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Hisense International._ Marketing Dept 9th Issue


									Hisense International., Marketing Dept     9th Issue

Hisense International., Marketing Dept                                                                            9th Issue


Focus .............................................................. 3
   Hisense & Whirlpool Air Conditioning Global Strategic Cooperation Signing
   Speech on the Ceremory from Timothy A Kee, VP of Whirlpool Global Air
   Treatment ................................................................................................................4

News Express................................................. 5
   The sales of inverter air conditioner have ranked first in China for 12 consecutive
   years. .......................................................................................................................5
   Hisense flat-panel television is well received by the consumers............................6
   White Goods Global Brand Share in 2008 .............................................................7
   Welcome to China Import and Export Fair 105......................................................8

Technology Time ........................................... 9
   Top Chinese Flat Panel HDTV Manufacturer Hisense to Feature SRS
   TruSurround XT......................................................................................................9
   China Telecom, Hisense Join Hands.......................................................................9

Communication Platform .......................... 10
   “I am a mouthpiece,glue & bridge for Hisense”................................................10

Culture Corner............................................ 12

Hisense International., Marketing Dept                                                   9th Issue


Hisense & Whirlpool Air Conditioning Global Strategic
Cooperation Signing Ceremony

March 25th: Timothy A Kee, VP of Whirlpool Global Air Treatment, and Dr. Lin Lan, VP of
Hisense, signed a global air treatment contract in Guangdong that will lead to a strategic
cooperation between the two companies. The cooperation is for the development and
manufacturing of more high-tech and high-quality products for the global market.

This is another significant strategic alliance that has been struck since the joint venture was signed
between Hisense and Whirlpool last April. This latest strategic partnership will mark a growing
alliance between the two companies and will allow for further expansion into the home appliances
market worldwide. It will also improve the structure of the Chinese appliances industry and
prompt the research, development, and manufacturing ability of Chinese companies to reach
international levels.

                                                               Concerning        the       expanding
                                                               relationship between the two
                                                               companies, Timothy A. Kee, VP of
                                                               Whirlpool, said, “The cooperation
                                                               and relationship between Whirlpool
                                                               and Hisense-Kelon started back in
                                                               1998. In 2008, there was a
                                                               significant increment in volume and
                                                               business achievements in many
                                                               regions around the world. The years
                                                               of working together has built a solid
                                                               foundation for this strategic alliance.
                                                               We are seeking a long-term global
strategic partnership that will yield excellence in every aspect from resource management to
operational efficiency and cost reduction, in order to weather the challenges of the current global
economic crisis. Hisense-Kelon is our first choice for partnership with its leading edge technology
and strong manufacturing capability. Hisense is one of the most competitive and fastest growing
manufacturers for household appliances with commitment to ‘Creating Perfection and Serving
Society’ with its leading edge technology in inverter and energy-saving. We believe that the
partnership will strengthen our leverage to ensure a win-win solution in the midst of the global
economic crisis.”

Lin Lan, VP of Hisense, responded by saying, “Whirlpool is the world's largest home appliance

Hisense International., Marketing Dept                                                   9th Issue

company both in manufacturing and distribution of household electrical appliances with a long
history and proven track record of nearly a hundred years. Its products are built on the philosophy
of ‘innovation, leading technology, and excellent product quality’, which is aligned to Hisense’s
philosophies in product and technology. Hisense will be able to learn from Whirlpool in areas of
operational and managerial excellence. This partnership will further integrate and optimize
resources from both companies in engineering, technology and manufacturing to bring forth the
next level of highly innovative products and world-class services to the consumer. We believe that
the partnership will stimulate vast business growth in the overseas market and will also
consummate the strategic & planning layout for Hisense in overseas markets. This partnership,
with a win-win approach, will create speed in the research and development of new products and
enhance the manufacturing capability of Hisense.”

Speech on the Ceremory from Timothy A Kee, VP of
Whirlpool Global Air Treatment

“Thank you, Dr. Lin for your outstanding summary of our partnership and close relationship. I
would also like to say, ‘Good afternoon,’ to the joint Whirlpool and Hisense teams, and ‘Good
afternoon’ to all of you who are present to witness this contract signing ceremony between
Whirlpool and Hisense-Kelon.”

“Today is the next step of our ten year journey, which started ten years ago as a simple OEM
relationship that has now grown into a key strategic partnership. The many years of working
closely together has created a solid foundation for this strategic alliance. Over these years we have
built a long-term global strategic partnership that has yielded excellence in every aspect from
resource management to operational efficiency to continuous cost reductions. These actions will
continue to be our priorities in order for both parties to weather the challenges within the current
global economic crisis.”

