Chinese electronics brands target US

25 June 2012

BEIJING: Big Chinese electronics brands such as Hisense, Huawei and ZTE are attempting to crack the American market, but face varied obstacles from low levels of awareness to governmental scrutiny.

Hisense is the largest manufacturer of flat-panel TVs in China and has been present in the US for a decade. It holds a category share of less than 1%, however, having previously focused on manufacturing for other firms.

The firm hopes US sales will almost double to $400m by 2013, and is working with Massachusetts Institute of Technology to develop television with 3D and voice recognition capabilities.

"From a marketing perspective, it's a golden opportunity. It's like a startup: How do you build a brand from essentially nothing to something? But we already have all the resources behind us," JoAnne Foist, marketing director, Hisense USA, told the China Daily.

More broadly, Foist suggested the goal was to become one of the "tier two” television manufacturers like Panasonic and Sharp, while learning from “tier one” players including LG, Samsung, and Vizio.

Elsewhere, Huawei, the telecoms group, premiered its new portfolio of smartphones at the Consumer Electronics Show in Las Vegas, and is engaging in a major branding push in most of its core markets.

While it is a private company, Huawei has had to battle perceptions among US shoppers that it is state-owned, according to Kevin Qi, senior vice president of its US arm.

In 2009, Sprint Nextel removed Huawei from a list of potential smartphone partners after the American government outlined worries over its links with the Chinese authorities.

Qi revealed Huawei spends $6bn a year with US vendors and employs 2,000 staff domestically, 70% of which are American, but the House of Representatives Intelligence Committee is now investigating the firm due to similar worries.

"We are playing the game by the rules," he added. "A company's strategy can materialise only if the business environment of the country will allow the company to do so."

ZTE, another telecoms group, runs ten US offices, and is also being investigated in the same way. It has rolled out 35 devices since 2007 via a tie-up with AT&T, and plans to invest $9bn in the US from 2012–14.

The organisation currently has an "America-China-Worldwide" policy of buying high quality components in the US, benefitting from cost savings in its home country, and then selling goods internationally.

"From opening research and development centers to working with a wide range of wireless companies to develop new products, ZTE is committed to expanding the US market through continuous investments," he added. "Chinese investment in the US is beneficial for businesses in both countries."

Data sourced from China Daily; additional content by Warc staff