Milano Design Week & EuroCucina 2024 Report
Domestic Companies Step Up to Counter China
Samsung's Han Jong-hee: "They Have Caught Up a Lot"
LG's Ryu Jae-cheol: "The Development Speed Is Fast"
Many Visitors Gather at Haier
Showcasing Concepts and Products Not Much Different from Domestic Companies
"(Chinese companies) are catching up a lot and have price competitiveness. It seems that European built-in appliance companies are also concerned." (Han Jong-hee, Vice Chairman and Head of Samsung Electronics DX Division)
"Launching good products and releasing them faster than competitors was the success formula we used in the past, but China is quickly adopting this method. The pace of development is quite fast." (Ryu Jae-cheol, President of LG Electronics H&A Business Division)
On the 17th (local time) at the 'Milan Design Week · EuroCucina 2024' held in Milan, Italy, a booth of Haier, a Chinese comprehensive home appliance company. [Photo by Han Yeju]
The status of Chinese home appliance companies is changing. The fact that the heads of Samsung Electronics and LG Electronics home appliance divisions specifically singled out China for caution highlights the noteworthy growth of China. Unlike the past when they relied on low-cost mass production, recently they have been enhancing their market competitiveness with technologically advanced products, causing a sense of crisis among Korean companies. It is especially expected that they will expand their influence even in the European built-in market, which has high entry barriers.
At the 'Milan Design Week · EuroCucina 2024' held in Milan, Italy on the 17th (local time), the remarkable progress of Chinese home appliance companies stood out. The fact that they brought products suitable for the global market rather than just domestic use created a different atmosphere from before.
The most eye-catching was Haier, a comprehensive Chinese home appliance company. The large crowd gathered at the Haier booth proved the high interest of European distributors in this company.
The Haier booth was arranged with displays of Europe-customized built-in appliances, energy-efficient products, and proprietary AI chips for home appliances. In fact, this was not much different from the exhibition direction of domestic companies such as Samsung Electronics and LG Electronics.
The main product promoted was an oven that reflected European consumers' interests as well as the trend of AI appliances. 'Bionic Cook,' which recognizes ingredients through cameras and provides recipe and cooking setting adjustments, as well as app alarms, demonstrated China's advanced technological capabilities. It was very similar in function to LG Electronics' new 24-inch Signature Kitchen Suite oven equipped with 'Gourmet AI' designed for the European market.
Aggressive local strategies such as acquiring European appliance companies were also evident. Haier is expanding its size through mergers and acquisitions (M&A) of General Electric (GE) appliance division and Italian appliance company Candy. At the exhibition, Haier emphasized integration by setting up Candy's exhibition hall right next to its own booth.
In product descriptions for refrigerators and ovens, it was emphasized that they are linked through Haier's dedicated app (hOn). For example, users can receive power outage alerts for refrigerators or cook using recipes suggested by the app. This is reminiscent of Samsung Electronics' 'SmartThings' or LG Electronics' 'ThinQ.'
Industry analysts evaluate that China remains an attractive choice in the global home appliance market due to price competitiveness. Moreover, with upgraded technology, they are reaching into the premium segment, indicating enormous potential. In fact, while Samsung Electronics and LG Electronics' home appliance divisions suffered from poor performance, Chinese home appliance companies showed high sales growth. Haier's sales last year were 261.4 billion yuan, and net profit was 16.6 billion yuan, increasing by 7.3% and 12.8%, respectively.
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