China is the world’s most populous country and the fastest-growing economy. With 1.3 Billion people, it’s a giant piece of future market potential for global brands. As marketers try to tap into the growth offered by the Chinese market, many are watching Chinese brands beat them to the punch, making rapid inroads into established, western markets. Haier is a noteworthy example: an established home appliance brand in China, this brand has carved out a prominent space in the highly competitive US appliance market. Watching Haier we can learn a few lessons that might inform our own strategies for entering growth markets outside of our current footprint:
- Finding White Space: Haier Group made initial inroads in the U.S. market by focusing on novel product categories such as refrigerated wine cellars; Haier has since captured 50% of the market for these devices, gaining a foothold that they can use to migrate from niche to big ticket purchases.
- Leveraging The Halo Effect: After establishing itself in compact refrigerators and wine coolers, the company has entered other categories—it now sells 2% of all full-size refrigerators in the U.S., 16% of window air conditioners, and recently introduced a line of flat-screen TVs and DVD players.
- Playing to Local Perceptions: The name Haier was adapted from German to deliberately obscure the company’s Chinese origins and play to North American perceptions of German quality and reliability.
So what about western brands entering the Chinese market? Join Iconoculture’s lead Consumer Strategist covering East Asia, Jeff Yang on May 3rd, for an overview of recent trends, developments, and shifts in consumer behavior in China. We’ll unpack the unique “cultural DNA” of this incredible market and take a closer look at brands that have successfully captured the mindshare of Chinese consumers. Board members can register here.
For a quick look into what consumers are doing in China, Board members can also check out a few of Iconoculture’s latest global consumer observations.