U.S. firm launching more products for middle-income consumers in China
Whirlpool Corp, the U.S.-based white goods maker, is increasing its investment in China this year, with the planned amount exceeding the company's total investment in the country during the past five years, a top company official said on Wednesday.
Marc Bitzer, Whirlpool's global chief executive officer, said that the 108-year-old brand will launch a new washing machine, a new refrigerator and its Italian-made kitchen appliances collection in the country this year. The washing machine, which is under its Emperor product line, has been fully designed and produced in China.
Apart from serving Chinese consumers, the new line of products will be sold all over Asia and exported to the other parts of the world, he said.
Samuel Wu, president of Whirlpool Asia, said the products have been launched in line with the ongoing consumption upgrade in China and cater to the growing demands of the middle-income earners population.
"Chinese consumers are more sophisticated and attach more importance to quality and value. They prefer products that are pleasant to the eye, user-friendly, intelligent, and ideally, connected. We made major adjustments to our product lines last year and took steps to shorten the time spent on research and development," he said.
Ai Xiaoming, president of Whirlpool Corp's China unit, said the company is building a smart factory in the Hefei National High-tech Industry Development Zone of East China's Anhui province.
Whirlpool entered the Chinese market in 1994 and set up a joint venture in Hefei in 2014. After reporting huge losses in China in 2017, the company managed to make a profit last year, with the net profit estimated at around 300 million yuan ($44.7 million), according to its interim results announced in late January.
According to Bitzer, Whirlpool China contributed to about 4 percent of the corporation's global sales last year. The United States remained the biggest income earner in 2018, with revenue reaching $1.1 billion.
Although there is still a long way to go for China market to catch up, Bitzer said that there is still enough room for growth in the country. The penetration of dishwashers in mature markets is around 30 to 35 percent, while the same was less than 5 percent in China last year. Meanwhile, the penetration rate for dryers is between 40 and 45 percent in Europe and the US, but the number is only about 1 percent in China now.
As Bitzer explained, the home appliance market in China will not demonstrate a significant increment in amount in the next few years, but rather mature with the consumers showing more demand for premium and highly featured products.
According to financial market data provider HiThink Royal-Flush Information Network, Whirlpool was ranked 18th among all white goods makers in China based on the third quarter turnover of 2018.
But Wu said that the long-term goal for Whirlpool is to become the top foreign brand in China. To that end, Whirlpool still has much work to do. In the first place, the company should make the brand better known here, especially among younger consumers.
"We should also come up with more quality products. As the industry is witnessing intense competition, we need to help our dealers build up enough trust in our brands," Wu said.