Founded in 1924, the International Consumer Electronics Show (IFA) in Berlin has a glorious history of 99 years and is known as the vane of the global electronic home appliance industry. This year's 26 pavilions were crowded with 2,059 exhibitors from 48 countries, and Chinese enterprises represented by Hisense, Honor, DJI, etc. made a high-profile appearance, becoming a "new business card" made in China and blowing a "Chinese style" in Berlin.
As the world's largest producer of consumer electronics, in recent years, Chinese enterprises represented by Hisense have made strides to "go global", broaden the "circle of friends", expand, deepen and take root in overseas markets, and open up territory in the global market through technological innovation, localized operation, excellent product quality and ultra-high cost performance, kicking out a "world wave".
A corner of the IFA 2023 Hisense booth
"Hisense breaks a confinement"
As the "Lead Partner" of this IFA exhibition, Hisense's logo is printed in a prominent position on the IFA certificate. In the Hisense exhibition hall of nearly 3,000 square meters, there was a long queue for the Euro 2024 theme "check-in point", and people rushed to take photos with the mascot teddy bear "Albert" and the European Cup trophy "Delaunay Cup".
At the opening ceremony of IFA, Hisense President Yu Zhitao officially announced that he would become the official partner of Euro 2024 with his fluent speech in English, which is the third time since 2016 that Hisense has become an official sponsor of the European Cup.
Hisense President Yu Zhitao delivered a speech at IFA 2023
With the blessing of a series of sports marketing, "HISENSE Hisense" is well-known in the world, which greatly exceeds the trend of established enterprises in Japan and South Korea. In the view of Han Jianmin, vice president of marketing and general manager of Europe of Hisense International, it is not so much a "breakthrough" as it is that Hisense has broken a "confinement" - consumer electronics products made in China can be sold in the price range of $5,000, which was unimaginable before - laser TV did it - this high-end display product dominated by Chinese companies has allowed Hisense to gain a group of high-net-worth users, and also labeled "high-end" for Chinese manufacturing.
Fang Xueyu, Executive Vice President of Marketing of Hisense International, said that the (sponsorship) of the European Cup and the World Cup not only enhances Hisense's brand recognition, but also effectively accumulates Hisense's brand equity, and also fulfills the social responsibility of leading brands in the industry.
In the terminal store in Berlin city, Hisense laser TV, which costs about 3,000 euros, is very popular, forming a differentiated competitive advantage with other international brands. It is understood that Hisense laser TV is more than 50% energy-saving than traditional TV, and the recycling rate is as high as 92%, in the context of the energy crisis, laser TV products are very suitable for European consumers' demand for high energy efficiency of home appliances.
Along with the increase in market share, Hisense's brand value, price index and profitability are also available. In order to seize more high-end markets, at the IFA exhibition, Hisense brought the latest folding screen laser TV products, which can easily enter narrow spaces even if the screen is as large as 120 inches, solving the pain points of consumers who buy ultra-large size TVs that are difficult to transport and install.
"Global home appliance market reshuffle"
In the first half of this year, economic growth in almost all regions of the world, including Germany, slowed compared with the previous year. According to reports, in the first six months of 2023, Germans bought significantly fewer electronic devices than a year ago, sales of household appliances fell by 6.2%, and sales of private IT products even fell by 15.3%.
"The terminal retail of the entire home appliance industry has seen a double-digit decline in Europe and the United States, and Europe and the United States can almost reach a decline of 10%~12%." Fang Xueyu said that the shrinking market "cake", rising energy prices and exchange rate changes in Europe, as well as the complex and uncertain international situation, have also brought a lot of operating pressure to overseas Chinese enterprises.
Hisense, known for its "steady operation", has seized the opportunity and won the initiative under pressure. In sharp contrast to the overall decline in Europe and the United States, in the first half of this year, the sales volume of Hisense refrigerator products in the European market increased by 22% year-on-year. Data from market research company GfK also shows that in the first half of this year, Hisense TV's sales in Europe bucked the trend, ranking in the top three in retail shares in nine countries including Germany, the United Kingdom, Italy and Spain. Taking the German market as an example, Hisense TV sales in Germany increased by more than 60%, and Hisense laser TV increased by 179% year-on-year.
