Midea Appliance Prices Questioned As They Try To Take On Local Retailers
Serious questions are being asked as to how successful Chinese whitegoods manufacturer Midea will be in Australia with the Company claiming that they are set open 20 stores up against established retailers who already sell their products.
Questions are also being raised about the Companies pricing in Australia especially their so called discounts which appear to different depending on what State consumers live in.
The Company who is currently ramping up their global brand marketing with a recent multimillion-dollar sponsorship deal via UK Premier League Manchester City already has several shops operational in Australia however prices differ depending on where you shop.
Midea the biggest appliance manufacturing Company in the world also manufacture several house brand products currently sold by distributors such as Residentia and Ayonz with the Company set to compete directly up against their distribution partners as well as retailers selling the distributors house branded products.
According to sources their current Australian stores are currently struggling to attract consumers primarily because the brand is not known, it is also associated with bottom end cheap appliances and questionable pricing.
A Midea competitor told ChannelNews that an 8-hour study of their Chatswood store on a busy Saturday, “failed to attract enough consumers to support the store”.
“What they have is the margin to compete up against retailers such as Harvey Norman, Big W, Target, Appliances Online, Bing Lee, The Good Guys and Betta Electrical and their own distribution partners. They are also a big manufacturer of appliances who currently work with distributors so that on one hand they are selling direct while manufacturing other brands for distributors who in turn are trying to sell Midea manufactured products under a different name to retailers”.
Midea also own the Toshiba Appliances brand which Sydney distributor Ayonz who also sell Midea manufactured products are trying to establish in Australia.
In 2016, Toshiba transferred its home appliance business to the Midea Group in a major acquisition deal, valued at US$473 million. Midea is licensed to use the Toshiba brand worldwide until 2056.
This is despite the brand being associated with corruption and questionable accounting practises to the extent that Toshiba Computers were forced to rebrand their former Toshiba product Dynabook because of the stench associated with the Toshiba name.
Currently Appliances online are selling Midea products as well as other branded products manufactured by Midea including Essato and Seiki branded products.
The Midea branded products will compete up against the bottom end appliances being sold by Appliances Online making it difficult in the future for the likes of Appliances online and the likes of Target to compete on price with their Essato and Seiki appliances.
“There is no way that a distributor or a retailer will be able to compete with Midea manufactured products that are being sold via their Australian stores. Products such as Essato and Seiki will prove to be not as cheap causing headaches for retailers trying to sell these products” said one retailer.
Currently Midea are advertising what they claim are discounted opening specials of up to 50%.
At their Ringwood store in Victoria which they are promoting as being ’Near JB Hi Fi’ the Company is offering an opening special Midea R32 Split Air Conditioner for $629. However, our investigations reveal that their deals are not all that cheap.
At another one of their stores the same Midea R32 air conditioning unit is selling for $678 and this is supposed to represent a 15% discount. The reccomended prices for the same unit appear to have also changed from $799 at one store to $699 at another.
Appliances Online are selling a similar Residentia supplied Essatto Split Air Conditioner for $629 price and this includes a 30% discount according to the online retailer.
The system is manufactured in the same Midea factory as the Midea product.
The Chinese Company is pocketing both the retailer margin and the distributors margin selling directly with insiders telling ChannelNews that shortly the Company will start discounting appliance products in Australia in direct competition with retailers.
Midea Home Appliances Australia was established in 2018.
Early in 2019 the Chinese factory opened four retail stores at Box Hill and Ringwood in Melbourne, Chatswood in Sydney and Woodridge in Brisbane.
Supply to these stores is direct from a new warehouse at Condell Park in Sydney’s south-west.
Currently Midea are carrying over 200 SKUs in air-conditioning as well as small and large appliances.
Appliances online have not said whether they will drop the Seiki or Essatto products from their portfolio.