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Chinese strive to shed cheap smell of success
Date September 15, 2012
Hamish McDonald
Asia-Pacific editor, Sydney Morning Herald
Clean start ... China's Haier has moved to buy New Zealand's Fisher & Paykel and move into the wealthier world markets. Photo: Reuters
A visit to the factory of the Haier group in China's north-eastern city of Qingdao is initially a daunting experience. In hall after vast hall, tens of thousands of trim young workers in neat uniforms work on assembly lines of refrigerators, airconditioners, washing machines and other gadgets.
At the entrance to the dining hall is a monument to the management style of Zhang Ruimin, 63, who built a struggling local fridge-maker at the time of China's economic opening in 1978 into one of the world's biggest white goods manufacturers, with annual sales of $23 billion.
It is a board featuring the photographs of Haier's top executives, with an electronic counter beside each picture showing how colleagues rate their performance. Stay with a negative rating for too many months, and the executive is demoted or shifted.
Yet a look at the factory showroom is an anti-climax. Product after product, some with ingenious but often not very useful features, does not match up in style and suitability to the brands offered by American, European or South Korean rivals.
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Haier is big in China, and in many parts of the developing world, but has still not made it big in the sophisticated consumer markets it targeted a decade ago. In the United States, notably, BusinessWeek magazine reports it is still mainly selling products such as mini-fridges for motels and college dormitories.
Which might explain why Haier moved this week to buy the New Zealand white goods brand Fisher & Paykel for about $545 million. The Auckland-based firm has been an outstanding example of how manufacturing can survive in a small, remote and relatively high-wage economy - by focusing on style and quality.
Haier says it wants to keep Fisher & Paykel as a stand-alone operation and will retain its product development base in New Zealand. In other words, the Chinese giant is coming to the Kiwis for ideas about what it needs to be marketing in the wealthier parts of the globe.
It points to an increasingly glaring weakness of capitalism with Chinese characteristics: the lack of global brands. Japan and South Korea developed strong brands within a couple of decades of their modern era industrial take-off: Sony, Matsushita, Toyota, Honda, Hyundai, ******* and many more.
Read more: http://www.smh.com.au/world/chinese-...#ixzz26UmQrJqv
Date September 15, 2012
Hamish McDonald
Asia-Pacific editor, Sydney Morning Herald
Clean start ... China's Haier has moved to buy New Zealand's Fisher & Paykel and move into the wealthier world markets. Photo: ReutersA visit to the factory of the Haier group in China's north-eastern city of Qingdao is initially a daunting experience. In hall after vast hall, tens of thousands of trim young workers in neat uniforms work on assembly lines of refrigerators, airconditioners, washing machines and other gadgets.
At the entrance to the dining hall is a monument to the management style of Zhang Ruimin, 63, who built a struggling local fridge-maker at the time of China's economic opening in 1978 into one of the world's biggest white goods manufacturers, with annual sales of $23 billion.
It is a board featuring the photographs of Haier's top executives, with an electronic counter beside each picture showing how colleagues rate their performance. Stay with a negative rating for too many months, and the executive is demoted or shifted.
Yet a look at the factory showroom is an anti-climax. Product after product, some with ingenious but often not very useful features, does not match up in style and suitability to the brands offered by American, European or South Korean rivals.
Advertisement
Haier is big in China, and in many parts of the developing world, but has still not made it big in the sophisticated consumer markets it targeted a decade ago. In the United States, notably, BusinessWeek magazine reports it is still mainly selling products such as mini-fridges for motels and college dormitories.
Which might explain why Haier moved this week to buy the New Zealand white goods brand Fisher & Paykel for about $545 million. The Auckland-based firm has been an outstanding example of how manufacturing can survive in a small, remote and relatively high-wage economy - by focusing on style and quality.
Haier says it wants to keep Fisher & Paykel as a stand-alone operation and will retain its product development base in New Zealand. In other words, the Chinese giant is coming to the Kiwis for ideas about what it needs to be marketing in the wealthier parts of the globe.
It points to an increasingly glaring weakness of capitalism with Chinese characteristics: the lack of global brands. Japan and South Korea developed strong brands within a couple of decades of their modern era industrial take-off: Sony, Matsushita, Toyota, Honda, Hyundai, ******* and many more.
Read more: http://www.smh.com.au/world/chinese-...#ixzz26UmQrJqv