How Siemens, Finish Are Conquering China's Distrust of Dishwashers
There are an estimated 1.3 billion people in China, yet only 1% of the country's households have dishwashers. Some people worry they will be troublesome to run or use up too much water and electricity. And locals are unsure that a machine can cut through the cooking oils of Chinese stir-fry.
So appliance maker Siemens and Reckitt Benckiser detergent brand Finish have come up with an ingenious way of turning skeptics into converts. They set up a faux apartment in Beijing where people can host dinner parties free and try out life with a dishwasher. (Added bonus: There's a karaoke machine.)
Word-of-mouth and social-media buzz have drawn 2,000 people to the Beijing Party Place (so named to draw young people) in its first year. The center has hosted more than 110 parties to date, prompting the brands to open a bigger center in Shanghai. You can't buy products at either -- the concept is all about getting the dishwasher experience.
No dishpan hands
The center draws people such as 29-year-old pharmacist Pollycs Chen, who showed up at the Beijing apartment with friends, all toting plastic bags of groceries. She learned about the place when a friend posted on WeChat, China's popular mobile social app.
"At my place the kitchen's not big enough to have people over, and anyway, here you don't have to hand-wash the dishes," she said of the center, which is spacious by the standards of urban China.
The Party Place is fully kitted out with Siemens appliances, so Ms. Chen's group baked a sponge cake for dessert. (Baking is another trendy import from the West in a country where few people have ovens and do most cooking in woks.)
Amid the bottles of Chardonnay and boxes of Finish, staff member Beryl Zang was on hand to explain how to use the machines and detergent -- and to explain their benefits to anyone skeptical of their cleaning power or the expense.
"In the past, our mothers hand-washed clothes," she said. "Now every family has a washing machine, and they use laundry detergent and fabric softener."
About 38% of Chinese households have clothes-washing machines, according to a March study from Euromonitor International, compared to the 1% rate for dishwashers. But with "the faster pace of life and time-pressed daily schedules, more urban families have started to accept dishwashers," the report said, citing volume growth up 28% in 2013.
Bosch and Siemens Home Appliances Group, the joint venture that makes the Siemens-branded dishwashers used in the centers, is ranked by Euromonitor as the market leader in China, with 28% of the market by volume. The Bosch-Siemens venture reported a compound annual sales-growth rate of 20% for appliances in China in 2013.
That's good news for Finish, which, according to Reckitt Benckiser's director-government affairs and strategic alliances, Andrew Tan, is the sole dishwasher-detergent brand in China (there were two local brands that both failed). Outside of the Party Place generating PR value, neither brand does much advertising in the market.
Elmar Stumpf, head of dishwasher product for the Siemens-Bosch venture in China, said it worked with Reckitt Benckiser's Finish on studies in the market to show local consumers that with a dishwasher, "you can save a lot of water and you can save a lot of time. And if you're using a dishwasher you have hygienically clean plates, which with hand-washing you can never do." The company has adapted products for the market, adding chopsticks containers, for example.
Hygiene may be a big selling point for dishwashers, said Ying Mu, corporate branding manager for China-based consultancy Labbrand. "Being healthy is something Chinese consumers and families really care about," she said, adding that "light kitchen appliances related to 'natural' and 'health,' such as yogurt, juice or soy-milk machines, are doing very well."
Government spurs consumption
For many in China's growing middle class, dishwashers are affordable. Siemens-branded dishwashers on Chinese e-commerce sites range from $350 to $1,266. Local brands like Haier and Midea are cheaper. But traditionally, Chinese consumers scrimp on home goods -- since they're not seen in public, they don't bring the status or "face" of a car or handbag.
Many Chinese are accustomed to a lack of comforts that would be necessities elsewhere: In Shanghai and other southern cities, central heating is a rarity in apartment buildings.
In general, China's household-consumption levels are extremely low -- about 35% of GDP, compared with 69% for the U.S., according to World Bank figures.
But the Chinese government is trying to spur consumption, and is encouraging people to move to big cities, where they'll have to buy products to go with their new lifestyles. Will dishwashers be one of them?
Siemens and Finish hope so, and so far their efforts seem to be successful. On Dianping, a Yelp-like review site, the Siemens-Finish dishwasher experience center gets 4.5 stars out of five. One person noted that dishwashers might promote family harmony -- a priority in China -- "by clearing up any disagreements over who should wash the dishes."