Haier might be the largest white good manufacturer, globally active, but is not yet seen as a global brand. The purchase of the appliances section of GE for US$5.4 billion might just change that perception, says James Roy, Associate Principal of the China Market Research Group (CMR) in the International Business Times.
The International Business Times:
Haier, the world’s No. 1 manufacturer of white goods by volume, has little more than 1 percent of the U.S. market. It is one of the reasons why it was able to win the deal — a previous sale of GE Appliances to Sweden’s Electrolux was opposed last year by U.S. antitrust regulators, who said the merged company’s significant combined market share would lead to higher prices.
“The GE deal would give Haier a stronger brand,” James Roy, associate principal at China Market Research Group in Shanghai, told International Business Times. “The company is a big player, but it has struggled in brand positioning, particularly in the U.S., where it’s seen as mass market.”
Even in the Chinese market, Roy said, it’s seen as a volume maker. Haier is always present, and reasonably priced, with a service infrastructure that people respect for its scale and reliability — but it’s maybe not something people get excited about. “We haven’t seen them making the kind of innovative moves we’ve seen from a brand like [smartphone maker] Xiaomi , which has leapfrogged competitors by introducing its own brand air purifiers, for example,” Roy added.
Zhang Ruimin, who has spoken of his desire to turn Haier into a “great company,” has long emphasized the importance of innovation, experimenting with innovative management structures in the company, and seeking to invest in smart devices, such as 3-D printed air conditioning units.
The takeover, experts say, aims to take Haier to the cutting edge, giving it not just GE’s brand name but also its software. “GE is famous for its strong emphasis on best practice, and Haier could learn from its innovation culture, too,” Roy told IBT…
(Haier) will require all of its flexibility to make a success of running one of the world’s oldest and most respected household appliance brands. China Market Research Group’s Roy said the example of Lenovo, which took over IBM personal computers and is now a market leader in the sector, is a promising one — if Haier approaches its acquisition in the right way.
“I could see it working if they don’t squander GE’s brand equity,” he said. “As long as they don’t look at this as a vanity acquisition, and are willing to learn from GE, they could make this work.”
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