Turkish delight at China’s fascination
Reflecting some of the settings on its products, multinational home appliance maker Beko is being particularly selective about how it caters to the Chinese market.
Pressing the right buttons to satisfy particular people’s wishes is more important to sales success, it believes, than meeting numerical demand through basic products and prices.
With the continuing rise of Chinese people’s disposable income, Beko and all of its competitors see China as an important battleground in their global marketing strategies.
For Istanbul-based Beko, promoting brand awareness is the top priority in gaining a foothold in this highly competitive market.
Founded in 1955, the white goods manufacturer says it has sold its products to 440 million people worldwide and its products have been sold in more than 100 countries. It sells more than 8.5 million home appliances a year. In Britain alone, Beko had sales revenue of 340 million pounds ($557 million) last year, up from 319 million pounds in 2011. The company had 17 percent of the British white goods market last year.
It is now striving to seize a larger market share in China by offering people a wider variety of smart technologies and user-friendly products, says Ayse Topcu, Beko’s global marketing director.
“We are a growing company and have a great global vision, so we are always searching and looking for opportunities in emerging markets,” Topcu says.
“China is a place we cannot miss, because we regard it as the most important country in emerging markets.”
The company, one of the market leaders in Europe, entered China in 2006. Three years later, it acquired a washing machine factory in Changzhou, Jiangsu province, which can produce 200,000 front- loading washing machines a year, some for export.
“As a multinational company, we are looking at China as the key market to continue our global expansion,” says Beko’s general manager for China, Giulio Ambrosi.
“We have achieved outstanding results in Europe and a variety of other markets within a very short timeframe. Our next logical step is to achieve the same ambitious objectives here in China.
“Our business in China has increased consistently by more than 50 percent a year over the past several years.
“As a percentage of our overall turnover, the China component is still limited, but our long-term expansion plans target growth there at a faster pace than that of the company as a whole.”
He says it is hard work for foreign brands to develop in China. Beko has spent a lot of time in market research to find out about China’s complicated market conditions.
Compared with people in Europe, Ambrosi says, Chinese demand is constantly evolving, which requires domestic appliance and consumer electronics companies to keep abreast of changing trends.
“Each market has its own peculiarities. China is the most dynamic of all, the one where the most change has occurred in recent years and the one where we expect most change to continue to take place.”
In China, Beko faces competition not only from multinational companies but also strong local electrical appliance makers.
Ambrosi says his company needs to greatly promote its brand visibility as well as cultivate its own competitive edge to survive the fierce competition in China.
“We are well aware how overcrowded the Chinese market is and that people are overwhelmed with all sorts of messaging. But we will not pursue market share by lowering prices,” Ambrosi says.
Beko is not an entry-level brand, he says. It is pitched at the mid- to high-end market in China, with target buyers it calls the “smart generation” — people who would like to purchase modern, innovative and environmentally friendly electronic goods.
Taking Chinese habits into consideration, Beko has adapted designs and introduced technological innovations to comply with the latest and most stringent energy standards recently implemented in China.
Last year, one of Beko’s three-door refrigerators was given an “Innovative Product” award by the China Household Electric Appliance Research Institute because of its ability to store rice without preventing the loss of taste.
This year, the same award went to its new line of washing machines in China, the EcoMore Premium series, for having different seasonal washing programs for spring and summer clothing and fall and winter clothing.
In addition to technological innovations, offering quality at much lower prices is also part of the secret of the company’s success in the competitive Chinese market. Many of its high-end products incorporating innovative technologies cost less than 3,000 yuan, which for the majority of people is no doubt attractive when they consider products by the likes of Germany’s Siemens, Japan’s Panasonic and China’s Haier Group.
“We look at the competitive landscape in great detail,” Ambrosi says. “But we are much more focused on our target consumers. We are confident that if we dedicate ourselves to listening to them and continue to care about them, we will have an advantage over other products on the market.”
Ambrosi says he is confident in the Chinese market, but his company will not expand blindly. It will devote itself to optimizing distribution channels and building an after-sales service network.
The company has also made specific plans for a select number of smaller Chinese cities through which to expand its penetration. It has set up sales points in Sichuan, Liaoning and Zhejiang provinces.
“It is part of our distribution expansion strategy that relies on close collaboration with local trade customers and distributors,” he adds. “At the same time, our marketing efforts will be very much aligned with this plan in order to maximize our effectiveness in those specific markets.
“Overall, we are still a relatively small player compared with earlier entrants in the Chinese market, but we are ambitious and committed to succeed in the long run.”