Chinese home appliance makers are accelerating steps to expand their presence in the Middle East and Africa, and looking to enhance brand awareness and boost product sales by sponsoring or providing products and technologies for the ongoing FIFA World Cup in Qatar. Data from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products’ home appliances branch showed that China’s exports of home appliances to Qatar rose more than 10% year-on-year in the first 10 months. Meanwhile, China’s exports of color televisions to the 22 members of the League of Arab States, including Qatar, soared 29% in the January-October period from a year earlier, while the exports of white goods jumped 11.21%.
As one of the official sponsors of the FIFA World Cup in Qatar, Chinese home appliance manufacturer Hisense Group is expanding its footprint in Middle Eastern and African markets. “The Middle East is one of our fastest-growing regions globally and serves as a crucial part in Hisense’s globalization strategy,” said Ou Yang, general manager of Hisense’s Mid- dle East and Africa Division, while noting that the company’s sales achieved a 31.5% year-on-year increase in 2021 in these regions despite the Covid-19 pandemic, price hikes in raw materials and soaring sea freight rates. Hisense opened its first physical store in Dubai, capital of the United Arab Emirates, in March, marking a strategic milestone in the company’s regional expansion. It plans to open 10 brick-and-mortar stores in the Middle East and Africa this year.
The Qingdao, Shandong province-based company hopes to enhance brand awareness and influence by sponsoring major sporting events around the world, including the UEFA Euro 2016 and 2020 tournaments and the 2018 FIFA World Cup in Russia. Ou said Hisense will strengthen its cooperation with FIFA and other institutions, launch tailor-made products and build stronger emotional relationships with consumers in the Middle East and Africa, as well as 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 build its own after-sales service and call centers in major cities of these regions. Sales revenue of Hisense in these regions has risen from CNY1.53 billion in 2012 to CNY9.37 billion in 2021, with an average annual growth rate reaching 25.9%,.
“The Middle East and Africa serve as important markets in the Belt and Road Initiative, presenting huge growth potential for enterprises to build self-owned brands and develop cross-border e-commerce,” said Zhou Nan, Secretary General of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products’ home appliances branch.
Liang Zhenpeng, an independent consumer electronics analyst, said sponsoring international sporting events like the World Cup has become an effective way for Chinese home appliance companies to promote brands and boost sales of products in overseas markets. “In the past, most Chinese enterprises adopted the original equipment manufacturer model, but nowadays they tend to build up their own brands in a bid to bolster competitiveness on the global stage,” Liang added.
Other Chinese home appliance makers, such as Midea Group and Gree Electric Appliances, have offered air conditioners and related services for the Qatar World Cup and stepped up investment in the Middle Eastern and African markets, which have shown soaring demand for high-efficiency heating, ventilation and air-conditioning systems. Midea has provided 2,500 air conditioners for 100 security check centers at the tournament venues and its central air conditioning systems have been installed at eight game venues, most of the media centers and some supplementary facilities. In 2010, Midea invested USD57.48 million to acquire a 32.5% stake in Egypt’s major air conditioner supplier Miraco to become the company’s second-largest shareholder. Many World Cup venues in Qatar, including the Education City Stadium and Stadium 974, and a fan village, are equipped with central air conditioning systems provided by Gree, with the total number exceeding 40,000 units.
In what appears to be an inevitable trend, Chinese home appliance manufacturers are expanding their footprint to overseas markets for new profit growth points and long- term development, as the domestic home appliance market is almost saturated, said Zhao Meimei, Assistant President of Beijing-based market consultancy AVC. Statistics from AVC showed that the sales revenue of China’s home appliances sector reached CNY338.9 billion in the first half, down 9.3% year-on-year.
Haier Smart Home, a subsidiary of China’s largest home appliance manufacturer Haier Group, entered the Middle Eastern and African markets in 1998. It has two industrial parks and three plants in African countries including Egypt and Nigeria. In August, the company announced its plan to establish an industrial complex covering 200,000 square meters in Cairo, Egypt, with a total investment of USD130 million. “Expansion into overseas markets will not only relieve the pressure of high inventories in the domestic market but will increase the international influence of Chinese home appliance companies,” said Dong Min, Deputy Secretary General of the China Video Industry Association, as reported by the China Daily.