“Clearly, Hisense-Kelon is an outstanding partner with leading edge technology and a strong
manufacturing capability. Likewise, Hisense-Kelon is one of the most competitive and fastest
growing manufacturers for household appliances with a true commitment to ‘Creating Perfection
and Serving Society’. We sincerely believe that this partnership is one of the primary catalysts for
Whirlpool’s growth in the global air treatment business by sourcing outstanding products that
meet our brand promises for consumers globally. The truly unique aspect of this partnership is the
open dialogue and communication at all levels within both organizations, which allows for
creation of new innovations, new products, and new approaches.”

“Lastly I would like to specifically recognize the following three people whose vision and
understanding have made today’s event possible. Dr. Lin Lan, Dr. Zhou, and Mr. John Huang have
been outstanding supporters of Whirlpool throughout the years that we have been working
together. Their patience and understanding have been the keys to the maintenance and growth of
our relationship. I sincerely look forward to the next ten years of friendship and cooperation

Hisense International., Marketing Dept                                                 9th Issue

between Whirlpool and Hisense-Kelon. Together we will succeed and prosper.”

News Express

The sales of inverter air conditioner have ranked first
in China for 12 consecutive years.

                                                            Since January this year, the sales of
                                                            Hisense inverter air-conditioner have
                                                            obtained a tremendous growth in the
                                                            Chinese market, and the recovering
                                                            sales amount has hit a record high
                                                            over the last 12 years. According to
                                                            the statistical data provided by Zhong
                                                            Yi Kang, in 2008 the market share of
                                                            Hisense inverter air conditioner
                                                            continues to rank first, and has been
                                                            maintaining this position for 12 years
                                                            in succession.

                                                            For the sharp increase of the sales of
                                                            Hisense inverter air conditioner, the
                                                            veterans in this industry did not
                                                            express any surprise. “Since the
                                                            development of China’s first inverter
                                                            air conditioner in 1997, Hisense has
                                                            been innovating constantly and has
                                                            grasped the core technology of the
inverter air conditioner. Under the situation that the inverter air conditioner is increasingly
becoming the hot spot in the market, the technological superiority and brand advantage
accumulated by Hisense over the years has resulted in a sharp increase in sales.”

Experts believe that along with its ability to save energy and provide ultimate comfort, the reason
for the sharp increase of Hisense inverter air conditioner sales is that Hisense has always adhered
to the development strategy of “Establishing Enterprise by Technology” with the obvious
advantages in the competitiveness of products.

Hisense Inverter Products are better than its competitors on the index, such as in the area of
environmental-friendliness. The speed of refrigeration and heating of the Hisense SuiXiang DC
inverter air conditioner, which was just recently introduced to the market, is faster than an

Hisense International., Marketing Dept                                                   9th Issue

ordinary air conditioner by 300%, and its hourly minimum power consumption is only 180W (less
than 25% of the hourly power consumption of the entry-level air conditioner with the same
specification in the current market).

Industry experts point out that Hisense being in the inverter air conditioner market for 12 years not
only establishes a well-known and respected brand as the “inverter expert”, but also leads the
development and progression of the Chinese air-conditioning industry. Experts conclude that
global sales of inverter air conditioners will experience drastic growth and Hisense will be leading
the charge in efficiency, innovation, and market share.

Hisense flat-panel television is well received by the

                                                               On March 13, in the “Reliability
                                                               Standard Industrial Code Proseminar
                                                               for Flat-Panel Television Products”,
                                                               the <Investigation and Research
                                                               Report on the Satisfaction of Urban
                                                               Consumers on Chinese Flat-Panel
                                                               Television> issued by China
                                                               Electronics Chamber of Commerce,
                                                               the Office of Consumer Electronics
                                                               Products, reads:

                                                               “In the satisfaction evaluation on the
                                                               use and after-sale service of
                                                               flat-panel television by urban
                                                               residents     households,     Hisense
                                                               flat-panel television obtained the
                                                               highest satisfaction from customers,
                                                               which is the second time that
                                                               Hisense obtained the appraisal of the
                                                               highest satisfaction from the
                                                               customers following the obtainment
                                                               in 2007.”