Behind this decline and increase, it means that the European home appliance market is undergoing a reshuffle process, which is a major change in the global home appliance market pattern, and Chinese home appliance companies represented by Hisense have moved from "following" to "leading".
Fang Xueyu believes that if Hisense can first adhere to leading products and technologies, adhere to our own brands, continue to deepen sports marketing, and fully unite with channels, it is entirely possible to continue to expand market share.
"In the entire European market, the current market share of Hisense TV ranks third, and we hope to become the second or even the first in 2~3 years." She said. From the perspective of the global market, Yu Zhitao revealed that in 2022, Hisense TV's global shipments ranked second in the world, and it is expected that Hisense will produce about 28 million display terminal devices in 2023, at the same time, Hisense has also innovated and developed new display products such as mobile smart screens, art TVs, and smart windows, and rapidly extended to B2B industry sectors such as smart medical, commercial displays, and vehicle displays.
"Made in China working together"
Velenje is located in the north of Slovenia, surrounded by mountains, dotted with blue lakes, white sails and picturesque scenery, where Hisense's European headquarters is located. Vélenje thrived on coal mines, where men dug coal to earn money and families did laundry and cooking, giving birth to the high-end white goods company Gorenje.
In 2018, Hisense acquired the poorly operated Gorenje (Guloni), and in the early days of the merger, Gorenje's product inventory turnover was as long as 100 days, and the finished product capital occupied hundreds of millions of euros, and the company's operation was overwhelmed.
A view of the Gorenje factory in Slovenia
After Hisense took over, based on its mature manufacturing management experience, the Chinese team made reform decisions at the first time, and achieved a turnaround after 18 months of integration through a package of measures such as optimizing production capacity, adjusting the structure, producing to order, on-time delivery, and performance appraisal.
Before the acquisition, Gorenje had small production capacity, a complex product line, no bargaining advantage in procurement, and a very long account period to suppliers. Hisense plays the role of "chain master", and a large number of high-quality, more cost-competitive Chinese suppliers gradually go overseas and become Gorenje's suppliers, realizing global procurement in the true sense.
From the beginning of "employees can't pay wages" and "suppliers can't get money", to the current "employee performance growth" and "supplier confidence has greatly increased", Hisense has handed over an excellent answer sheet for localized operations. At present, Hisense has crossed the acquisition pain period and entered the harvest period, and has achieved continuous profitability since 2020, allowing Gorenje to regain its strength and gain a firm foothold in Slovenia, Eastern Europe and even the whole of Europe.
As early as 2006, Hisense determined the internationalization strategy of "big head overseas", and today Hisense has become one of the few enterprises in the industry that carries out all-round and in-depth layout in the field of display technology and smart home appliances, completely covering the three major appliance business sectors of black electricity, white electricity and kitchen appliances. Hisense now has 66 overseas companies and offices, which can realize the integration of production, marketing and research in the local area, and can respond quickly to market changes, which is an important factor for Hisense's "contrarian growth".
Jia Shaoqian, chairman of Hisense Group, once said that high-end is an inevitable choice for Chinese manufacturing, "Made in China has full strength and confidence, constantly moving towards the high end of the global value chain, bringing more surprises to the world, which is not only the struggle and confidence of Hisense an enterprise, but also the glory and dream of all Chinese manufacturing industries." ”
Eight years ago, Hisense's revenue in the European market was less than 100 million euros, and today the annual revenue in the region has exceeded 3 billion euros, from less than 1% of the TV market share to about 9% at present, and the report card of the European market has become a microcosm of Hisense's globalization.
Fang Xueyu said, "Last year, the group's revenue was 184.9 billion yuan, and overseas 75.7 billion yuan, accounting for 41% overseas; This year, the group's revenue in the first half of the year was 99.4 billion, accounting for 41.5% overseas. In the future, we hope to enter globalization 3.0 and achieve more than 50% of overseas, and hope to achieve this goal by 2026. ”
Hisense's "Made in China, Work Together" advertisement at the Qatar World Cup
"Do you remember the 2022 World Cup in Qatar, when we played 'Made in China working together' on the field? Hisense is not only to promote itself, but also to help the whole of China! This is exactly the inner monologue of Hisense "going to sea". (Mincha)
Source: Guangming Web