Chinese electronics brand localizes quickly to establish itself in US

With the holiday shopping season at its peak and New Year's right around the corner, Hisense USA, the US subsidiary of the leading electronics brand in China, is gearing up for a harvest of its smart TVs and a series of other innovation-loaded products.

A simple search of "Hisense" at Costco Warehouse's website brings up one of the company's newest models - the 55-inch 4K Ultra HD Smart TV at $1,999, which is also displayed at Costco stores, alongside well-established brands such as Sony, Samsung, and Sharp.

At the upcoming International Consumer Electronics Show(CES) in Las Vegas in early January, Hisense USA will unveil its most revolutionary smart TV model, the Vidaa, according to Lawrence Li, CEO of the Georgia-based company.

"Consumers have complained about smart TVs being not smart due to the current models' poor user-interface performance. People have to go through layers of interface in order to locate what they want, say, cable TV channels. Vidaa is designed to change that," said Li who has been CEO of Hisense USA since 2007.

According to Li, the Android-based model would have four modules on screen, or in Li's term, silos, including Video on Demand, Cable TV, Internet, and My Media Resources, which include all stored photos and videos in one's computer. Users only need to press a single button on the remote control to switch between functions while keeping what they have been viewing or browsing.

Earlier this year, Hisense USA bought a software development arm from Flextronics, a leading electronics manufacturing supplier listed on the Fortune 500, which has given the company the technology edge to come up with the platform that Vidaa is based upon.

"The US market has the most advanced technology and is most competitive. If a product can sell well in the US, it has a better bet in the global market," Li said. "The US operation is therefore at the very top in our parent company's global strategy."

With investment from headquarters, Hisense USA has aggressively expanded its own research and development team from a 10-person shop last year to a corps of about 50, with most being locally-hired veteran software engineers from other leading brands. Li now manages more than 100 employees and said he will grow his research arm to 80 people in 2014.

"On any given day, you find me talking to the engineers down at our research department. The best way to market the product is to understand and use it," said Jonathan Frank, vice-president of marketing, who joined Hisense USA in March after working for Voxx International and Panasonic.

Frank acknowledged that he had never heard of Hisense before taking the job. Even though Hisense is the No 1 TV brand in market penetration in China with about 70,000 employees worldwide and products sold in more than 130 countries and regions, it is virtually an unknown name in the US when it set up an US operation 13 years ago.

Instead of selling Hisense brand directly, the company started by making products for leading brands as Original Equipment Manufacturer (OEM), including Whirlpool, GE and Electrolux.

"We spent eight years learning about the US market and its consumers' habits through this OEM process. It is worth the wait," said Li. The company launched its own brand sale campaign in 2009.

H.h.gregg, a regional retailer of consumer electronics and home appliances covering about 20 states, was the first to embrace Hisense. To their surprise, more than 30,000 TV units were sold within one month to rave customer reviews. Warlmart, Costco, Sam's Club, and others gradually followed.

Warlmart now has five Hisense TV models in stock, with two of them among the top 10 best-seller TV units and the total sales doubled compared to last year, according to Li.

Starting this year, Hisense USA has ventured into the hot tablet and mobile market. Its tablet has sold 750,000 units at Walmart. Two sub research divisions have been set up in Silicon Valley to advance innovation in the two fields.

The company also is taking advantage of Hisense Group's strength in home appliances. Its dehumidifier is now sold at Lowe's nationwide and air conditioners at some regional retailers.

Hisense USA is a welcomed citizen in Georgia. In fact, the state established its second representative office in China earlier this year, right at the 14th floor of the Hisense headquarters building in Qingdao.

Li said Hisense is considering building manufacturing base, likely in Georgia. The parent company already has manufacturing operations in South Africa, Algeria, and Egypt, outside of China.

Even though it took Hisense more than eight years to surface in the US market, Frank is determined to make Hisense a household name in the US in three years.

"We do very well as it is with little brand recognition. Once we get to where I want us to be, a household name, we will have tremendous success in North America," said Frank.

Calling himself non-traditional when it comes to marketing, Frank has taken aggressive approaches to make the Hisense brand known, including advertising at the US Open (Tennis). Hisense will be the only TV brand featured at Wired magazine's pop-up store in New York in December to showcase advanced technology in consumer electronics.

"We always say that we are like a start-up company with a big backing company," said Frank, "Everyone who works here really takes the company's interest at heart and we all share the same goal."

And the goal, as Li put it, is to "be in the top three TV brands in the US in five years."

charlenecai@chinadailyusa.com

(China Daily USA 11/30/2013 page10)