Since 2005, China Electronic Chamber of Commerce has carried out a continuous investigation
and research on the purchase and use of flat-panel televisions by Chinese urban consumers. Since
2007, the consumption of flat panel television entered into the stage of scale growth. From the
statistical data of the investigation and research on 15000 household consumer samples which
have the flat-panel television for the past two years, we reach a conclusion that: Hisense flat-panel
television has the highest penetration rate in urban resident household, so it is widely loved by the
broad masses of consumers. After four years of cultivation, the Chinese flat-panel television

Hisense International., Marketing Dept                                                  9th Issue

market has entered the stage of consumption and popularity of flat-panel televisions since 2008.
As of 2008, the total amount of flat-panel television in China has reached 28 million units, and the
trend of demand growth will be maintained in 2009, when the sales amount is expected to reach
15 million Units.

With the popularity of flat-panel televisions, the problem on the reliability of product quality has
increasingly become an issue. According to < Investigation and Research Report on the
Satisfaction of Urban Consumers on Chinese Flat-Panel Television>, it reads:

“Among the households of which the flat-panel television has a fault, seven percent of the
consumers have experienced the need for repeated repairs. The proportion of fault in various
brands of the flat-panel televisions is two to five percent. Among all the major brands, there is a
small proportion of defects found in Hisense flat-panel televisions, which shows stable product
performance and higher quality reliability. So, Hisense has become the flat panel television brand
trusted by consumers.”

In 2008, Hisense introduced the first type of LED LCD television into the domestic market and
became the first enterprise in the world which produces the LED LCD television in mass. With the
maturity of LED backlight source liquid crystal technology, the LED television, developed by
Hisense independently, is the thinnest one in the world and accomplished a “revolution in energy
saving and environmental protection” and a “revolution in color” for LCD television.

Adhering to the faith value of “Create a perfect service to serve the society”, Hisense strictly
guarantees product quality, continuously creates new science and technology, and strides forward
steadily towards the peak of consumer’s satisfaction appraisal step-by-step.

White Goods Global Brand Share in 2008(Euromonitor)

 Company Shares (by Global Brand Owner) - Retail Volume - % breakdown
                           2001 2002 2003 2004 2005 2006 2007 2008
 Air conditioners
 Haier Group                 4.5 5.3 6.2 6.8 7.7 8.1 9.4 10.8
 GD Midea Holding Co Ltd     6.6 7.3 8.3 9.3 10.1 9.3 8.8 8.6
 Zhuhai Gree Group Corp      7.8 8.6 9.4 10.1 9.7 8.4 8.4 8.4
 LG Group                    5.2 5.7      6 6.3 7.2 7.6 8.3 8.4
 Panasonic Corp            -     -     -     -     -     -     -      3.2
 Samsung Corp                  2    2 2.1 2.3 2.9           3 3.2 2.9
 General Electric Co (GE)    3.1 3.2 3.3        3     3     3 2.7 2.4
 Electrolux AB               2.3 2.3 2.4 2.2 1.9 2.2 2.2 2.2
 Hisense Electric Co Ltd     0.6 0.7 0.7 0.7 0.6 1.5              2 2.1
 Daikin Industries Ltd       2.2 2.2 2.4 2.5 2.2            2     2     2
 Carrier Corp                1.5 1.3 1.5 1.8 2.2 2.1              2     2
 Whirlpool Corp              1.8 1.8      2 2.1 2.2 2.2           2 1.9

Hisense International., Marketing Dept                          9th Issue

CompanyShares(by Global Brand Owner)Retail   Volume % breakdown
                          2001 2002 2003     2004 2005 2006 2007 2008
Whirlpool Corp            13.4 13.3 12.8        13  15   13.6   14.8         14
Electrolux AB             11.4 11.4    11    10.8 10.2     10    9.7        9.5
Haier Group                   5 5.6     6      6.1   6    6.1    6.9        7.8
Bosch-Siemens               5.9    6 6.1         6   6    6.4    6.5        6.7
LG Group                    2.7 3.2 3.7        4.4 5.2      6    6.4        6.6
Hisense LTD                 2.5 2.7 2.8        2.8 2.7    3.3    4.3        4.9
Indesit Co SpA            -     -    -       -     4.4    4.7    4.7        4.5
Arcelik AS                  2.7 2.9 3.1        3.6   4    4.2    4.2          4
Samsung Corp                2.5 2.7 2.8          3 3.3    3.7    3.7        3.9
GE                          4.6 4.8 4.7        4.6 4.5      4    3.7        3.4

Welcome to China Import and Export Fair 105

Hisense International., Marketing Dept                                             9th Issue

Technology Time

Top Chinese Flat Panel HDTV Manufacturer Hisense to
Feature SRS TruSurround XT

SANTA ANA, Calif., March 26, the industry leader in surround sound, audio, and voice
technologies, announced today that the Hisense Electric Company, China's No. 1 flat panel HDTV
manufacturer, will release 40 new TV models during 2009 featuring SRS TruSurround XT(R),
which produces a thrilling surround sound experience over two built-in stereo speakers.

