Layout of Overseas Home Appliance Giants' Gold Rushing Air Conditioning Market in India

Midea announced on the evening of January 6 that Midea intends to invest in and expand India's air-conditioning market and has reached an agreement with Carrier Corporation for the production and sales of domestic air conditioners in India and production and sales of some light commercial air conditioners for Midea. Business, all will be integrated into one company. According to the U.S. group, the newly-integrated company's investment amounted to approximately 33 million U.S. dollars, of which U.S. investment was approximately 20 million U.S. dollars, holding 60%; and Carrier U.S. investment was approximately 13 million U.S. dollars, holding 40% of shares. The initial investment capacity of the new company is about 1 million units.

The launch of the United States in India is the fifth largest overseas production base for the United States following Vietnam, Egypt, Brazil, and Argentina. It is also considered by the industry as an important measure to accelerate the expansion of globalization. Li Feide, secretary of the board of directors of Midea Electric, said that one of Midea’s overseas strategies is to build factories and build its own brand in emerging markets. At the same time, he pointed out that for the future, it will build factories in one or two other emerging market countries to gradually complete the layout of emerging markets.

The increase in demand from overseas emerging markets has boosted the Chinese home appliance companies' strategy of “going out”. Among them, the white power giant Midea has started a plan to build factories overseas, this time targeting India. In this regard, some analysts have pointed out that the expansion of Midea's overseas emerging markets in recent years shows the company's confidence in overseas emerging markets and is in line with the current "going out" development strategy of Chinese companies. Next, Midea should consider how to respond to India's air-conditioning market.

For India's air-conditioning market, Japanese and Korean companies have long been preoccupied. Chen Wenhai, chairman of the China (Shenzhen) Consumer Electronics Show (CCEF) organizing committee, once said: “Japanese and Korean household appliance manufacturers such as Panasonic, LG Electronics, and Samsung Electronics have started the Indian market one after another. Raiders, to participate in the competition, and China's home appliance manufacturers have yet to be further strengthened in India's market development efforts, occupy an adequate position in this important foreign market."

In fact, Japanese and Korean companies have established their own brand status after years of market cultivation. According to the Indian Economic Times, LG Electronics has achieved and stabilized its dominant position in home air conditioning in India in 2008. And other Japanese and Korean brands followed.

It is reported that Japanese companies that previously only sold high-end products changed their strategies and began to take into account the number of products. In addition, they also recruited local Indian employees to develop products more suitable for the Indian market. Among them, Panasonic made frequent efforts in the Indian market. After thorough investigation of local consumption and usage habits, the R&D production department tailored localization for the Indian market. commodity. In addition, Panasonic announced last year that it will establish its first R&D base in Haryana, India.

Midea Air-Conditions entered the Indian market with high price sensitivity this time. It is bound to face the full reclamation of Japanese and Korean companies in the mid- to high-end market, but Wang Fenghua, an analyst at Hongyuan Securities, believes that LG, Votas, and Samsung have the top three market share in India. , but their respective sales are below 1 million units. The company's joint development of the joint venture to expand the Indian market, expanding the scale of production capacity, aimed at seizing the opportunities in the future market outbreak.

India's intricate air-conditioning market situation will also plague beautiful air conditioning. Since 2000, he has started exploring the Indian market. Ningbo Yongdixi, the exporter of Ningbo Qidi Electric Co., Ltd., has revealed that the market in India is too chaotic, there is no rule for competition, and products rely solely on low prices to win. “There are four or five hundred local air-conditioning brands in India, coupled with the preconceptions of home appliance companies such as Japan and South Korea, and it is difficult for Chinese companies to compete,” Lu Yongxi said frankly.

Compared with the influence of brands such as Gree and Midea, Qidi, a brand that is not seen in China, is also relatively expensive in India. According to Lu Yongxi, consumer groups buying air-conditioning products in India are mostly white-collar workers and wealthy people. Air-conditioning can be regarded as a luxury product in India, and the penetration rate is also low. Compared to high-cost air conditioners, electric fans, air-conditioning fans and other small refrigeration appliances are welcomed by ordinary people because of their low prices.

At the same time, the complex economic situation in India will also affect the progress of the United States in India. According to data released by the Central Bureau of Statistics (CSO) of India in May 2011, India’s economic growth in the first quarter fell to 7.8%. India's manufacturing industry developed slowly in 2011, and the once-increase in crude oil prices also exerted pressure on the construction of infrastructure. The government's tightening of fiscal management led to a tightening of monetary policy and foreign investment fell. It is reported that policy conflicts and tariff systems among different provinces in India have all caused the Japanese companies that set up factories in India to suffer. In addition, some local brands will also join the local government to take protective measures to prevent the market from being seized by overseas brands.

However, it is worth mentioning that the poor domestic production capacity of home appliance companies in India provides opportunities for Chinese companies to build factories. According to the relevant person in charge of the China Household Electrical Appliances Association, the local refrigerator and air-conditioner companies are not well-supported, and most of the refrigerators and air-conditioning compressors in India are sourced from China.

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Midea overseas expansion of the road to open up the South Asian <br> <br>

In January 2012, Midea planned to expand India's air-conditioning market through cooperation with Carrier. The two parties have reached an agreement with Midea to invest approximately US$20 million (60% stake) and Carrier’s investment of approximately US$13 million (40% stake) to form a joint venture company, which will integrate the production of light commercial air-conditioning between home air conditioners and Midea in India. With sales operations, the initial investment capacity is about 1 million units.

Entering Latin America

In November 2011, Midea’s acquisition of a 51% stake in Carrier’s Latin America Air Conditioning business for US$223.3 million, Carrier’s continued ownership of 49%, and the US and Carrier’s joint operation and expansion of air conditioning in Latin America business. The joint ventures are mainly in Brazil, Argentina and Chile, and include three air-conditioning manufacturing plants in Manaus, Argentina, and Tierra del Fuego. The combined sales revenue of the two parties will reach nearly 900 million U.S. dollars. On November 30, the US-based Carrier's Latin American joint venture was officially established.

Sword pointing to Africa

In October 2010, Midea’s acquisition of a 32.5% stake in Miraco, Egypt, through an overseas wholly-owned subsidiary company for US$57.48 million. After the completion of the equity acquisition, Midea Electric will become Miraco's second largest shareholder with a 32.5% stake.

ASEAN

In 2007, Midea built a new industrial park base in Vietnam. At the same time, the channel layout has been completed in ASEAN in early 2011. In the ASEAN countries such as Indonesia, the Philippines, Malaysia, and Thailand, Midea’s independent brands have gradually gained consumer recognition.

In 2011, the United States Group achieved sales revenue of 140 billion yuan. Among them, Midea's domestic sales of air conditioners ranked first, and for seven consecutive years maintained the first good momentum of exports; the United States's central air-conditioning ranked first in domestic brands; Midea refrigerators, Midea washing machines have entered the top two in the industry. In the “2007 National Quality Award” assessment, Guangdong Midea Refrigeration Equipment Co., Ltd. was the only Chinese household appliance industry company that won this award in 2007. Facing the future, Midea will continue to uphold the business philosophy of “creating a better life for mankind” and ensure that Midea’s air conditioners, Midea’s refrigerators, and Midea’s washing machines continue to maintain a sustained and steady development.