Haier America is moving beyond its base of utilitarian white goods in an effort to tap into robust market demand for fully featured, premium major appliances.
Leveraging the production and technological prowess of its Chinese partner Haier Group — already evident in the company's highly regarded line of wine coolers and beverage dispensers — the white- and brown-goods vendor made a splash at last month's International Builders' Show with new higher-end laundry and refrigeration entries.
"We had the best Builders' Show ever," said president/CEO Michael Jemal from his headquarters deep within an historic bank building in midtown Manhattan. "We've never been so busy."
The cause of all the hoopla was Haier's new side-by-side refrigerator with a bottom-mount compartment that can be converted from a freezer to a refrigerator, depending on the consumer's immediate food and entertainment needs. The unique configuration is offered in three steps, with a top-of-the-line model that features quick-freeze and quick-chill modes, a wine rack and a suggested $2,500 price point. The units are available in white, black and stainless-steel finishes, and all boast variable speed compressors.
Also introduced at Builders' Show was a counter-depth French-door fridge with a bottom-mount compartment that's segmented into two separate drawers, allowing consumers to better organize and find frozen foods. The 21-cubic-foot stainless model is priced to retail for $2,000.
Sharing the spotlight in laundry was Haier's new Genesis series washer, an energy-efficient, 3.5-gallon top loader with a unique, agitator-free cleansing action in which the drum rotates in the opposite direction of a spinning bottom plate. The effect, says Haier, is gentle on fabric but ruthless in removing dirt and suds. The line features push-button controls and LED display, and a choice of red, black and white finishes. The top model in the good-better-best price step is positioned to retail for $699.
Aside from proprietary feature sets and premium looks, all of the pieces share two critical elements, said industry veteran and recent Haier hire Warren Mann: clean distribution and rich profit potential.
Indeed, the company's strategy is to first offer the new programs exclusively to the independent channel, which would enjoy a six-month lead time before national chains could participate. By then, new SKUs would succeed the previous models, keeping independent dealers one step ahead of their big-box competitors.
Equally important, the new products represent "a very profitable line for dealers," said Mann, who previously sat on the other side of the bargaining table as managing director/CEO of the World Merchants Buying Group, executive director of the MARTA Cooperative of America, and group director for the NATM Buying Corp.
Mann joined Haier last month to lead its independent channel sales efforts, and has since been promoted to sales VP for major appliances. He is presently building his sales team with other industry pros, including former LG majap man Brad Lafferty, to support the company's expansion plans.
Jemal promises even more surprises at the upcoming Kitchen/Bath Industry Show (K/BIS) in May, where Haier will herald its upscale initiative in white goods with additional product introductions and a revamped exhibit space.
To support the new direction, Haier will open a research and development facility at its Edison, N.J.-based distribution center and showroom in May that will support engineering, testing, design and other R&D functions. Within two years the company will move the facility to a larger freestanding location and will expand its scope to include tooling and molding. The R&D offices will support Haier's manufacturing plants in Camden, S.C., which the company opened seven years ago when it began laying the groundwork for the expanded majap assortment.
The majap moves represent a sea change for Haier, which established its U.S. presence by supplying basic room air conditioners, compact refrigerators and small CRT TVs to national discount chains, home improvements stores and warehouse clubs, a business it will continue to support.
Haier's upscale aspirations in white goods are part of a comprehensive brand building program that is also emphasizing the billion-dollar company's technological and production capabilities in flat-panel TV and wireless communications. Haier operates 100 factories around the world, sells nearly 1 million flat-panel displays and 20 million wireless handsets annually, and secures some 1,000 patents each year, Jemal said. Its most recent innovation, which will be introduced at this week's CTIA Wireless show in Orlando, Fla., is a Wi-Fi- and Bluetooth-enabled, 30GB personal media player that is positioned to do battle with Apple. The $349 device was developed in concert with AOL, which will provide content along with digital music distributor Real Networks.
"It's a big deal for our company," Jemal said. "It demonstrates our capabilities."
To further communicate the company's breadth and depth, Haier has embarked on a $15 million advertising campaign that includes shelter book print ads and its first-ever TV spots. The commercials, which debuted during last month's NBA All-Star Game, depict a typical American home that's filled with a panoply of category-spanning products. All carry the Haier name, and both Jemal and Mann are adamant about keeping the faceplate on all of the company's white and brown goods, rather than dilute it with sub-brands.
The Haier name will likely become even more familiar to consumers worldwide through the company's official sponsorship of the Beijing Olympics in 2008.
Jemal says the upscale initiatives are now in their second year, and that tens of millions of dollars have been spent on the effort. "It's a comprehensive push," he said, with the goal of becoming a multibillion-dollar business by 2010 with a near 10-percent market share in every category in which it competes.
"We're building the brand and filling out our product lines," he said. "We want to be a recognizable and a requested name."