For fridge and TVs maker, sales fig­ures are good view­ing

China Daily (Canada) - - ANALYSIS - By CE­CILY LIU

ce­cily.liu@mail. chi­nadai­lyuk.com

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.

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