At the China Consumer Electronics Conference(CCEC) held on Dec. 17， 2010， Changhong， Hisense， KONKA， Panasonic， SAMSUNG， SHARP and Skyworth were recognized as the“Most Competitive Brands” of the year in China; while TCL， Hisense， SHARP， Changhong， LG and Skyworth won the awards for “Best Innovation”.Of course half of the aforementioned brands are famous foreign brands from Japan or Korea， yet they hold a significant position in China.Asian consumer electronics brands are performing well in the Chinese market， thereby gaining their valuable recognition. But how about other foreign brands? How are they doing in China? What is their popularity among Chinese consumers?China: A promising marketJust before the New Year， the reporter visited the flagship store at Madian of the Chinese electronics retail giant GOME， where many consumers were choosing their favorite electric appliances. Enticed by the approaching New Year and various sales promotions， GOME saw an increase in the amount of customers. The New Year signifies hope and many wish to buy TV sets， mobile phones， washing machines， etc. while some just want to replace the old with the new.It is important to remember that China is not only a major producer of consumer electronics， but also the second largest consumer electronics market in the world. Over the past few years， multinational companies have been transferring their research development branches to China. At present， China has become an indispensible part of the consumer electronics industry chain in Asia， and the world at large.“China will be the fastest growing market for consumer electronics. The average growth rate of China’s electronics retail sales reached 8 percent. It is predicted that the sales volume will rise to €180 billion in the next 10 years，” said Roland Weise， the CEO of Media Saturn， the leading consumer electronics retailer in Germany and all of Europe. Its flagship store， Media Market， just opened in Shanghai in last November.“Currently， the purchasing power of Chinese consumers is soaring， which offers us a golden opportunity to enter the domestic market. As one of the leaders in consumer electronics， and in cooperation with Foxconn， Media-Saturn is taking its best chance to seek the great potential in this market，” he added.With the recovery of the global economy， and the policies of “home appliances going to the countryside” and “old for new”， China’s consumer electronics retailers are seeing continuous growth. Both GOME and SUNING， another leading electronics retailer throughout China， are embarking on ambitionous expansion plans.The above chart shows that after a decline in Q2， 2010 due to the economic environment， consumer income levels， expendable income and purchasing intent are all on the rise， indicating that their confidence is recovering.Various foreign brands have begun to spare no effort in their march to enter the promising and booming Chinese market. There is hardly any type of appliance category where you cannot find a foreign brand. From traditional home appliances， like TV sets and refrigerators， to IT products， digital products， and others; foreign brands are trying their best to allure Chinese consumers from all levels.“With the rise of the consuming capacity， Chinese consumers’s purchasing power is incresing. So is their brand awareness. Now choosinig products of global brands is becoming a trend，” said Qu Wenchao， the manager of Advertising Department of GOME Beijing Branch.A review of foreign brandsStatistics show that in terms of sales volume among the top 10 brands for color TVs， air conditioners， refrigerators and washing machines， domestic brands definitely hold a leading position far ahead of foreign brands， and possess a much larger market share. In the areas of MP3， MP4 players and water heaters， there is no significant difference between domestic and foreign brands with respect to market share. However， in the top 10 brands for notebook computers， mobile phones， digital cameras and camcorders， in terms of sales volume， foreign brands have been performing better.“Haier and SIEMENS are the two giants in white goods， and foreign brands like SONY， SAMSUNG， LG， SHARP， and domestic brands like Changhong， TCL， KONKA and Skyworth， hold most of the black business”， said Mr. Yang， the Madian store manager of Dazhong， another electronics retailer giant in Beijing.Looking at home appliances for instance， statistics from the Baidu Data Research Center indicate that among the top 10 brands， domestic and foreign brands both have equal shares. Overall， domestic brands are doing better as they hold the top 4 positions. Foreign brands like SONY， Panasonic， SAMSUNG， SIEMENS and PHILIPS are also on the list， of which SONY is given the most attention (3.5%) by netizens.Another example are small home appliances， where a report shows that today domestic brands dominate the market while foreign brands， which were once flourishing， are seldom seen.However， in digital cameras， it is just the opposite. The market is dominated by Canon， SONY， Nikon， OLYMPUS and SAMSUNG. Only a few domestic brands like aigo and lenovo have any sizeable market share.As for washing machines， a survey by Zhongyikang， a marketing research firm， shows that the active players in the market are Haier， LittleSwan， SANYO， Panasonic， LG， Whirlpool， SIEMENS， SAMSUNG and Midea， with Haier and