The Asia Region

From BSH Wiki
Jump to: navigation, search

The Asian home appliance market offered huge growth potential. At the same time there was scarcely any other region that posed such manifold challenges for BSH[1] and its products.

While efficient, space-saving appliances were in demand in urbanized parts of Asia, machines in less developed areas had to cope especially with power failures or highly fluctuating water pressure, while electrical connections and electronics varied in practically every region. Apart from technical aspects, there were also cultural aspects that had to be taken into account. In India, for example, "hand wash" does not mean gentle cleaning, but rather the thorough kneading and rubbing of heavily soiled clothes.[2] While 50 percent of all home appliances on the Chinese market would soon be purchased online, it was still good salespeople in India who influenced the decision to buy significantly.[3]

China

Quality check in BSH's Nanjing site, China in 2006. (Source: Press fotos BSH Hausgeräte GmbH)

When the Appliance Park was inaugurated in Nanjing, China, on March 8, 2006, the then Executive Vice President of BSH, Dr. Robert Kugler, described China as the "… key to the global development of BSH, and (…) a stable and highly promising market."[4]

BSH had set its sights on becoming the largest foreign manufacturer of home appliances in China, thus creating a strong basis for further expansions in Asia and Oceania. The most important sales arguments since activities commenced in Asia included the know-how of BSH and the innovative and high-quality German products.[5] The Siemens brand was first introduced in 1994 to avoid competing with own brands. It was only when the brand and the products were firmly anchored in the consciousness of Chinese consumers that the Bosch brand was rolled out at the end of 2004.[6]

Because the Chinese market was so strictly regulated for foreign companies, BSH decided to make its initial foray in China in the form of a joint venture. Following eleven months of negotiations, BSH and the Chinese Little Swan Co. Ltd inked a joint venture agreement on November 11, 1994 for the manufacture of washing machines in Wuxi, China. In addition to the production plant, a sales service and logistics center was also established. Wuxi Little Swan was one of the leading manufacturers on the Chinese market at this time.[7] The joint venture was called BSW Household Appliances Ltd.[8] Production was expanded at the end of 1995 to include cookers, cooktops and extractor hoods. Just one year later, BSH succeeded in extending its position on the Chinese market by entering a further joint venture and thus expanded its product portfolio in China to include cooling appliances. BSY Cooling Appl. Ltd. was founded in Chuzhou together with the Yangzi Group. The Siemens cooling appliances had captured a market share of ten percent by the time the year was out, thus also outstripping the local Chinese Yangzi brand.

Ribbon cutting at the grand opening of BSH branch in Taipeh, Taiwan in 2012. (Source: Press fotos BSH Hausgeräte GmbH)

A sales company was opened in Nanjing in 1997, which marketed the products of both production plants nationwide. BSH acquired the shares of its Chinese partner in the refrigerator plant in Chuzhou in 2000 and then a few years later acquired full ownership rights to the washing machine factory. A major Appliance Park was established in Nanjing in 2004, which developed into a production location for five sectors.[9]

The BSH organization in China was restructured in 2010 and BSH Home Appliances Holding (China) Co. Ltd. was established in Nanjing as a holding company, from where all of BSH's activities in China were managed.[10]

While other Western competitors had already invested in China before BSH – though without managing to secure a notable market presence even up to the present day – BSH's policies in this difficult market paid off. Much more so than in other markets, it was important in China to nurture the trust of consumers, customers and the administration on a personal and long-term basis, which is why BSH China was so successful since it had put a stable management team in place for the long haul.

Asia and Oceania

Following its successful entry to the Chinese market in 1994, BSH began to further expand its market presence in the Asia region. Locations were established in Hong Kong and Singapore in 1995 and 1996 as regional headquarters for Asia and the Pacific as a whole[11] and acted as a basis for establishing further locations in Indonesia, Malaysia, New Zealand, Taiwan, Thailand and also in the Australia/Oceania region. Most of the locations in Asia had been successfully established by 2006. BSH's presence in Asia was also further expanded in the years that followed. At celebrations to mark the 10th anniversary of the Asian headquarters in Singapore, a doubling of revenue growth in the Asian region, excluding China and India, was set out as a corporate goal.[12]

