BERLIN/GUANGZHOU -- Chinese appliance makers sought to make a splash at Berlin's IFA electronics expo that began on Sept. 6, with players like Haier homing in on Europe as U.S. trade frictions grind on.
Haier showed off its washing machines and refrigerators, as well as those under the brand of its recently acquired Candy Group, at the trade show. Candy commands a roughly 70% share of the European market for internet-connected washing machines. The acquisition was "perfect" for boosting Haier's profile in the continent, Haier Europe CEO Yannick Fierling said on Sept. 5.
As they gain share in the European appliance market and seek further growth, Chinese manufacturers are investing in expanding their foothold in the continent -- such as in Haier's 475 million euro ($524 million) deal closed in January for Italy-based Candy. The Chinese manufacturer aims to offer the world's widest range of products, Fierling said.
Haier looks to replicate in washing machines the success it has found with air conditioners. Its share of the European air conditioner market surged more than 5 percentage points to 9.5% over the five years through 2018, putting it second only to Japan-based Daikin Industries' 14.9%, according to British research firm Euromonitor International. Haier sees room for similar growth in fridges and washing machines, in both of which its European market share has yet to break 5%.
Last autumn, subsidiary Qingdao Haier listed its shares on Frankfurt's China Europe International Exchange, or CEINEX. Its purchase of Candy, a long-standing brand, further raised the Chinese company's European profile.
Haier is not alone among its compatriots in focusing on Europe. A similar seismic shift is underway in televisions, a strong field for South Korean players like Samsung Electronics. In 2018, the European TV market shares of Chinese makers TCL and Hisense Group climbed into the mid-2% range, up from less than 1% half a decade earlier. That growth moved them closer to struggling Japanese mainstays like Sony and Panasonic, with shares of 8% and 6.3%, respectively.
At the IFA expo, TCL showed off TVs equipped with artificial intelligence. In the past year or two, the company has rapidly expanded in the continent, even entering the U.K., Greece and Poland, a European TCL executive said, building momentum while keeping prices relatively low despite added functionality.
Signs of weakness in their home market are one factor driving Chinese manufacturers to focus more on Europe. According to market researcher GFK, the Chinese appliance market -- which accounts for nearly 30% of the global total -- is set to shrink by 3% in 2019.
Trade tensions between Washington and Beijing have also clouded prospects in the U.S. market, making Europe all the more crucial. Hans-Joachim Kamp, chairman of German appliance and telecom industry association GFU, said the trade war will create only losers, with tariffs serving solely to drive up prices of Chinese goods in the U.S. market.
But the European market is not on entirely firm footing. Televisions face especially fierce cost competition that may drag players into a war of attrition. And with the German economy losing steam, manufacturers may feel the need to concentrate on stirring up demand in regions such as Eastern Europe.