Europe and the United States in the home appliance fired in defense: unspeakable high-end layout

In the foreign-invested enterprise groups of China's home appliance industry, compared with Japanese-funded enterprises' group protracted warfare and Korean-funded enterprises' wild assaults, European and American household electrical appliance companies can be considered as “alternative”: On the one hand, European and American enterprises cannot become Chinese home appliance industry. The mainstream enterprises have not formed the expansion effect of large-scale brand-type enterprises; on the other hand, after experiencing many changes in joint ventures, sole proprietorships and other rounds in the market competition, they suddenly found that they not only need courage, but also need endurance.

European and American Household Appliance Enterprises Launch "Defense Battle" in China

The old American-owned home appliance giant Megan has completely left. Whirlpool and Electrolux can only be established through the establishment of "joint ventures, brand licensing," and other means. After Philips sold the color TV business, it relied on the acquisition of Pentium Electric to consolidate its advantage in the field of small household appliances. Only Siemens, A. O. Smith has become China's home appliance market "fruit only" European and American companies.

However, these European and American companies have started their "defending battles" in the Chinese market through "sole investment in joint ventures, brand licensing" and other means. In the future, they all face a common development problem: Home appliances with extremely fierce competition, low barriers to entry, and thin profits are no longer the strategic priorities of European and American companies. Exit is only a matter of time. What really made Europe and American brands that have come to the Chinese market to meet Waterloo?

Stubborn U.S. capital miscalculation

In all foreign-invested household appliances entering the Chinese market, the performance of US-owned assets has been relatively weak, and it has always faced the dilemma of being forgotten by consumers. From the mid-1990s onwards, they entered China's Metek and A. O. American-owned companies such as Smith and Whirlpool suddenly discovered that China has long been the world leader in Japanese brands.

Due to the late entry time and the loosening of the policy control of China’s foreign investment ratio, U.S.-funded enterprises have greater autonomy in joint ventures. In 1995, Whirlpool successively established a joint venture with Snowflake Appliances and Narcissus Electric in refrigerators and washing machines. The proportion of Whirlpool Holdings reached 60% and 80% respectively. Later, in the joint venture between Mattel and Rongshida, Metek also had absolute control of the company.

The case of Meitek's defeat in China is quite representative. At that time, after entering the Chinese market in a joint venture, Mattel did not send senior management personnel other than technical transportation. In the face of declining performance, Mattek again made a very erroneous decision and chose a team of "airborne" professional managers who do not understand the Chinese market. Eventually, China lost its management team’s decision-making mistakes. Similar cases also appear in Whirlpool's two joint ventures in China.

Regardless of the land and water that Meitek or Whirlpool encounters, they are inevitably related to differences in corporate management concepts and product R&D styles. They place too much emphasis on me and neglect the differentiation of the local market. The style of U.S.-owned household appliances is like that of American cars, and they are pursuing Yamato's comfort. After entering China, U.S. capital sticks to the characteristics of its products, ignoring Chinese consumers' demand for products that are exquisite, compact and energy-efficient, and pursuing large capacity, awkward styles, and high power consumption, and they are eventually “taken by the Japanese and Korean companies”.

A series of miscalculations in the business strategy eventually led to the fall of Metax in the global market and was eventually acquired by Whirlpool in 2006. At this time, Whirlpool turned into a “home appliance brand investor” in the Chinese market, and the right to operate air conditioners and water heaters was granted to Suning Appliances, while refrigerators and washing machines were operated by Hisense Kelon.

Unlike the ups and downs in the Chinese market, Metek and Whirlpool entered China in 1999. O. Smith has been living in Nanjing for a long time. By building an independent platform integrating R&D, production, and sales and changing the strategy for the development of gas water heaters in the United States, he entered China and vigorously developed trend products such as electric water heaters, solar energy, and air power to realize industrialization. The layout of the three major hot-water markets in the commercial, home, and domestic markets, and the stability of its management rights through the search for senior management teams that understand the Chinese market has led to its stable development in China.

A. O. Smith's successful expansion experience in China also contrasted with the many mistakes made by his American counterparts before entering the Chinese market. The proud US-owned companies must also bow their heads.

Untold European high-end layout

Whether it is US-owned or European-funded, its entry into the Chinese home appliance industry has been sticking to white electricity and small household appliances for many years. However, this continued deepening of specialization has not brought direct benefits to European-owned brands. Siemens and Electrolux, who specialize in white electricity, and Philips, Saibo, and Ariston, which specialize in water heaters, have been on the Chinese market for many years. In addition to Siemens’ performance in the high-end white-box market, several others Enterprises are rushing into the market.

"Hot to eat hot tofu," the path difference between Siemens and Electrolux after entering China eventually presented two completely different states. Siemens cooperated with Little Swan and Yangzi refrigerators in washing machines and refrigerators, and Electrolux also cooperated with Sino-Italian refrigerators and Hangzhou Wanbao air conditioners. Although the European duchess also pursued controlling rights and entered China in a similar manner to American capital, the styles of the two companies are quite different. With Electrolux in pursuit of rapid market size in the short term, even for the market share at the expense of brand positioning and different market strategies, Siemens entered the Chinese market for many years has been entrenched in the intensive cultivation of high-end market. The same is the use of professional managers to open up the Chinese market, Electrolux in the Chinese coach for six years in exchange for five years, eventually led to a comprehensive "frustration" in China, and Siemens's high level of Chinese management team has maintained a high degree of trust and maintained more than ten The year's stability will eventually "fall root" on high-end white electricity.

In the 1980s, having a Philips CRT black and white TV was a symbol of the status of each Chinese family. As Japanese companies have dominated the field of black electronics, South Korean and Chinese companies have risen, and Philips has faded out of global black industry such as China. In 2010, Philips’ TV business was acquired by Taiwan’s TPV. Today, in the Chinese market, Philips is only living in the area of ​​small household appliances, and its influence is gradually weakening.

Smart companies should not ignore consumer demand, and they should not only cater to the market in pursuit of market size, but should also understand consumer education and market cultivation. At this point, European-funded enterprises are even smarter than American-funded enterprises. Despite the emphasis on R&D and the pursuit of high-end European-style household appliances that have just been placed on Chinese shelves, consumers do not agree with price, performance, and aesthetics. However, the eager European brands did not abandon the high-end frontline while properly adjusting the direction of product development and created a high-quality brand image.

European and American rules of the game

"One side of the water and soil to cultivate a person", from different regions of the European Department, the United States Department of household electrical appliance companies have different temperament, the difference in brand culture also created a two-land brand in the Chinese market for different opportunities. For Chinese home appliance companies, European and American companies are worth studying and using for their own purposes in product development, channel construction, and market development.

In the Chinese home appliance market where price wars and service wars continue, European and American brands that abide by the rules of the game have been insulated from vicious competition. The brand heritage makes low-cost strategies and smashing opponents rarely appear in the marketing strategies of these brands. European and American companies use technology research and development, product upgrades, and normal public relations tools to reflect the brand's competitiveness. The company's own development is achieved through the maintenance of healthy competition among enterprises and the normal operation of the market.