HO CHI MINH CITY, Sept. 1, 2011 /PRNewswire-Asia/ --
While Europe and the US are experiencing a downturn and capital markets are getting pummeled, the Association of Southeast Asian Nations (ASEAN) seems to be working out a lot and keeping its prosperity. Leading Chinese and Japanese home appliance makers are optimistic about the prospects for the region, as evidenced by ongoing investments and acquisitions.
At the new product release conference held by Midea Living Appliances Group in Vietnam on June 28, 2011, Midea announced an investment of US$40 million to build their third manufacturing factory for the ASEAN market, as part of the company's strategic development plan in the region. One month later, on July 28, Haier, another Chinese home appliance giant, announced a major investment to acquire the washing machine, refrigerator and other home appliance businesses of Sanyo Electric in Japan and ASEAN countries.
A middle management executive at a Japanese home appliance maker reflected that this is definitely no coincidence. He further elaborated, "It's a signal that Chinese home appliance companies are collectively looking at the good prospects of the ASEAN market, and initiating a new round of overseas expansion."
He is of the opinion that the activities being undertaken by Chinese home appliance manufacturers indicate the start of another round of reshuffling in the ASEAN market.
Looking at the issue more closely - why are Chinese makers focusing to such a degree on the ASEAN market? "One of the reasons is the region's geographic advantage. In addition, most Chinese brands who entered the market have already established their own brand identities there. This is at variance with the usual way manufacturers conduct their outsourcing efforts: they usually only participate in the manufacturing and trade processes – that is the route normally taken by European, American and Japanese brands. The Chinese brands are trailblazing a new trend at a global level: they are building their own comprehensive channels, including taking control of both the manufacturing and branding aspects," he commented, before further adding, "Meanwhile, in terms of the entry route for brands, the ASEAN region is undoubtedly the one for Chinese home appliance makers to break their teeth on, before moving on to a full globalization of their efforts.
In addition to expanding capacity, Chinese home appliance brands will continue to pay close attention to building their own channels in the ASEAN market. Leading Chinese home appliance maker Midea Living Appliances Group's self-managed channels are already fully developed and working. The company's ASEAN sales joint venture with premium clients in Vietnam has been registered with the necessary authorities, and will formally open for business in September. Its sales network encompasses all provinces and cities across Vietnam, paving the way for the easy set up of channels and localization of human resources in the country. In other key ASEAN markets, Midea has also expanded its sales channels through similar collaborations with local agents.