Inauguration of the BSH technology center in Adugodi, India. (Source: Press fotos BSH Hausgeräte GmbH)

India

BSH enjoyed a presence in India since 1997. At this time, a subsidiary company set about establishing a BSH sales and customer service network.[13] To this day, word-of-mouth recommendations are still the most important form of marketing in tech-savvy India, with its more than 150 million smartphone users (2014).[14] In the period between 2001 and 2009, the sales company was transferred to an Indian owner as RBS Home Appliances Ltd. due to political requirements. It primarily distributed Siemens products.[15] In 2009, BSH once more founded a home appliances private limited company in Mumbai.[16] The company constructed a new Appliance Park in Chennai for producing washing machines, where production commenced in 2014.[17] The factory established itself as a hub for supplying the Indian market and for exporting to the entire Southeast Asia region. A development center was established here at the same time for gas cooktops and extractor hoods.[18]

The European BSH products were modified and further developed for the Indian market – for example the washing machines produced in Chennai, which still operate reliably even with fluctuating electricity and water supply.[19]

Notes

  1. BSH was founded in 1967 as Bosch-Siemens Hausgeräte GmbH - BSHG for short. In 1998, the name was changed to BSH Bosch und Siemens Hausgeräte GmbH, with the short form BSH. Since the sale of the Siemens shares in BSH to Robert Bosch GmbH the company’s name is now BSH Hausgeräte GmbH, but still BSH for short.
  2. BSH Corporate Archives, A01-0029, Business Report 2011, page 14.
  3. BSH Corporate Archives, A01-0033, Business Report 2014, page 24.
  4. BSH Corporate Archives, B03-0091, Address by Dr. Robert Kugler Executive Vice President, BSH Bosch and Siemens Hausgeräte GmbH. On the occasion of the inauguration of the Nanjing factory site. Appliance Park, Nanjing, China, March 7, 2006, page 4: "... key to the global development of BSH, and (...) a stable and highly promising market."
  5. BSH Corporate Archives, B03-0091, TV Interview Dr. Kugler on JS TV International Channel, March 8, 2006.
  6. BSH Corporate Archives, B03-0091, Press Release for EA opening, March 8, 2006.
  7. BSH Corporate Archives, A01-0013, Business Report 1995, page 8 and BSH Corporate Archives, A05-0017, inform 04/1994, Jg. 17, page 1.
  8. BSH Corporate Archives, A05-0018, inform 01/1995 Jg. 18, page 27.
  9. BSH Corporate Archives, A05-0022, inform 03/1999, Jg. 22, pages 8-9 and BSH Corporate Archives, A05-0023, inform 04/2000, Jg. 23, page 16.
  10. BSH Corporate Archives, A05-0034, inform 02/2011 Jg. 34, page 22.
  11. BSH Corporate Archives, B03-0091, Press Release Singapore, December 2, 2006 and BSH Corporate Archives, A05-0018, inform 03/1995, Jg. 18, page 6.
  12. BSH Corporate Archives, B03-0091, Press and Public Relations (external), press clipping, 2006.
  13. BSH Corporate Archives, A01-0015, Business Report 1997, page 5 and BSH Corporate Archives, A01-0016, Business Report 1998, page 10.
  14. BSH Corporate Archives, A01-0033, Business Report 2014, page 24.
  15. Bosch, Siemens JV to unveil local fridge brand, target mass market, The Economic Times, 16.06.2004, http://articles.economictimes.indiatimes.com/2004-06-15/news/27394697_1_rbs-home-appliances-refrigerators-bosch-and-siemens
    RBS launches new fridge, The Economic Times, 9.06.2004, http://articles.economictimes.indiatimes.com/2004-06-09/news/27375087_1_rbs-home-appliances-bsh-germany-vipul-b-raval
  16. Tradition, BSH Homepage, https://www.bsh-group.de/index.php?page=1075
  17. Tradition, BSH Homepage, https://www.bsh-group.de/index.php?page=1075
  18. BSH Corporate Archives, A01-0036, Business Report 2013, from page 38.
  19. BSH Corporate Archives, A01-0033, Business Report 2014, page 25.