Daewoo crosses the divide

Daewoo Electronics might have just launched its maiden range of own-label commercial microwaves, but the company is no stranger to the business.

It has been producing commercial microwaves for almost a decade, the difference being that the products in question always ended up with somebody else’s badge on them.

“It is only now that we are selling them under our own brand as Daewoo,” explains Simon Drought, sales director of Daewoo Electronics UK. “We are actually very excited about this opportunity because it gives us a chance to push the quality that we have got with these, but under our brand as opposed to other brands.”

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While Daewoo has the requisite manufacturing processes and infrastructure in place, it has had to start from scratch in terms of building a specialist distribution channel.

Given that the company is much better known for its consumer activities, the main focus ahead of the commercial launch has been to conceive an effective route to market strategy.

To heap further pressure on it, Daewoo has chosen the UK as the first market to sell the microwave range, so its progress will be keenly observed.

From the start, Drought and his colleagues realised the most important thing was to identify a partner with a proven track record in microwave oven distribution and strong coverage of the B2B dealer channel — criteria that led it to the door of Thurrock-based Valera.

It has signed an exclusive agreement with Valera, which means the distributor will be the only place that dealers can purchase the product range.

“Valera has got a long history selling commercial microwaves in the UK and they seem to us to be the ideal partner,” says Drought. “From a sales and marketing point of view we are big on consumer products but we don’t really have any background or route to market to sell commercial products, so we need a partner which understands that market.”

Daewoo will rely on Valera to generate demand for the kit among its customer base and develop the business. “They will be doing everything that you expect of a distribution partner,” notes Drought. “They will market, provide after-sales services and distribute the product to the end-customers. From what we can see they have been doing those things very effectively for other brands.”

Daewoo’s initial commercial microwave range will feature a heavy duty model and a programmable 1100 watt model, but a manual 1100 watt model and a medium duty 1500 watt model are waiting in the wings. All models have been designed specifically for the new range, ensuring they are different from the products it assembles for other brands.

While dealers and distributors will naturally want to evaluate what the newcomer has to offer, the company insists its lack of experience selling own-brand professional microwaves betrays its expertise in that field.

“Daewoo is a brand that has been around a long time and has manufactured these products for a long time, so [dealers] can have trust in us,” insists Drought. “Although we are a new brand into this market we are not a new manufacturer. Also, we are an established brand in terms of high-tech products, so they should have that confidence, and we are backing that quality up with a three-year warranty.”

The company will be hoping to replicate its achievements in the domestic appliance space, where as well as microwaves it produces refrigeration and laundry equipment. With manufacturing plants in China, Mexico and its native South Korea, it would certainly seem to have the pedigree to make a success of its latest venture.

Ongoing changes to the commercial microwave oven landscape — including Panasonic’s takeover of Sanyo, which for years has been one of Valera’s primary brands — have convinced Daewoo that now is the right time for it to begin selling a professional range under its own moniker. Drought stresses that it is not just a short term move, however. “This is a new venture for us, but we are in it for the long haul,” he insists.

Valera has now taken stock of its first Daewoo consignment and Kurran Gadhvi, marketing manager and area sales manager at the company, insists the offering is broad enough to satisfy everything from a self-service kiosk to a busy high street restaurant.

“There isn’t any restriction with this range,” he says. “For a commercial environment this is literally a range that will suit most requirements.”

Despite its historic ties with Sanyo, Gadhvi describes Daewoo as an “additional range” for Valera, but one that the company is very excited about given the potential for growth.

“In the commercial microwave scene in general, there are only four or five main key players and we really want to get Daewoo to the top of the tree,” comments Gadhvi. “It is going to be a long term strategy and we are not going to become number one straight away, but in years to come people will see the quality of this unit, and we want to push it like we did with Sanyo.”

Daewoo data

$2bn    Global annual revenues, the equivalent of £1.3bn
1971    Year the company was founded
1993    Date that Daewoo Electronics Sales UK (DESUK) was established
2002    Founded as a spin-off from Daewoo Corporation
40        Number of countries where it has a form of presence
64        Number of global production sites, and R&D and sales centres
4,000  Number of staff worldwide

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