                                                                      "SRS is excited about
                                                                      working with a proven,
                                                                      partner like the Hisense
                                                                      Electric Company as
                                                                      we value the continued
                                                                      emphasis they place on
                                                                      the            collective
                                                                      multimedia experience
                                                                      of their products," said
                                                                      Allen H. Gharapetian,
                                                                      Vice     President     of
                                                                      Marketing for SRS
                                                                      Labs.              "This
                                                                      commitment,        along
with our ability to customize TruSurround XT to each TV model for optimum performance,
enables us to provide an uncompromised entertainment experience without any extra components,
wires or expenses."

SRS Labs continually pushes the limits of sound engineering to bring an even greater level of
value and performance to our flat panel HDTVs," said Zhan Jiajin, Vice President of Hisense
Electric Company. "With the physical constraints of today's slimmer HDTVs, achieving an
optimal audio experience is a greater challenge. Therefore, by working closely with SRS Labs to
custom-tune TruSurround XT on our television's stereo speakers, we've been able to ensure that
our customers receive the highest quality surround sound experience.

China Telecom, Hisense Join Hands

BEIJING, Mar 13, 2009, China Telecom Corporation Ltd. (SEHK: 0728 and NYSE: CHA) signed
a cooperative agreement on March 12, 2009 with home appliance manufacturer Hisense Group

Hisense International., Marketing Dept                                                 9th Issue

about their strategic partnership, citing a report.

China Telecom will preferentially procure Hisense CDMA mobile phones, which will be offered
to consumers with low-price telecoms services. Other Hisense products on China Telecom's prior
purchasing list include high-definition (HD) flat panel TVs, HD broadband media centers
supporting Internet download, energy-saving frequency-conversion air conditioners and

                                                                     Besides, China Telecom
                                                                     will offer high-quality and
                                                                     low-price telecoms services
                                                                     to Hisense and the Hisense
                                                                     distributors. On the other
                                                                     hand,       Hisense       has
                                                                     appointed China Telecom
                                                                     as its chief telecoms and
                                                                     information          service
                                                                     provider, as an effort to lift
                                                                     its efficiency. The partners
                                                                     will establish a special
working party to fulfill the agreement and hold senior regular management meetings to exchange

Communication Platform

“I am a mouthpiece,glue & bridge for Hisense”

—— interview with Steven Cohen, Marketing Manager for Hisense USA

The subsidiary company of Hisense in the US realized sales income of 998 million RMB yuan in
2008, 32.64 percent more than that in 2007, with controllable profit made from deficit to surplus
and much better than that in 2007. Steven, who was responsible for the market in North America
and was appointed as the marketing manager for the market in Canada, has helped Hisense in
building business in Canada. Hisense now has its products in 478 Canadian Tire stores, the biggest
household electrical appliance supplier in Canada. As a result, Hisense has achieved a
breakthrough in sales in the Canada market, with the sales income growing from zero to an
astounding 11.727 million USD. Steve was deservedly awarded “Outstanding Marketing

The journalist of “Hisense Times” interviewed Steven to better understand Steven’s story

                                                  - 10 -
Hisense International., Marketing Dept                                                 9th Issue

and his feelings about opening the North American market to Hisense.

Steven:It was a little more than two years ago after meeting Dr. Lin and Hisense at CES (the
Consumer Electronics Show) in Las Vegas. Dr. Lin invited me to join him and his team and
Hisense. I traveled to China and began my work. Originally I was hired by Hisense Group and
worked in Qingdao for Hisense International. This allowed me to understand the way things work
and to fully understand Hisense.

I knew very little about Hisense prior to joining the corporation. But, now I believe I am a good
“mouthpiece” for Hisense. I know many aspects of Hisense and believe in our goals and
objectives. I also respect our people and most importantly our quality products.

In Hisense USA, I am responsible for the sales and marketing initiatives for Hisense in North
America. In addition, I provide legal assistance and work our relationships. I guess you can say I
am the glue for our company here and the bridge between the two cultures. Hisense USA is quite
small and we all wear many hats, as we have many responsibilities. The most important aspect is

I was part of the team that went to Canadian Tire and persuaded them to be a strategic partner of
Hisense. We now have a great relationship with them and sell many home appliance and consumer
electronics products to them. Most importantly, we use the Hisense Brand for our TVs in their
stores. Canadian Tire is the largest retailer in Canada.