LittleSwan as the market leaders.Concerning conditioners， LG， Mitsubishi Heavy Industries， DAIKIN， Panasonic and Electrolux are competing withdomestic brands. As for LCD TV market， according to an analysis from GFK， starting in the second half of 2008， the competition between domestic and foreign brands changed dramatically in China. The share of foreign brands shrank quickly and the position of Chinese brands increased in response.In the field of laptop， foreign brands like DELL， Apple， HP， SONY， TOSHIBA， SAMSUNG， are performing well.Referrng to cell phone， NOKIA， MOTOROLA， SAMSUNG， Apple， Sony Ericsson， SHARP， LG， BlackBerry and PHILIPS are the main foreign brands in the market.Foreign brands’ popularityThough domestic brands and foreign brands vary in their strengths and market share， when looking to foreign brands， most Chinese consumers still have the impression that they stand for higher quality and better performance. The word“quality” is the one most heard from consumers.“High quality of foreign brands is the main factor that leads to consumers’ purchase，” said Qu Wenchao. Foreign brands are leading in technology， research development and brand building， with their products on the environmentfriendly and energy-saving trend， thus affecting and pushing forward the development of China’s consumer electronics. Pan Chunyu， a recent graduate， was accompanying his grandparents at the store w h e n t h e reporter met him. He said that almost all his electronic products were foreign brands， including his mobile phone， laptop， and MP3 player. When asked why he was so attached to foreign brands， he replied，“Quality is the most important and in my impression， foreign brands are usually superior in quality， compared with domestic brands. That’s why I prefer foreign brands. ”His retired grandpa， in his sixties， was looking to buy a TOSHIBA or SIEMENS refrigerator. His last one， made by Haier， did not work very well and needed constant repairs after being used for just a few years. “Though they do not lose to foreign brands in aftersales service， domestic brands should do better in quality，” he said. He used to own a Panasonic TV， which performed well for over 20 years. In his time， Panasonic was so popular that several generations in his family used the company’s products. Today， his washing machine is still a Panasonic.Ms. Sha also believes in the quality and reputation of foreign brands. She told the reporter her three notebook computers were either IBM or SONY， while her TV set was a Toshiba. “To me， price is not that important， while quality comes first.”Mr. Lu， in his fifties， said he had a Panasonic refrigerator that he bought 20 years ago and that it had always been working well until recently. He had such deep affection for Panasonic that he bought a 46-inch plasma TV from the electronics manufacturer just a few of days before， in addition almost all of his electronics are foreign brands.Ms. Liu feels that foreign brands usually offer better performance due to their higher price. She once had a Panasonic washing machine which served her well for 15 years. Now she has changed to a high-power and water-saving Haier. The refrigerator in her house is also a Haier， her TV set was made by TCL and she also has a low-priced 32-inch Tsinghua Tongfang. Her soymilk maker and pressure cooker are also domestic brands， which satisfy her use of everyday appliances.Mr. Chen is also on the side of domestic brands. All of his electronics are domestic except a VCR which he bought years ago when most VCRs were foreign brands and he had a limited selection. Today， he believes that domestic brands are no longer inferior to foreign ones.Ms. Zhang was in the middle of buying a domestic brand mobile phone when she said， “Only when buying major appliances will I consider a foreign brand. Things like phones are likely to be changed frequently， so domestic brands can easily meet my needs.”While Ms. Zhao added that most of her appliances were made by Haier， whose after-sales service was very appealing to her.“As for kitchenware like microwaves and gas appliances， domestic brands have taken the lead. But recently， other foreign brands like SIEMENS have been entering China and we can feel some of the pressure，” said the salesperson for the major kitchenware producer， FOTILE， at SUNING.“Foreign brands are well accepted by Chinese consumers. Above all， consumers buy products by foreign brands due to their great brand recognition; secondly， some people simply follow others’ recommendations; and thirdly， there are those that buy again after experiencing the products themselves，”concluded Mr. Yang.Foreign brands’ competitive edge“Foreign brands’ strengths are mainly research development of new products， utilization of new materials and technology，” Qu Wenchao said. However， China’s brands are making progress in research development， with some of their high-end products reaching international level.Domestic brands still lag behind foreign brands in digital products， particularly new and advanced technology， said Mr. Yang. For instance， Apple is establishing market trends while domestic products tend to follow its lead. Foreign brands not only have an advantage in this area， but also in smartphones and tablets， where domestic products seem to appear a little later.Foreign brands leave the impression of higher technology and better