China’s largest television manufacturer is reviving its push to become a brand leader in the U.S., intensifying its outreach from its base in metro Atlanta.
As it approaches the billion-dollar mark in U.S. sales, Hisense, the Qingdao, China-based maker of flat screens and appliances, now wants to compete on innovation and quality rather than its traditional differentiator: price.
“Our competitiveness is our speed of adopting technology into the products,” Jerry Liu, the company’s CEO for the Americas region “from Argentina to Canada,” told Global Atlanta.
Hisense has long stacked up to competitors like Samsung, LG and Sony on quality, Mr. Liu said in an interview. The trick is persuading customers, and that seems to be working: The company hit record sales in the second quarter of this year, inching closer to its goal of jumping from No. 8 to No. 3 in market share.
“We understand that when the information is very easy to get, and people can make their decisions and compare the products, we have a chance,” Mr. Liu said. “Step by step, our brand awareness is growing.”
Over the years, Hisense has been a perennial presence at the Consumer Electronics Show, where companies show off their latest and greatest gadgets. But that hasn’t translated into market domination. The Chinese brand now has about 5 percent of the U.S. television market — 8 percent including sales under the Sharp brand, which Hisense has licensed through 2020.
A continued focus on new technology, paired with a new marketing push, could help Hisense eat away at more established players. Instead of white-labelling — producing TVs under other brand names — Hisense is now investing heavily in its own mark.
“With the globalization of the company, we’ve put more and more ingredients from other countries to this brand, so it’s not only a Chinese company, it’s an international company,” Mr. Liu said.
The New Showroom
Being a Chinese company no longer carries a stigma on quality, Mr. Liu said, but the company tries to put on a local face everywhere it operates.
At its decade-old base in Suwanee, that effort has translated into new 5,000-square-foot product showroom unveiled in early October.
The space is outfitted with the latest in 3D and 4K television technology, along with one-of-a-kind 100-inch laser projection TVs. It shows off Hisense’s sports sponsorships including the 2018 FIFA World Cup and NASCAR. An appliance alley within the loft-like space includes wine refrigerators, air conditioning units and commercial coolers.
Mr. Liu said he was inspired by tech-savvy partners to transform at least one space in Hisense’s “boring” former law office with a few “fresh and cool” trappings of Silicon Valley.
“Because of our relationship with Google, Amazon, every month when I go to West Coast, I like their atmosphere, so I brought my marketing guys to see that in this industry we need to learn and refresh ourselves,” Mr. Liu said in an interview.
The showroom, he told Gwinnett County officials and other visitors during a grand opening event, also embodies a new outward focus for a company that Mr. Liu said was too insular when joined the company more than two years ago from a similar position as general manager of the Middle East and Africa.
“We will do more for the local community,” he told the audience before drawing winners of air conditioners and TVs raffled off to raise money for relief funds benefiting recent storms in the U.S. and the Caribbean.
In the past, the company was also too heavily staffed with Chinese engineers, he said, who are vital to building quality hardware but aren’t always best suited to tell the brand’s story in a new, complex market.
“I think from the culture side there was a gap, so we did some restructuring of the company and I got more local talent joining us,” Mr. Liu said. “When you go out of China you need to think about how to use local talent well, not only think about all the ways you did business in China. That’s the difference.”
Mark Viken, a vice president who came over in the Sharp deal, said he’s found Hisense to have a mindset more similar to that of Americans than his previous bosses.
“While it’s a $16 billion global company, here in the U.S. it’s still very much a startup, which makes it fun,” Mr. Viken told Global Atlanta at the grand opening.
Metro Atlanta has been fitting for this shift, with its steady stream of talent churned out by corporate giants like AT&T and Home Depot. Some staffers recruited from Panasonic have helped Hisense adopt the highest electronics standards. Playing in the U.S. market means the products will hold their own anywhere in the Americas, said Mr. Liu, who praised the U.S. for its business environment.
“If you have good technology, good products, you can quickly grow the business. In some countries, it’s a relationship-driven business. You need to spend a few years to build the connections,” Mr. Liu said.
Connections have helped Hisense during its global expansion. The company sells beverage coolers to Pepsi and in China operates a joint venture with Johnson Controls to make industrial air-conditioning systems. To develop the laser TVs released this week with a price tag of $9,999, it used chips designed by Texas Instruments.
Acquiring a Sharp factory in Mexico and access to the well-known Japanese company’s brand for $27.8 million was another pivotal move. While Taiwan-based Hon Hai Precision Industry Co., also known as Foxconn, later bought a controlling interest in Sharp for $3.5 billion, Hisense has refused to give up the license it procured in the U.S. (Sharp has since sued Hisense, alleging the Chinese company has taken its patents, misled consumers and made shoddy Sharp-branded products, all charges Hisense denies.)
Mr. Liu said the Mexican factory has been a boon, with upgrades that have tripled Sharp’s capacity by the second year in operation. That has offered both speed and adaptability to complement the company’s strong local R&D team and global manufacturing expertise, he said.
He doesn’t worry about changes to NAFTA, which threaten new tariffs that would upend supply chains across the U.S and Mexican border.
“I can move that factory within one month. I did it before in other countries,” he said.
In the meantime, Hisense has become one of few manufacturers to develop its own module for Internet-connected “smart” TVs, and it’s working more closely with streaming services such as Hulu and Netflix to integrate them into the viewing experience. Hisense also offers Roku TVs, which use hardware from one of the market leaders in set top boxes.
“I think one of the successful experiences is working with local companies deeply to do long-term investment plans, not short-term. That’s the difference between us and some other Chinese companies,” Mr. Liu said.
Helping Georgia in China
Hisense could play an indirect role in showcasing Georgia as a U.S. beachhead at a key time when Chinese tech giants are spreading their wings globally.
Since 2013, Hisense has hosted Georgia’s foreign-investment office at its Qingdao headquarters, which state leaders will visit once again in early November.
Another massive Chinese investment, a more than $500 million tire plant in LaGrange, is planned by Sentury Tire, another Qingdao company that state leaders will visit once again during their upcoming China trip.
Nick Masino, chief economic development officer of Partnership Gwinnett, said Hisense’s sustained presence in metro Atlanta shows the region’s competitive edge.
“Metro Atlanta is the tech hub for the southeast U.S., which is why Hisense chose the region for their Americas headquarters over a decade ago,” Mr. Masino said in a statement. “We are thrilled to have Hisense here, contributing to that, we look forward to working with them in the years ahead and for their continued success and growth.”