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Hisense aims to give Samsung a bloody nose in SA

Cape Town - Hisense is on a mission to disrupt the consumer technology sector in South Africa as the Chinese firm aims to take market share away from Samsung.

"Our model is we don't care what Samsung does in the market; we need to focus on getting the right efficiencies in our own business model and deliver the right product and the right quality to our consumers," Ebrahim Khan, deputy GM Hisense South Africa told Fin24 at the factory that employs some 500 local people.

The factory in Atlantis has the capacity to produce over 400 000 TVs per year and Khan said that the company is focused on delivering quality products and service to South Africans.

Hisense leads the Chinese market for televisions, but Sony, Samsung and others are making a concerted effort to claw away with technologies from 3D technology, curved screens, and 4K display.

Aggressive marketing

Khan said that Hisense had the capacity to bring high tech TVs to SA, but the current business model forced them to exercise caution.

"We can bring those technologies quicker, but we're deploying a different strategy in South Africa, but once we're close to being a market leader, we'll change the strategy."

On a media tour through the facility, workers were observed assembling TVs under the watchful eyes of Chinese experts who have been specifically brought in to teach local people the production process.

The company has also aggressively been marketing its products in retail stores where the price is typically lower than competing Samsung products.

Khan, though, argued that Hisense would not settle to scrap over the budget market segment for consumer electronics.

"We're already disrupting some of their [Samsung's] market share at the high end. Where people normally saw us as a price fighter, we're disrupting the segment in the market where it's not about price; where it's about technology and about brand. We're already making inroads where that's concerned according to the industry numbers."


Hisense workers install components on flat screen TVs at the factory in Atlantis. (Duncan Alfreds, Fin24)

Khan added that after sales service was an important strategy to convince South Africans to adopt the brand and differentiate from Samsung.

"Also, from a service point of view, we are already starting to differentiate slowly: Where they do the two year warranty, we do the four year warranty," he said.

Ambition

The company produces TVs and fridges, but has ambition to expand the plant to include more white goods and there are also plans produce smartphones in two years.

Khans said that the company had a singular focus as SA is seen as an economic gateway into Africa.

"If you look at the trend in this industry, you can see it definitely goes through cycles. The first thing that we need to do is we need to continually bring products of a high quality and of a high standard."

The South Korean electronics giant though recently announced that it would open a South African factory in Durban with an investment of $20m.

"The establishment of new plant is another step in our goal to create new business opportunities, products and technology," said Matthew Thackrah, deputy managing director of Samsung Electronics South Africa.

The company is also a marketing behemoth and has a footprint in most retail stores, but Khan countered this strategy by saying that Hisense would focus on consumer value.

"If we can continually focus on delivering value to the consumer, there is no fast track to building equity in a brand."

Watch this video of Hisense workers assembling TVs:


- Follow Duncan on Twitter

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