F&P’s new showroom, friends in high places, 1 billion people: Welcome to China

By Patrick Avenell in Hangzhou

HANGZHOU, PR CHINA: Nestled between Villeroy & Boch and Poggenpohl in Hangzhou's elite Tower Shopping City lives the new Chinese home of Fisher & Paykal. It is a symbol of wealth, prosperity and forward thinking. It is also a great risk: can a family-owned business from one of the world's smallest countries really take on the might of China?

At the opening of its new showroom in the high concept mall, the answers from F&P chief operating officer Andrew Paykel, New Zealand ambassador to China Carl Worker, and Haier president, Asia Pacific, Philip S Carmichael were unanimous: "yes".

The true foundation stone of this showroom is not in Hangzhou, a city of 6 million on the Shanghai commutor belt, but much further north, in the equally large seaside city Qingdao. It was here that Carmichael and co made the decision to purcahse 20 per cent of Fisher & Paykel. The goal for Haier is increased sales in Oceania, on the back of F&P's sales and service network. The goal for Fisher & Paykel: tap into a country of 1 billion aspirational Chinese people, just now coming to understand what it truly means to be middle class.

The goal of this showroom, which also houses Bang and Olufsen, Gaggenau, and a Harry Potter clothing store, is to pique the interest of specifiers, designers and architects (SDAs). Unlike in Australia, where Fisher & Paykel has a mature retail network, in-store sales is not the focus. Fisher & Paykel will be a premium brand in the Orient, according to Andrew Paykel, with architects now being courted to recommend F&P as the brand of choice for the enormous residential skyscrapers that are continuously rising, like jet streams in a fountain, across the Chinese skyline.

Not that retail isn't the next step. Philip Carmichael, the US-born Haier executive that has worked most closely with F&P, told Current.com.au that his brand has over 7,000 dedicated Haier stores in China, in addition to general electrical retail stores. By his estimates, this makes Haier, at least, the second biggest retailer in China. He said that once F&P had achieved cut-through in the Chinese market, the possibily of over-the-counter sales through this network was likely.

But within that scenario is a variable: when and if Fisher & Paykel will ever achieve such brand prominence that consumers will ask for it. One showroom in one city is a start, but more than 94 million Chinese people don't live in Hangzhou. To that end, Fisher & Paykel is currently lionising sites in Beijing and Shanghai, with more showrooms to be opened by the end of 2010. From there, Haier's interwoven and mature system of marketing, sales and service will be called upon to deliver a clear message: Fisher & Paykel is the premium brand for China.

Finally, in a quiet moment at the launch last night, Carmichael said that floorspace in these high concept, premium brand shopping malls was like gold dust. He said there were waiting lists and premiums to such a shopfront. When asked if Fisher & Paykel's new neighbours were partnered with a local, as F&P is with Haier, he replied, "No," and after a pause, "And that's why we're going to beat them". Friends in Haier places? Indeed.

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