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 NEW
YORK, Aug 2 (Reuters) - For most American shoppers,
"Made in China" may still suggest cheap toys,
but China's largest household
appliance
maker has ambitious
plans to change that with its sales of a growing range
of sleek
minibars.
Haier
Group Co., which according to some industry
estimates is the world's second-biggest maker of refrigerators,
is seeking to outflank
America's three major appliance makers by competing
on image rather than price, and by targeting
students in the hope that they will remain loyal
as they get older.
And
so
far the strategy, which may signal the way
for future campaign in the U.S. market by other Chinese
consumer products companies, may be working - at least
according to two arms of the world's largest retailer
Wal-Mart Stores Inc.
"It's
not about whether they're made in China," said
Melissa Berryhill, a spokeswoman for Wal-Mart's
Sam's
Club, whose last holiday season catalog
featured a black Haier cooler with smoked glass doors
that is big enough to chill
30 bottles of wine.
"They're
an exceptional value," she said of the $300 luxury
machine, sold along with the more ordinary Haier chest
freezer that costs about $160.
Wal-Mart's
main discount operation in April began selling the chest
freezers in half of its 2,600 stores, while most of
its stores sell at least one of two versions of compact
refrigerators made by Haier.
"They're
popular and beating our expectations on sales,"
said Wal-Mart spokesman
Rob Phillips, who added that the Haier 4.6 cubic
feet and 5 cubic feet freezers cost about the same as
General Electric Co.'s comparable
products, selling for around $169.
COLLEGE
TOEHOLD
GE,
Whirlpool
Corp.
and Maytag
Corp. currently dominate
the U.S. marketplace for household appliances but they
tend to focus most of their attention on mainstream
areas such as large refrigerators and freezers.
Haier,
which says it currently sells $200 million worth of
appliances in the U.S. annually, now claims more than
a 35 percent share of the U.S. market for refrigerators
4 cubic feet and smaller - the minibars found in hotels
and college dormitories.
"When
those college kids
using our little refrigerators grow up and marry, we
want them to be thinking of us for their first fridge,"
said Michael Jemal, Haier America's president, who was
Haier's first U.S. distributor before setting up the
unit in 1999.
Haier
may need to depend less on the Chinese market because
it is likely to face an increasing challenge on its
own turf.
China's entry into the World
Trade Organization will open
up Chinese manufacturers to
greater foreign competition at home.
Haier,
which had global revenues
of $5 billion last year, spent $30 million setting up
a plant late last year in Camden, South Carolina that
will make large Haier brand refrigerators. Company officials
say they hope initiatives like that will grow U.S. sales
to $1 billion by 2004.
"They're
building up their learning curve
in the U.S., and then picking up niche
markets," said Ming-Jer Chen, a professor at the
Darden School of Business Administration at the University
of Virginia and the author of a new book, Inside
Chinese Business.
BROADWAY
HEADQUARTERS
The company, whose Chief Executive
Zhang Ruimin is famous in China for being filmed smashing
sub-standard products with a hammer, last week bought
a historical bank building on Broadway in Manhattan
for $14 million.
"Buying
a New York building for $14 million is not what's going
to make us," said Jemal. "It's about offering
the customers the products the competition doesn't have."
In
the third quarter of 2002, for example, the company
plans to launch stainless
steel Internet-linked appliances with Flash
Gordon stylings, such as a home clothes washing
machine that can be started via the Internet, he said.
To
grow its brand in the U.S., the company has taken out
ad space on
a case-by-case basis
on trolley
cars at JFK
International Airport in New York and on
billboards
in Miami and Chicago, but has not yet contracted
with any of the big advertising firms. And Haier America
is not only battling rival appliance makers in the U.S.
- it is also manufacturing for some of them. As OEM，Haier America
does about 20 to 25 percent of its manufacturing on
a contract basis for other companies, including big
U.S. competitors, who sell its products under their
own brand names.
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