performance with Chinese consumers， while each brand is trying to foster its key competitive power in the Chinese market.Whirlpool launched its new pureness series washing machines in 2010 and for the first time， emphasized the“health” of its washing machines. Whirlpool was the first in the market to focus on the cleanness of the machines themselves. This new concept， breaks from the traditional idea of a washing machine’s use to exterminate the bacterium on clothes， but instead it also creates a clean and healthy environment for washing clothes.The iPad is known for its stylish look， unique operating system and humanized design， its Retina display screen with LED and ambient light sensors can automatically adjust the brightness to produce the best visual impact and ensure the longest battery life. But most important are Apple’s ideaology and its products which are ahead of their time. During the interview， a woman bought 4 of the iPod Touch as New Year presents for her company.Su Peiran， a postgraduate， bought an American-made iPhone online through an agent. “I love it due to the variety of software and its high sensitivity. It’s just cool，” he said.Statistics show that SAMSUNG holds 16% of the TV panel market and LG 15%. “These panel giants have mastered the core technologies，” the salesman， Mr. Li told the reporter.Most of the interviewees had NOKIA phones. As for them， NOKIA means durability， which is the most frequent word the reporter heard when talking about the phones. Some of their phones have even been in use for over four years. Moreover， NOKIA offers a variety of products at different prices to meet different consumers’ needs.Voices from salespeople and consumersThough foreign brands are maintaining their competitive edge on the market， in some sense， there is still room for improvement as consumers continue to have concerns such as price， after-sales service， design， products updating， etc.The brand BARUN is renowned for its small home appliances. “Though its quality is beyond question， for Chinese consumers， the price is indeed a little higher，” Ms. Cao， a salesperson， told the reporter.“If consumers can afford to spend more money， they tend to choose foreign brands，” Ms. Liu said. Ms. Zhao also thinks the prices of foreign brands are comparatively higher.As price is a major concern， consumers may think twice before a purchase， making the best advantage of domestic brands’ their lower price.Ms. Liu feels that the maintenance network of some foreign brands is insufficient. “Sometimes your product breaks down， and you have to send the product far away to the brand’s headquarters in China， which is very time-consuming.”“The response of foreign brands’ after-sale service has room for improvement compared to domestic ones，” said Qu Wenchao.HP used to be affected by quality problems with some models like the V3000 series. “Sales were affected after that. Now that our service is reshaping， sales are turning for the better，” said the salesman， Mr. Han.In the MP3 and MP4 players section at Dazhong， Philips is positioned next to a few domestic brands like Aigo and Newsmy. “The PHILIPS MP3 player is monotonous in its outer appearance， while its MP4 player has a smaller screen than the competition and a higher price， so the sales are not as good when compared to domestic brands，” the salesperson， Ms. Zhao said.Electrolux air conditioners are well known for their high cost performance. “Even now it lacks a conversion air conditioner model in China， which will be a future trend，” a salesman told the reporter.The market for conversion air conditioners is currently dominated by Midea， Hisense， GREE， Haier， DAIKIN， Mitsubishi Electric， Panasonic and AUX， according to a report from Zhongyikang.As for Apple， some consumers are not used to its unique system and would like to change to Windows， a salesman said. In addition， online transactions are not compatible with some domestic banks now and then.An old man was buying a mobile phone. He didn’t care if it was a domestic or foreign brand. “As long as the characters showed on the screen are large and I can make calls and listen to the radio via the phone， I will buy it，” he said.The salesman， Wei Chunsong， in charge of Whirlpool at the GOME store， told the reporter some of the products were sold by word of mouth. Consumers get to know a product’s high quality from relatives， friends or others. “Since Chinese consumers are likely to be affected by advertisements， the sales would be better for Whirlpool if the brand was advertised more.”“The problem areas for foreign brands are their higher price and lack of low-end products. However， things are changing. Foreign brands have gradually begun to develop low-end products. In addition， the after-sales service of some foreign brands is insufficient，” Mr. Yang concluded. Dazhong will continue to stock foreign brands， which will be given the same treatment as domestic ones.With such a huge market and their increasing share in certain market segments， foreign brands will keep on seeking larger market share and a better future in China， he added.If enhancing cooperation with China’s household appliances chains， paying more attention to production localization， developing and producing goods tailored especially for Chinese consumers with lower price， foreign brands will enjoy a promising future， said Qu Wenchao.
