Chinese durable firms eye bigger pie

RED STAR OVER INDIA - II

They might have made little headway in the market so far, but leading Chinese consumer electronics companies are busy drawing up big plans to expand their footprints in India.

After acquiring Anchor Daewoo's appliance business last year, Haier is on the prowl for some local brands. TCL is getting ready to expand its product range to mobile phones and home appliances.

Both the companies talk of putting up large manufacturing facilities in the country comparable to those of Korean chaebols LG and Samsung.

All the three top Chinese consumer electronics companies "" TCL, Haier and Konka "" set up shop in the country some years back. TCL later decided to go solo in India and Konka and Haier first formed a joint venture with the Hotline group. When that fell through, both the companies set up a fully-owned subsidiary but Konka exited India in 2004.

The two remaining incumbents' combined market share across categories is negligible "" in the Rs 25,000-crore Indian consumer durables market, TCL had sales of Rs 440 crore in 2006-07 and Haier just Rs 325 crore, in 2007.

Their rivals say this is because these companies do not have their own manufacturing plants in the country and source from local producers.

"Because of this, they are not able to induct new technology in their products or customise their models for the different markets of the country," said a top functionary of a large consumer durables company.

Some rivals also talk of the low-technology perception of Chinese products compared to Japanese and Chinese products.

Only too aware of the image, Haier had decided to price its products at a five per cent premium over those of market leaders LG and Samsung.

"We aspire to be one of the top brands in three to five years and to achieve that we are looking at brand acquisitions," says Haier Appliances (India) Chief Operating Officer Pranay Dhabhai.

The company's new gameplan includes consolidating its dealership and distribution network, product upgrade and entering new segments.

The company has already launched portable wine cellars as part of this exercise and plans to enter into three new segments "" commercial refrigeration, water heaters and commercial ACs. It also plans to expand its exclusive showrooms, Planet Haier, from 23 to 25 this year.

TCL plans to launch IT products and mobile phones in the near future apart from entering the smaller home appliances category besides expanding its current portfolio of TVs, air conditioners, washing machines and DVD players. The company plans to launch small appliances such as mixers, juicers, grinders and rice cookers this year.

The big makeover will come once their own factories are up and running. While Haier already has a Daewoo Anchor's facility, in Pune, which makes refrigerators, colour televisions and washing machines, TCL is looking at a new unit in Noida by 2009-10.

Haier plans to make India a manufacturing and export hub in the future for East Europe, West Asia, Africa and Sri Lanka.

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