Dongbu makes foray into China

Chinese customers check details of a three-door refrigerator manufactured by Dongbu Daewoo Electronics at a department store in China, Wednesday. / Courtesy of Dongbu Daewoo Electronics

By Kim Yoo-chul

Dongbu Daewoo Electronics, the nation’s No. 3 manufacturer of consumer electronics after Samsung and LG Electronics, is making inroads into the lucrative Chinese market by opening offices in three major cities.

On Wednesday, the Dongbu Group affiliate said it recently established three sales offices in Shanghai, Beijing and Shenzhen for business expansion.

Spokesman Kwon Dae-hoon said those offices are focusing on strengthening partnership with leading Chinese retail channels to push its business in the neighboring country with better supply chain management.

“We opened offices in Shanghai in May, followed by Beijing in June and Shenzhen in July. Each office is hiring qualified Chinese employees. China is now Dongbu’s most crucial market,” said the spokesman.

Dongbu plans to increase the sale of its premium products, according to the company, by improving its brand awareness in the market.

“We will supply premium appliances manufactured at our plant in the local provincial city of Gwangju. Budget appliances such as microwave ovens produced at our plant in Shenzhen will be exported to other countries,” he added.

Dongbu has teamed up with leading department stores there to entice more customers with purchasing power.

“Dongbu plans to maintain solid partnership with department stores in major cities. We are also persuading outlets in satellite cities to put our appliances on shelves,” said the spokesman. The company plans to establish nationwide sales networks in the near future.

Dongbu said three-door refrigerators and drum washers have been receiving warm responses from a growing number of Chinese, thanks to their sleek surface design.

Kwon said it has signed with a Chinese retail outlet to supply 10,000 drum washers.

According to its internal analysis, the market for appliances in China has been growing at about 10 percent annually over the past few years, helped by Beijing’s various policies to boost the local economy and increased income.

The appliances market in China was valued at 250 trillion won last year, which is comparable to the United States in terms of market size, Dongbu said

Dongbu was also strengthening its ties with leading U.S. retailer Wal-Mart by supplying microwave ovens. In the United States, it’s also been in talks with Costco and leading consumer electronics retailer Best Buy for business expansion.

Spokesman Kwon, however, declined to comment if it plans to sell televisions in China to diversify its portfolios.

It plans to resume its TV business sometime in the latter half of this year, which is the first time in five years since it walked away from that business in 2009.

Dongbu Daewoo, which has dual strengths in components and finished goods like Samsung Electronics, aims to generate 2 trillion won in revenue and 60 billion won in operating profit this year.

Oh Myung, a former deputy prime minister, is the chairman of the group’s consumer electronics affiliate.