When service means 'make for China'

Zha Sheng leads appliance major Vorwerk's strategy to serve top cities, tap the 2nd CIIE

For Zha Sheng, a love of mechanical engineering and the search for a better life led him to take up an executive job with an industrial group. As general manager for Chinese operations of Vorwerk Group, the German manufacturer of household appliances and cosmetics, Zha believes that the ongoing trend of 'Made for China' will encourage global players to be more innovative in pushing new products into the country's vast market.

"China's economic restructuring can be seen in the rising contributions of consumption and services to GDP," he said, adding strong domestic consumption has not only strengthened the country's markets but also stimulated both multinationals and domestic companies to shift the emphasis of their operations from 'Made in China' to 'Made for China'.

A fan of Chinese tea who previously worked for manufacturing, logistics and procurement businesses, the 55-year-old business executive stressed that boosted by further opening-up, China will maintain both its unparalleled momentum in industrial and consumption upgrading and its integration into global flows of trade, talent and innovation.

Vorwerk currently is expanding its manufacturing base in Shanghai and deploying more resources into China's western region and lower-tier cities, as well as enhancing the training of its sales advisers across the country.

Currently, Kobold (household cleaning products), Thermomix (smart cooking machines) and Temial (tea-makers) are the Wuppertal-headquartered group's key brands sold in China, where its main markets are top-and second-tier cities.

"Top-tier cities remain our priority markets," said Zha, noting second-tier cities such as Chengdu or Chongqing are also key to long-term success as the company sees opportunities in many shopping malls and living communities.

"They are ideal locations to develop our business because they are supported by well-developed high-speed railway networks. There are several cities connected to these big ones by less than one-hour bullet train rides. Our experience stores in these places can also serve consumers living in neighboring cities," he said.

The company will focus on using digital tools to reach out to lower-tier markets throughout the country.

"We will continue to create a balance among face-to-face demonstrations, physical stores and the online platform, as a large number of consumers use smartphones to explore things," he said. "As we grow in China, so must our ability to localize apps and software, bringing both after-sales service and technology online quicker than ever before."

In addition to bringing its flagship products - the latest smart cooking machines and vacuum cleaners - to the second China International Import Expo in Shanghai, Vorwerk will introduce its new material-made flooring products in the Chinese market via the event.

"The demand for high-quality carpets as floor coverings in China has surged in recent years, especially for office space, hotel, air and rail transportation," he said.

"We were privileged to participate in the first CIIE last year, and will continue to expand our presence at this year's expo. We believe the CIIE is a significant move for China to give firm support to trade liberalization and economic globalization, and actively open its market to the world."

Anchored in Shanghai, the company's China unit also manufactures appliances, and ships industrial parts from its Shanghai factory to its global networks, including economies related to the Belt and Road Initiative.

The home appliances market in China has already been reshaped by e-commerce, with shoppers spending 810.4 billion yuan ($115.2 billion) on goods in this category in 2018, up 1.9 percent year-on-year, according to a report released by the Beijing-based China Household Electric Appliance Research Institute earlier this year.

Meanwhile, China's kitchen appliance sales outshone other segments in the household appliances market, which appeared gloomy in the past year as the real estate market has been reined in and prices of raw materials soared.

The study cited that in the breakdown, high-end kitchen products lead the trend, suggesting that the country's consumption upgrade is fairly obvious.

"Technology is changing every part of our world," said Zha. In the household appliances sector, companies are now increasingly leveraging digitization, automation, and other potential disruptive technologies to develop new products and business models. Artificial intelligence, energy-saving tech and connectivity will be part and parcel of life in the future.

Agreed He Xiaoqing, global partner at A.T. Kearney, the US-based management counseling firm. She said Chinese consumers, especially millennials, want to enjoy life ...they care about their individuality and have strong preference for using smart home appliances to make their lives easier and healthier.

"When it comes to shopping in both online and offline channels, they also have unique tastes," she said.

Supported by over 650,000 employees globally, Vorwerk operates in more than 70 countries and regions. It runs a plant, an innovation center and 28 customer experience stores in China.

Educated in both China and Germany, Zha majored in mechanical engineering. Father of a girl, Zha spent a long time in several countries including Germany and Ireland. He has been working and living in Shanghai for several years now.

On a personal note, Zha said he enjoys reading, sports and outdoor recreational activities, and spending time with his family during his spare time.