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Haier, Home Retail launching JV on mainland

Updated: 2011-10-20 10:35

By Li Woke (China Daily)

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Haier, Home Retail launching JV on mainland

A booth of Haier Group Co Ltd at an expo. The Chinese appliance maker will set up a joint venture with Home Retail Group, working under the brand Argos on the Chinese mainland. [Photo/ China Daily]

BEIJING - The Chinese appliance maker Haier Group Co Ltd said on Wednesday it will cooperate with the UK-based Home Retail Group PLC to build a multichannel retail business in China.

In a filing with the Hong Kong Stock Exchange, Haier said it will set up a joint venture with Home Retail Group, working under the brand Argos on the Chinese mainland. Haier will hold a 51 percent stake and Home Retail the remainder. The initial investment will be $29.5 million, of which $15 million will be provided by Haier.

The venture is expected to start operation in 2012. The long-term aim is to roll out a multichannel business in key regions throughout China, the statement said.

"The move is part of Haier's long-term strategies," said He Wei, analyst with Everbright Securities Co Ltd in Shanghai.

"Haier, together with other Chinese appliance makers, is trying to establish its own retail channel, as sales channels in China are relatively limited," said Peking Tan, R&D director of Greater China with MillwardBrown, a leading research agency. "In addition, Haier can learn from the foreign-experienced retailer about their method of global expansion."

Haier, founded in 1984, is a multinational consumer electronics and home appliances company based in Qingdao, Shandong province. Its products focus on white goods, including washing machines, refrigerators and air conditioners, but also include mobile phones and televisions.

In 1999, Haier opened a plant in South Carolina, the United States. In 2001, Haier constructed its second factory in Pakistan.

That year, it also purchased a factory in Italy as part of its continued drive into the European market. In 2006, Haier announced it would enter the Indian market, and it also opened a store in Australia, according to its website.

In 2008, the appliance maker surpassed its rival Whirlpool Corp to become the world's top refrigerator producer in terms of sales, according to Euromonitor, an independent business intelligence provider. In 2010, it reported a turnover of 135.7 billion yuan ($21.3 billion).

Home Retail Group, whose shares are listed on the London Stock Exchange, is a leading home and general merchandise retailer in the UK with sales of almost 6 billion pounds ($9.45 billion) in its last fiscal year. It sells products under two retail brands, Argos and Homebase, according to its website.

According to Home Retail Group, Argos is the UK's leading multichannel retailer and sells more than 35,000 general merchandise and home products, from over 750 stores throughout the UK and Republic of Ireland, online, over the telephone and on TV.

 

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