Sakura (China) Continues Growing in Mainland Home-Appliance Market

Sakura (China), a company established with reinvestment from the Taiwan Sakura Co., has been operating successfully in China for 17 years and now has a total of 6,500 franchised stores and 500 company-operated outlets there selling home appliances bearing the Sakura brand.

Taiwan Sakura was established in 1978 and produces mainly kitchen appliances including range hoods, water heaters, water filters, gas stoves, dish dryers, and kitchen sinks. The company expanded into China in 1994, setting up Sakura (China) in Kunshan, Jiangsu Province, to duplicate its Taiwanese business model.

Many attribute the success of Sakura (China) to C.C. Liao, the company's president, who joined Taiwan Sakura back in 1989 and five years later was assigned to China to explore the market there. He had to learn as he went along—including learning simplified Chinese characters.

“To explore an unfamiliar market is not easy, because you have to learn everything right from the beginning, not to mention the steep competition you have to overcome,” Liao comments. “You have to study market trends and become acquainted with consumers there. That means that you have to totally immerse yourself in the new environment.”

Liao even imparted his drastic “two knives” concept to his subordinates: an employee of the company should be equipped with two knives, a long one for dealing with rivals and a short one for punishing oneself for failure.

“China's domestic market is huge, but it takes time to become familiar with the purchasing habits of consumers there,” Liao adds. “Anyway, quality, reasonable prices, and good service are always the keys to winning buyers.”

At the beginning of its foray into China the company established footholds in large cities around the areas of the Yangtze River Delta, Pearl River Delta, and Bohai Bay, in the central, southern, and the northern parts of the country, respectively. In recent years it has begun to extend its marketing network into inland provinces.

To be more competitive, the company provides round-the-clock home services including free safety checks, and offers its customers small gifts; for instance, it sends six free oil-filter meshes to each of its range-hood buyers every year—a total of about 15 million annually, costing more than 100 million renminbi (RMB). To deal with such a large volume of mailing, China Post has set up an exclusive branch post office inside the Sakura (China) headquarters in Kunshan.

Last year Sakura (China) sold a total of 560,000 water heaters, 300,000 gas stoves, and 370,000 range hoods; in the first half of this year the sales record was 300,000 water heaters, 160,000 gas stoves, and 200,000 range hoods.

As part of its marketing effort, Sakura (China) rented a large exhibition site (consisting of 72 standard booths) to display its products at the Guangzhou Taiwan Trade Fair in mid-August this year, making it the largest exhibitor at the event. “The best way to market products in China is to create big publicity for them,” Liao stresses. “Today Sakura has built up a good image in the home-appliance market in China, and we have a large pool of loyal customers.”