- April 13, 2017 Economy
How China’s Largest TV Maker Invested in Georgia to Globalize its Brand
This case tells the story of Hisense, a state-owned Chinese television manufacturer whose name first hit the headlines in 2016 when it arranged to buy a factory in Mexico from Sharp and then licensed the Japanese brand for five years in the North and South American markets. With virtually no brand visibility, Hisense is, in a sense, the “largest technology company that no one has heard of,” according to the self-deprecating tagline used by the Chinese company’s own American subsidiary.
Read English Yet this Chinese brand’s sheer obscurity belies the fact that it actually has had a presence in the American market for about 15 years. Indeed, its relative anonymity among American consumers owes much to how the company has operated and evolved in the United States.
Until, recently, Hisense has primarily been an original equipment manufacturer (OEM) for firms like Hitachi, Dynex, and Insignia, many of which are in-house brands of retailers such as Sears and Best Buy. In other words, Hisense mostly made TVs for other companies’ brands but had no distinctive brand recognition itself. But Hisense USA recognized this branding deficit. And so, more recently, the company has begun to focus on laying the groundwork for a strategic shift from an OEM to having its own branded products in the US market.
That is the story that lies at the core of this case study.
Hisense USA established its US beachhead in the southeastern state of Georgia, which the company has called home since relocating from Los Angeles in 2007. From its Georgia base, Hisense has aimed to further develop its branded products for the US market and be closer to the consumer. But building a brand from scratch as a late-comer in a mature market is no easy feat. And for Hisense, the challenge has been made more difficult because televisions are a product with low margins.
Unlike other cases in this series, this study of Hisense’s efforts in the United States does not dwell on the transaction itself but focuses instead on how a Chinese company has tried to brand itself, market its products, and ultimately compete successfully in the US market. The fact is, most Chinese consumer-facing companies today still struggle with the essential ingredient for success in the US market—namely, becoming a true global brand.
This case explores Hisense’s effort to plant a foothold in the US market in the aftermath of its initial investment. It provides a corporate history, detailing Hisense’s evolution from a local state-owned enterprise to one of the world’s biggest TV makers. More important than the Georgia investment itself, the case primarily examines the rationale behind Hisense’s globalization plans, its branding and localization strategy in the United States, and how it has sought to position its own technology to gain market appeal.