1

I. Localization Timeline
In order to build a famous brand name
and improve its products quality,
Haier has gone through many stages
in its localization strategy in Indian
market.
Haier was launched in India in 2004,
Banerjee wanted Haier to be in the top
three brands in the home appliances in
India .To achieve that position in the
market Banerjee pushed for the
localization strategy.

2004: Haier was launched in India in 2004. The company first operated in the Northern part of
India. Within the first 5 year, low end products (color TVs) were outsourced to local companies
and the high end products were imported. The low end products were not left completely to the
local companies but demanded high quality standards that Haier had. Since these first step in
India, Haier was aimed to gain 20% market share by 2009 and become one of the top 3 brands in
India.
2007: Instead of making bold moves and executing rapid localization, it took a step-by-step
approach, Haier adopted three in one localization strategy in which R&D, manufacturing and
marketing was done in local way.
Situations in other countries were slightly different. . In US, full version of Three in One strategy
opened. The Marketing Centre is in New York, the Design Centers is in Los Angeles and the
Manufacturing Center located in South Carolina In USA, Haier exported products through
scattered channels and then arrived at a common channel. After this it implemented the
Localization strategy. But whereas in India, India it was only one manufacturing factory in Pune
for assembling washing machines & ACs, which was aimed to become a supplying hub for other
countries in Africa, Middle east & southern & western Asia. And it started with the Localization
strategy and then made a foot print in the market through other strategy of entering the mass
markets.
2010: Haier invested USD22.2mn to upgrade its factory capacity in order to manufacture
new and good quality products and increase gross margin. Furthermore, the company launched a
marketing program called You Inspire Us, in which it projected itself as a global brand
delivering latest technology and marketed its products as premium.





Localiza on Timeline
Started opera on
in Northern India
Outsourced low-
end products
Imported high-
end products
2004
3-in-1 strategy of
localiza on.
Launched a
manufacturing unit
at Pune - a sourcing
hub for other
regions
2007
Enhanced
products quality
and quan ty
Established global
brand image
2010
20 % white
good market
share in 5
years
Top 3
brands
in 7 years
2
II. Localization
strategy
As to be more specific, I
will be presenting a
number of significant
element in Haier entry and
expansion strategy in
India. But first of all,
could any executive help
me to point out some
important strategies
launched by Haier in its
early stage in India?
Thank you for your
answers, so to move on,
lets have a look at these 5
major elements of Haier strategies in Indian market.
ALLIANCES- Haier established a joint venture company in the sale and production in India in
1999, and r established an Indian factory by Haiers owned 100% in 2004, It started local
production of air conditioning for the Indian market. Then, Haier was aim to Virtuous and
whirlpool work together, and started the local production of air conditioning for the Indian
market.
LOCAL MANUFACTURING: This is in line with the 3 in 1 strategy Haier was implementing,
in which R&D, manufacturing and marketing were carried locally according to the local
demands. Indeed, Haier used local human resources to establish business. As a result, local
manufacturing helps in reducing timelines for other markets.
PREMIUM PRICING- Several Chinese manufacturers who entered India priced their products
low by compromising on quality, thinking that Indian consumers preferred to buy low priced
products irrespective of their quality. This gave Indian consumers the impression that anything
"made in China" would be cheap and of poor quality. However, Haier went on with pricing
strategy which is above market premium price by 5% and focused on value war rather than price
wars.
PRODUCT QUALITY The company did not compromised on quality and offer innovative
products. Haier introduced a comprehensive range of products in India to cater to the needs of
different consumer segments. While its competitors introduced one product after another, the
company flooded the Indian market with several new products like bottom mounted refrigerators
and detergent free washing machines. Haier also launched mobile phones and unveiled plans to
bring out laptops.
SIMPLE COMMUNICATION: Haier spent a considerable amount of time on deciding its brand
strategy for Indian markets. Initially, the focus was on the fact that it was a global brand
delivering the latest technology.
Overall, Haier strategy is to be out of crowd, not to be in price war, Innovation, Adapt
Localization.
Localiza on Strategy
ALLIANCES
Lloyd Corpora on (1999)
Whirlpool and Voltas (2004)
LOCAL MANUFACTURING
Manufacturing plant with local staff
PRODUCT QUALITY
Premium Quality
PREMIUM PRICING
5% higher than compe tors
SIMPLE COMMUNICATION
A global brand delivering the latest
technology
3

II. Pre-Braganza State
I am sure you all know who he is.
Can you say his name then? ..
This is T.K. Benejee, who was
appointed as Haier Indias President
and CEO in 2004 when the
company first started its operation
in the market. He was the one who
push the launch of localization
strategy in Indian market. However,
besides positive effects of extensive
branding and manufacturing
campaigns, establishment of a factory and localization changed perception of people that Haier
was a non made-in-china product, the company still faced with many issues due to the drawbacks
of its strategy. So could you one more time, identify what went wrong in this Pre-Braganza State?

LATE ENTRANT Drawback of late entrant in market, Entered India almost 7 years after its
rivals LG and Samsung. At the time, the Indian white goods industry was already in the
consolidation phase, with three to four firms dominating each of the segments.
PREMIUM PRICE POLICY Premium price policy kept away from massive market
segment. Additionally, heavy taxation policies lead to decrease in profit margin which resulted in
decrease in demand. Thus, the company had low market share.
POOR RETAIL INFRASTRUCTURE: Haier consistently worked towards building its brand
and developing distribution network in India, however, the company still relied heavily on local
retailers and also third-party dealer networks to market their products in either urban or rural
areas.
POOR AFTER-SALE SERVICE: Poor After Sales Service due to lack of service centers, and
due to unavailability of spare parts in them.
HIGH COMPETION: High competition from Korean vendors in price. After taking hold of the
low priced market, LG later seeped into the medium -end segment by offering feature -rich
products and branding itself as an "inspirational brand".
Samsung on the other hand while initially launching products ,later crossed into the mass market
and released more price-sensitive products ,aiming for leadership in both the premium and large -
volume categories.
The Korean giants believed in R&D. The allocated some amount of the budget to R&D, so that
they understand the market better and come up with products suitable for the Indian consumers
and the situations.
STAGNENT GROWTH It failed to achieve the set revenue targets. It could gain 3.5% share of
the market vis--vis the target 15%.

Pre-Braganza State
Late Entrant
High compe on
Premium
Price Policy
Poor A er-sale
Services
5. Poor Retail
Infrastructure
Stagnant Growth
T. K. Banerjee
Haier Indias
President and CEO