ultra LED, which uses direct LED lighting where the lights are placed directly behind the screen.
John Archer, a writer for the online electronics review Trusted Reviews, said the Hisense TV screen delivers “genuine picture quality”, as its pictures are sharp and detailed.
“Hisense clearly has the potential to succeed where many manufacturers have failed in trying to secure a significant foothold in the UK market.”
Hou said Hisense’s international expansion is a good example of a three- stage model of expansion that many Chinese white goods products share.
The first stage of expansion is producing as an original equipment manufacturer (OEM) for Western brands, the second is selling its own branded products overseas through partnerships with local distribution partners, and the third is to manage branding and sales overseas itself, he said.
Hisense reached the third stage in 2009 when it restructured its European business, focusing on setting up subsidiaries to market Hisensebranded products.
This restructuring has led to the setting up of subsidiaries in Italy, Germany and Spain, followed by the UK in 2012 and now France.
In the UK, Hisense entered the market by launching a mid- to high-end refrigerator under the Hisense brand and by maintaining entrylevel product sales by using the sub-brand Fridgemaster, which Hisense acquired from a former UK distributor.
Hisense had been producing OEM products under the Fridgemaster brand for a decade. Obtaining the brand gave Hisense instant access to a sales network and therefore continued sales volume.
“After the acquisition, we realized it is a good business decision because we were able to grow the business much faster than if we had grown organically and started from zero,” Hou said.
The acquisition has given Hisense a base in Leeds, in the north of England. The company is among the Chinese businesses that are increasingly basing their operations in the UK outside London.
Hisense’s European headquarters is in Germany, where much of the research and development for its European products is done, especially for TVs and refrigerators.