Nations Brands taps opportunities to sponsor sporting events and expand growth points
Chinese home appliance makers are accelerating steps to expand their presence in the Middle East and Africa and are looking to improve brand awareness and increase product sales by sponsoring or providing products and technologies for the ongoing FIFA World Cup in Qatar.
Data from the Home Appliances Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products showed that China’s home appliance exports to Qatar rose more than 10 percent year-on-year in the first 10 months.
Meanwhile, China’s exports of color televisions to 22 members of the Arab world, including Qatar, rose 29 percent from a year earlier in the January-October period, while exports of white goods rose 11.21 percent.
As one of the official sponsors of the FIFA World Cup in Qatar, Chinese home appliance manufacturer Hisense Group has stepped up its efforts to expand its footprint in the Middle East and African markets.
“The Middle East is one of our fastest-growing regions worldwide and serves as an important part of Hisense’s globalization strategy,” said Oh Yang, general manager of Hisense’s Middle East and Africa division, while the company’s sales reached 31.5 percent. A year-on-year increase in these regions in 2021 despite the Covid-19 pandemic, rising raw material prices and rising ocean freight rates.
Hisense opened its first physical store in Dubai, the capital of the United Arab Emirates, in March, marking a strategic milestone in the company’s regional expansion efforts. It plans to open 10 brick-and-mortar stores in the Middle East and Africa this year.
Based in Qingdao, Shandong Province, the company hopes to improve brand awareness and influence by sponsoring major sporting events around the world. UEFA sponsored several world-class sporting events, including the Euro 2016 and 2020 tournaments and the 2018 FIFA World Cup in Russia.
Ou said Hisense will strengthen its cooperation with FIFA and other organizations, release tailor-made products, build strong emotional ties with consumers in the Middle East and Africa, and accelerate the company’s globalization process.
Currently, the company has branches in Dubai and South Africa, with a sales network covering 1.48 billion people in 70 countries in the Middle East and Africa. It also aims to set up its own after-sales service and call centers in major cities of these regions.
Hisense’s sales revenue in these regions has risen from 1.53 billion yuan ($220 million) in 2012 to 9.37 billion yuan in 2021, with an average annual growth rate of 25.9 percent, according to Hisense.
“We are considering the Middle East and Africa as pilots to explore our new businesses, including laser televisions, smartphones, intelligent transportation solutions and intelligent healthcare,” Ou said, adding that they will launch high-end products tailored to the needs of local consumers. .
“The Middle East and Africa serve as important markets in the Belt and Road Initiative, providing huge growth opportunities for companies to create self-owned brands and cross-border e-commerce,” said Zhou Nan, secretary general of the China Chamber. Branch of trade for import and export of machinery and electronic goods home appliances.
Despite geopolitical instability, Chinese companies have not slowed down their growth in these countries, Zhou said. “In recent years, some Middle Eastern countries such as the United Arab Emirates and Saudi Arabia have accelerated economic transformation, and Chinese companies are expected to invest and start businesses there, bringing new opportunities for Chinese brands.”
Liang Zhenpeng, an independent consumer electronics analyst, said sponsoring international sporting events such as the World Cup is an effective way for Chinese home appliance companies to promote brands and increase sales of products in overseas markets.
“In the past, most Chinese companies adopted the original equipment manufacturer model, but nowadays they tend to create their own brands in an effort to increase competitiveness on the global stage,” Liang added.
Other Chinese home appliance makers, such as Midea Group and Gree Electric Appliances, have provided air conditioners and related services for the Qatar World Cup and increased investment in the Middle East and African markets. Ventilation and air conditioning systems.
Midea has supplied 2,500 air conditioners to 100 security testing centers at the tournament venues and its central air conditioning systems have been installed in eight stadiums, most media centers and some ancillary facilities.
Several World Cup venues in Qatar, including Education City Stadium and Stadium 974, as well as a fan village, are equipped with central air conditioning systems from Gree, totaling more than 40,000 units.
“The ratio of Midea’s own brands has reached 80 percent in the Middle East, with products sold in the market mainly coming from our factories in China, Italy and Egypt,” said Dennis Lee, Midea’s general manager for the Middle East and Africa. Building Technologies Overseas Sales Co.
Midea has sought opportunities to achieve localized manufacturing in the Middle East in recent years in hopes of providing faster delivery to local consumers, Lee said.
Air conditioners are in high demand due to high temperatures in the region, Lee added. In 2010, Midea invested $57.48 million to acquire a 32.5 percent stake in Egypt’s major air conditioner supplier Miraco, becoming the company’s second largest shareholder.
The company has set up an overseas office in Dubai and a refrigerator, washing machine and water heater factory in Egypt, serving the Middle East and African markets.
“We will continue to provide low-carbon, energy-saving and intelligent building solutions to the Middle East market, accelerate our localization efforts, especially in the business-to-business segment, and hire local people involved in sales, technical service, finance and operations in the future,” Lee said.
In an inevitable trend, Chinese home appliance manufacturers are expanding their footprint to overseas markets for new profit growth and long-term growth, as the domestic home appliance market is almost saturated, said Zhao Meimei, Beijing’s assistant chairman. AVC based market advice.
AVC’s figures show that China’s home appliance industry’s sales revenue reached 338.9 billion yuan in the first half, down 9.3 percent year-on-year.
Haier Smart Home, a subsidiary of China’s largest home appliance manufacturer Haier Group, entered the Middle East and African markets in 1998. It has two industrial parks (one still under construction) and three plants in African countries including Egypt and Nigeria.
In August, the company announced plans to establish a 200,000-square-meter industrial complex in Cairo, Egypt, with a total investment of $130 million.
“Expansion into overseas markets will not only relieve the pressure of excess inventory on the domestic market, but also increase the international influence of Chinese home appliance companies,” said Dong Min, deputy secretary-general of the China Video Industry Association.
Setting up overseas manufacturing bases will not only bring China’s advanced manufacturing, research and development and management capabilities to overseas markets, but also create more employment opportunities for local people, he said.
Xie Chuanjiao Qingdao contributed to this story.