Haier in India: building presence in mass market beyond China
1. Why did Haier enter India? What did it plan to achieve in this new market? Haier entered the global markets and started an internationalization strategy in the 1990s. Starting from European countries including Italy, the United Kingdom, and France, it stretched over even to the Asian market and opened its first manufacturing facility in Indonesia. Although the first entrance into the Asian market was in 1996, it did not enter the Indian market until early 2004. There were many reasons why Haier didn’t, and one of them is the high tariffs and barriers that stopped it from doing so. But in 1991, after a balance of payment crisis that situated India in debt with large loans from international agencies, India went through some policy changes of internationalization. These changes finally allowed wholly owned foreign entities and treated them like local companies. Even after the barrier reduction, Haier hesitated in entering India, but in 2004 Haier entered the Indian market at last. There are many reasons why Haier made the step to actually go into the Indian market.
First of all, a series of policy changes in the 1990s definitely opened the doors and set the environment that made it possible for Haier, a foreign company, to enter the Indian market. In addition to that, the Indian market itself was in a favorable state for Haier. Around 2003-2004, India had rising disposable income, an expanding middle class, and a relatively low entry barrier in the white goods market. These conditions were very attractive for Haier to launch its new facility in India. And according to Zhang Ruimin, the CEO of the time, because Haier had first experienced to the high-end markets in the US and Europe where competition is more fierce and survived there, it had the ability and appropriate experiences that made the company stronger in the global market.
The goals Haier had in the new Indian market...