Chinese home appliance brand Skyworth enters the Russian market

“Kommersant” learned that one of the largest Chinese manufacturers of household appliances, Skyworth, will officially enter the Russian market. The company sent proposals for the placement of its products in Russian networks, and also agreed on the contract production of televisions at the Belarusian Horizon. Market participants say that Skyworth also plans to localize production at Russian factories of suppliers who have left the country. However, experts are skeptical about the prospects of the brand, which “does not stand out among other Chinese brands.”

Commercial director of Holodilnik.ru Alexey Pogudalov told Kommersant that the Chinese manufacturer of televisions, refrigerators, washing machines and other large household appliances Skyworth is negotiating with Russian retailers about placing products in their networks. He added that Skyworth equipment will soon be available in Holodilnik.ru stores: “The company’s televisions will be localized for production on the territory of the Republic of Belarus, at the Horizon plant; the possibility of placing assembly and large household appliances at factories that have left the Russian Federation is also being considered brands.” The top manager clarified that in addition to its own brand of equipment, Skyworth sells and produces components for consumer electronics, including for companies from the Russian Federation.

Skyworth confirmed to Kommersant negotiations with Russian companies and the start of contract production of televisions at Horizon. Skyworth did not disclose details about the production volume and possible localization of assembly of refrigerators and washing machines in the Russian Federation, adding that “specific sites in the Russian Federation are not currently being considered.”

M.Video-Eldorado reported that they are open to new partnerships and are considering cooperation with Skyworth. Citylink declined to comment.

Founded in 1988, Skyworth is headquartered in Shenzhen. The company produces televisions, digital set-top boxes, liquid crystal displays and other household appliances. Shares are traded on the Hong Kong Stock Exchange. In 2018, the company already tried to start selling products in the Russian Federation through Tmall, which is part of AliExpress. (see “Kommersant” dated August 27, 2018). But now there is no Skyworth equipment on either AliExpress or Tmall. AliExpress declined to comment.

The general director of the Russian brand of household appliances Kuppersberg, Dmitry Shashkin, believes that Skyworth may face competition from Chinese vendors of household appliances that have already entered the Russian Federation: “In the absence of local production, the prospect of rapid growth looks doubtful.” Kuppersberg cooperates with Skyworth to supply components for large household appliances.

The founder of household appliances manufacturer Jacky’s, Huseyn Imanov, believes that localizing washing machines and refrigerators in the Russian Federation is more difficult than assembling televisions. Among the possible options for locating Skyworth production, Mr. Imanov named the former LG and Samsung factories, as they are equipped with the equipment necessary for assembling refrigerators and washing machines.

Skyworth is one of the top 10 suppliers of household appliances in China, notes Dmitry Levin, managing director of large household appliances at Marvel Distribution. But, according to him, the company “does not have obvious strengths” that could help claim a serious market share: “It is approximately at the same level as TCL, Hisense or ChiQ, which are already present in Russia. Skyworth’s success will depend on the chosen marketing strategy.”

Kommersant’s interlocutor among retailers is even more pessimistic: in his opinion, Skyworth products “risk failure in the Russian market due to management strategy.” The fact is that the current strategy of the company’s local representatives is more likely to organize wholesale supplies of equipment online for sale at reduced prices, rather than to organize marketing activity in Russia, sales research, etc., says Kommersant’s source: “This brings losses and reputational losses, as buyers begin to treat this equipment as consumer goods.”

Timofey Kornev