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Home appliance firms stepping up image promotion

By Qiu Quanlin in Guangzhou (China Daily)

10:41, May 07, 2013

Major Chinese home appliance companies are attaching more importance to the promotion of their brands, in a bid to expand their overseas presence.

Zhang Ye, deputy general manager of the international marketing department at the Hisense Group, said the company has changed its strategy from original equipment manufacturing, or OEM, to building its brands in the overseas market.

"We're trying to build the brand by promoting high-end products in the overseas markets," Zhang told China Daily at the Canton Fair, officially known as the China Import and Export Fair.

Seen as a barometer of the nation's foreign trade, the 113th Canton Fair ended on Sunday in Guangzhou, the capital of Guangdong province, with transactions reaching $35.54 billion, up 8.8 percent from the previous session.

"Due to the limited global demand, the most efficient way to get a bigger market share is to increase your brand presence in high-end markets," Zhang said.

Chinese home appliance manufacturers still lag behind in international market share, compared with well-known overseas names such as Japan's Hitachi and Toshiba, Zhang said.

Attending large exhibitions at home and abroad will help Hisense boost its brand presence, Zhang said.

Domestic demand for home appliances is expected to slow this year, Zhang said. "But the international market will see growing demand. So we'll make brand promotion efforts in overseas markets the priority."

China's home appliances exports increased 10.6 percent year-on-year to reach $7.9 billion in the first two months of the year, sources with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products said.

Hisense, a Qingdao-based consumer electronics company, has been eyeing the overseas market to support its sustainable development since 2006, and has established 24 foreign branches and offices.

The company ships its products to more than 130 countries and regions, with sales in overseas markets up 29.1 percent year-on-year to 12.6 billion yuan ($2.04 billion) in 2012, company sources said.

Thanks to years of brand promotion efforts, Hisense's products are sold in high-end supermarkets and on websites such as Walmart, Hhgregg, Costco and in the United States.

Hisense's sales increased 51.8 percent in Australia, and 45.1 percent in Europe year-on-year in the first quarter, the company sources said.

It has set a sales target of $5 billion for overseas markets by 2015, which will enable it to become one of the world's top three home appliance manufacturers, Zhang said.

Meanwhile, Zhang Zhenghu, deputy general manager of the overseas sales branch of Gree Electric Appliance, said the company has also benefited greatly from brand promotion in overseas markets.

"Our sales in the US increased a lot after our advertisements were shown on a LED screen in New York's Times Square in March last year," Zhang Zhenghu told China Daily.

Thanks to efforts to upgrade its technology and brand promotion campaigns, Gree, based in Zhuhai, Guangdong province, posted an increase in sales of 19.8 percent year-on-year in 2012, with profits from exports reaching about 1 billion yuan, company sources said.

"For Chinese companies, investing overseas shouldn't be simply opening an office or a factory in a foreign country. You should bring in your own brands and technologies overseas to boost competitiveness in the global market," Zhang Zhenghu said.

Wei Tao, marketing director of Global Market Group, a leading Chinese B2B e-commerce service provider, said: "Most Chinese exporters have lower margins in the international market due to the lack of a high-end brand presence."

"The best way to increase profits is to attach more importance to improving product quality and diversifying sales channels," Wei said.

Wei called on Chinese manufacturers to focus on research and quality to improve the added value of products and to boost sales services.

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