In a world driven by technological leaps and rapid globalization, Puppyoo (Chinese: 小狗电器) has emerged as a shining example of how a home-grown Chinese brand can capture international markets. Established in 1999, the company has embarked on a journey from humble beginnings to becoming a technological powerhouse in the realm of household cleaning devices. With a firm commitment to its mission – "to provide the best vacuum cleaners for households worldwide"
In an exclusive interview with EqualOcean, Cai Jun, the Senior Vice President of Puppyoo Group, shared insights into the brand's journey, challenges faced, and strategies employed to conquer the global market.
From Humble Origins to Global Recognition
Puppyoo's rise to prominence has not been without its share of trials and triumphs. As Cai Jun reveals, the company's initial strategy was to cater to the local market with affordable, low-end vacuum cleaners. However, recognizing the potential of the Chinese market and the need for value-driven products, the company pivoted towards a premium positioning, focusing on the higher-end segment. Puppyoo positions itself as a premium alternative to established brands like Dyson, while also ensuring value for its customers.
"China offers a unique advantage with its ability to command premium prices for quality products," explains Cai Jun. "While price-driven strategies might work temporarily, long-term survival necessitates a focus on value and quality."
Puppyoo 's strength lies in its specialization. While competitors like Haier, Midea, and Xiaomi diversify into various product categories, the company remains dedicated to perfecting its craft in vacuum cleaners. Cai Jun emphasizes, "We've dug deep into this category, accumulating over two decades of industry experience and technical expertise. Our specialization sets us apart as a brand that consumers can trust."
The Art of Reaching the Right Audience
A deep understanding of its consumer base has been pivotal to Puppyoo's success. It is safe to say that Puppyoo has cracked the code when it comes to reaching its target audience.
"The age demographic typically falls between 35 and 45," Cai Jun explains. "This group values efficient, effective solutions that simplify their lives, and that's where our products come in." The brand's marketing channels span both online and offline platforms, harnessing the power the brand caters primarily to three segments: pet-owning households, upper-middle-class families, and high-level professionals. These groups share common attributes like their affinity for quality, convenience, and a willingness to invest in superior home appliances.
In terms of online platforms, Puppyoo utilizes social media SNS, and platforms like Google, Facebook, and YouTube to create a suitable marketing approach for each region. The company also relies on a network of physical stores in select locations to create a community-driven marketing approach, tailoring its efforts to resonate with local cultures.
Currently, Puppyoo benchmarks its pricing against Dyson, often offering similar product capabilities at 70% of their price, shares Cai Jun. This approach not only helps in maintaining a competitive edge but also contributes to the brand's profitability.
Overcoming Challenges through Localization
While Puppyoo has successfully navigated its global expansion, the journey has not been without challenges. "Localization is the crux," Cai Jun asserts. "Understanding local consumer behaviors, cultural nuances, and adhering to local laws are paramount."
To ensure seamless localization, the company has established local subsidiaries and teams, allowing it to tap into local insights, adapt to local preferences, and swiftly address challenges. The challenge of managing diverse teams across cultures is a common obstacle when expanding abroad. However, Cai Jun assures that the teams are not divided by culture, but united by a common goal.
Cai Jun shares a successful case from South Korea, where the brand started with more affordable offerings but gradually transitioned to higher-end models. The company’s China-based teams primarily manage product, cost, and supply chain management, while most sales (around 80%) are from South Korea. “It’s a harmonious relationship where each team plays to its strengths," he adds.
Product Orientation Philosophy and C-End Market
Cai Jun shared some insights for brands aspiring to venture into global markets: “Localization and a comprehensive multi-channel approach are paramount. However, the bedrock of a successful brand global journey is an exceptional product." He underscores that without a strong product foundation, the entire premise of brand globalization becomes futile. For example, Puppyoo puts great effort into after-sales service. The company currently employs two strategies: for capable regions, the company provides independent repair services, while for other regions, they rely on agents for repairs. He stressed the importance of product quality and customer experience, stating that the company will always prioritize user experience, even offering repair or replacement services for users in certain situations.
Cai Jun also mentioned the business model of Puppyoo, stating that the company primarily focuses on the B2B market, with agents as the main clients, and also collaborates with large B2C companies such as Carrefour and Walmart. Despite this, he firmly asserted that the consumer market remains a major area of concern for the company. He expressed that even though most sales are realized through agents, the end users of the final products are still household consumers. Cai Jun stated that Puppyoo will always maintain a close focus on the C-end market to ensure the quality experience of their products.
Customer Relationship Management
When it comes to managing and maintaining the global B2B customer network, Cai Jun highlighted the importance of diligence, communication, and sincerity. He pointed out that customer relationships require actual personal contact and communication, especially crucial under the influence of the pandemic. He emphasized the significance of meeting with customers, understanding their needs, resolving issues, and sharing information. Furthermore, he mentioned that although in foreign markets, especially in countries like Germany, customers prioritize practicality in business dealings, they also greatly value social interactions. Therefore, when interacting with overseas customers, Puppyoo focuses on building genuine relationships with them.
Cai Jun also believes that user experience is key to Puppyoo’s future growth. He mentioned the Long-Lasting Vacuum Cleaner (Pro Rinse series) which addresses the common issue of short battery life in wireless vacuum cleaners on the market, using removable batteries and high-density batteries to solve this problem. He believes that this kind of innovation will become the main driving force for the company's future growth.
Discussing the future development trends of the small home appliance market, Cai Jun provided insights for both the domestic and overseas markets. He believed that in the domestic market, despite the current low penetration rate of around 20%, there is tremendous potential in the market over the next decade. However, the current economic situation and consumption downturn have impacted market development. Cai Jun predicted that the domestic market might remain at a bottom status for the next three years before experiencing a gradual recovery. For the overseas market, he mentioned that although recent times have seen economic challenges, the demand for overseas markets still exists. He emphasized that the overseas market possesses relatively rigid demand, with higher product penetration rates, indicating significant opportunities. While the growth rate might slightly slow down, Cai Jun expects steady growth in the overseas market over the next three years.
In terms of sales distribution, Cai Jun stated that Puppyoo is gradually expanding its presence in overseas markets. Currently, overseas sales account for about 30%, and he predicts that within the next two to three years, the proportion of overseas market sales will undergo a reversal, reaching or even surpassing the level of the domestic market.
When discussing the overseas market strategy, Cai Jun emphasized that Puppyoo will focus on two core strategies. Firstly, they will strive for the highest product quality and user experience, continuously enhancing product competitiveness. Secondly, they will continue to expand the brand influence in overseas markets, actively establishing a presence in key markets, ensuring the brand gains more recognition on a global scale.