Washing machines might not be as sexy as real estate and IT-investments, but China´s white good producers have also embarked on a global road, says business analyst James Roy to Reuters. Haier has been investing abroad for decades, but others are following.
Haier is not alone. Major Chinese white goods makers such as Hisense Electric Co Ltd (600060.SS) and Midea Group Co Ltd (000333.SZ), have been on an overseas spending spree this year, as they seek to snap up foreign brands to tap faster-growing markets as growth slows at home.
“Access to other markets helps them find new sources of growth as the domestic market slows,” said James Roy, associate principal of Shanghai-based China Market Research Group. “It’s also an opportunity to gain additional know-how to succeed in China, where competition is becoming fairly intense.”
For rivals such as Whirlpool Corp (WHR.N), Electrolux, LG and Samsung Electronics (005930.KS) – some of the biggest names it will come up against in the United States – one aspect of Haier’s rise in Australia will give some cause for comfort. Despite integration of their sales, logistics and customer care operations, the deal has yet to lead to larger market share gains for Haier’s own brand, highlighting challenges the group faces as it seeks to build market share in the mid-tier segment of the market.
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