Opportunities come with risk.
In the second part of an interview with Appliance Retailer, newly-appointed managing director of Asko Australia, Kevin Ke, spoke further on the value of the partnership between Hisense and Asko and how this provides the local arm of the Scandinavian brand with a unique opportunity for the future.
Ke said the most exciting benefit between Hisense and Asko comes from Hisense’s strength in consumer electronics. With the acquisition of Asko, even from an early analysis, shows there is a very good fit with the complementary product portfolios of dishwashing, laundry and major cooking appliances.
Asked who globally has a strong premium whitegoods business, balanced by a brown goods business, Ke said: “To brands like Samsung and LG, whitegoods is defined by product portfolios such as refrigeration and air conditioners, rather than major cooking appliances. So far there has been no Asian brand that has been successful. We are now the only ones to be able to perfectly match these product portfolios together and bring these to market.
“It is clear that other European brands have fallen behind in terms of being able to deliver new digital technology. We have extensive experience in the consumer electronics category where a product lifecycle is often less than 12 months. This experience, as well as the ability to deliver technology, is a significant barrier to entry for new players. I see artificial intelligence and smart home platforms as an ideal path forward. Who else has the ability to get both intensive and extensive knowledge about whitegoods as well as consumer electronics?
“It is now about looking at ourselves in the mirror and seeing how and where we can do it properly. This is from a technical perspective as well as a capability perspective.”
While acknowledging a huge respect for competitors, the easy money or easy win is not there anymore, he said. “The whole market is dynamic, so like it or not, we have to embrace and prepare for that change in the future and technology has taught us this.”
According to Ke, firstly you have to decide whether you want to make this technological change, and secondly have the ability to do it. “The good thing with Hisense’s involvement in the Asko brand is the top management of the new organisation is from a fast moving mentality. The company will now apply this philosophy to see how we can compete and generate more value at that premium level to bring extra value to the consumer.
“We want to remind our business partners that after we complete some basic housekeeping, we are committed to working strategically to improve our price positioning for Asko. Retailers all understand that ASPs are dropping and they are concerned about price erosion with floor staff moving to make quick easy money taking advantage of brands coming in and playing aggressively on price, but in reality how sustainable is this with rents rising and costs increasing?
“This is why the ASP is a part of our future positioning strategy for Asko. How we justify the ASP is critical, not just by lifting it up, we have to deliver extra value to the consumer. Consumers spend money more wisely and rationally and this is a tough situation, but at the same time, consumers are still willing to pay for real features and benefits. The issue is that benefit needs to be delivered, understood and appreciated. The value has to be solid and touchable with consumers able to see the difference. We have to deliver in a meaningful manner and not just talk about it in superficial or cosmetic way.
“Real improvement requires risk. Should we take less risk or do we want to challenge the market with the chance of failing, so which direction do we take? We came from an industry which is technology driven and I know there is no safe or easy way. There no such thing as a safe option. You have to run as fast as you can and not leave anything in the tank.
“We appreciate the support from our retailers and at the same time, the retailers have seen Hisense’s growth and should have confidence that if I have made promises, then I will deliver,” Ke said.