It’s quite easy to show our products and give presentations explaining who we are, but I find out
that once a retailer travels to China and visits the Hisense Tower, and our factories, we’ve signed
the deal. They truly know we are the best product by far in the market.

Every day we think about new and creative ways to sell our products and most of all retain our
customers that we already have established. Lawrence Li does a great job as the conductor in a
symphony does, in orchestrating the sales, marketing and operations of our company. I believe the
key to any successful business is in believing in your products and knowing and understanding
what you are selling.

I live with several Hisense TVs and other products. I believe in our quality and communicate with
my colleagues in China and the world to ensure we continue to build the best quality product at a
good price.

We are at a critical juncture during the next several years. Hisense has a great opportunity to
increase market share and develop as a top five global electronics company. Although we are in a
global challenge given the economy, bad times present good opportunities. There clearly is a good
place for Hisense in the American market. Trust, quality and good pricing are important and I
know Hisense will continue to believe in these three important aspects of our business.
These are very challenging times, however, as mentioned, we have a great opportunity through
hard work and ensuring our products are “second to none” I have strong confidence in Hisense

                                               - 11 -
Hisense International., Marketing Dept                                                     9th Issue

and Hisense America. You must have confidence and believe in what you are doing. A saying I
follow is to: Lead, Follow or get out of the way”. We are the window to our company. We must
believe in our products and our mission and goals. We have very good leadership and the “sky is
the limit”. Truly we have challenges due to the global downturn in the economy. However, I’m
sure, with hard work and diligence we will succeed.

In fact,being fluent in Chinese clearly helps in my day to day operations. In addition, I lived in
China for over seven years and in Asia for over 15 years. Although there clearly are challenges
integrating two cultures, the most important aspect is understanding. Within two cultures, there
isn’t a right and a wrong way. It’s more a matter or ensuring you achieve your goals using the
benefits of both cultures.

Culture Corner
By James Dotson

The dining culture in the United States reflects the individualistic attitude that is shared by most
Western nations. For instance, a different meal is ordered by each individual. Therefore, if you
have four people in a party, there will be four meals ordered, with each meal laid on the table
before each individual. It’s very common for individuals to order their own bottle of beer or their
own glass of water. From time to time, we’ll try each other’s meals if asked to, but for the most
part, we enjoy our own dishes that we ordered for ourselves. In other words, hands off the French

There is a sharp contrast between the dining culture in China and that of the West. The underlying
factor of this difference is found in individualism versus group-orientation (collectivism). In China,
it’s very rare for an individual to order his or her own meal. All dishes are ordered for the entire
party to share buffet-style, and in nicer restaurants, there is a rotatable center so that each dish can
be easily accessed by everyone. Bottles of beer or bai jiu (strong Chinese liquor) are certainly not
ordered for each individual but several bottles will be ordered for the entire table. Going even
further than that, it’s not customary for one to sip from his beer or wine alone. If you’re thirsty,
you must raise your glass for the entire table to toast together. A very popular way for the Chinese
to toast together is by one standing up, extending his glass, and saying “ganbei” (translation: “dry
glass” or “bottoms up”). Everyone will then drink their entire glass of beer or wine. Typically, this
is not done only once or twice in an important dinner party, but will be exercised several times
until large amounts of affection are shown by everyone for everyone at the table. As a foreigner, it
would be easy to feel that they’re just trying to get you drunk so they can watch you make a fool
of yourself. This is the Western way of thinking. Rather, the reasons for such strong
encouragement to continue drinking is merely to break down your defenses and allow everyone to
get to know the “real you”. There are no evil intentions.

                                                 - 12 -
Hisense International., Marketing Dept                                              9th Issue

Undoubtedly, as a foreigner, “ganbei” will be one of the first words that you will learn. If you
don’t like to drink, you better come up with a good medical excuse. Otherwise, 50 gam bei’s will
be raised in your honor and you better participate in every single one of them.

The Chinese believe that no bonds can be created through independent actions but can only be
created through taking actions together. The key word here in China is “group” and the dining
culture here is certainly no exception to the rule.

Editorial Committee
Consultant: Lin Lan John Huang Henry Liu Wang Ruiji Zhu Shuqin
Catherine Fang
Editors: Philip Wang James Dotson Jessie Li
Everyone is welcomed to give contribution. Please send your article or proposals to:

                                             - 13 -

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