Chi-Fi - Forbes

Chi-Fi - Forbes



Interesante artículo en Forbes sobre el Chi-Fi o hi-fi chino.

Chi-Fi

China’s audio industry is starting to make a big noise–it just needs to get its domestic audience to listen.
A quiet revolution is shaking up the rarefied world of high fidelity as a new generation of Chinese audio manufacturers offers consumers a value proposition that is radical by the industry’s standards–great sound at great prices.
It was a phenomenon waiting to happen. For years established hi-fi manufacturers in Europe, the U.S. and Japan have alternately impressed and turned off music lovers with their tall claims, conflicting views and extravagant prices. It’s a world where $6,000 speaker wires receive the best-buy award from audio magazines. That despite the fact that sound engineers can’t agree on whether fancy speaker wire is measurably better than the ordinary copper wire sold for $10.
Now Chinese audio manufacturers are offering consumers sweet sounding and attractive-looking CD players, amplifiers and speakers for a quarter the price of those from snooty Western manufacturers. “Quality for quality, Chinese hi-fi can’t compare with the best, but if you look at the sound you get from a good Chinese system for the price, it’s unbeatable value,” says Billy Kim, who owns hi-fi stores in Beijing, Hong Kong and Los Angeles. “A person who can spend $10,000 on a stereo should stick with known companies, but for someone looking to spend $3,000 on a stereo, I’d say look at Chinese products first.”
Consumers seem to be listening. Internet chat groups and blogs are percolating with consumers’ happy tales of acquiring excellent stereos at affordable prices.
The industry’s success is a grassroots phenomenon. As Yu Jian Bing (who owns Beijing Yushang Electronic Audio Technology Co., which sells under the brand name Classic Audio) tells it, a bunch of local audio buffs used to tinker around, and as they got more sophisticated and China’s overall electronics capabilities improved, they came up with their own designs and products. “Nothing was planned,” Yu says. “It just happened.”
Over the past two years several Chinese boutique manufacturers have unveiled a range of fine products. For example, the futuristic-looking SCD-T200 valve CD player from Shenzhen’s Shanling Digital Technology Development, going for about $2,000 in the U.S. and Europe, has impressed audiophiles and is competing with coveted brands such as Meridian and Linn Sondek.
Also fast gaining respect are Chinese brands such as Zhuhai Spark Electronic Equipment’s award-winning Cayin amplifiers; Jinlang Audio’s Aurum Cantus brand of speakers; and Zhongshan Shengya Audio’s Vincent-brand amplifiers and CD players.
At a recent audio show in Beijing, established foreign brands, such as Dali and Onkyo, had the biggest spaces and exhibited a wide range of products, each supported by glossy brochures. But it was hard to ignore the Chinese products showcased in smaller rooms, where visitors were handed photocopied technical specification sheets. “The Chinese stuff is getting much better,” says Lars Kristensen, a salesman with the U.S.’ Nordost. “But it can’t compare with Western companies who’ve been refining their products for decades. In ten years maybe. But not now.”
Perhaps, but audiophiles’ perception is often affected by marketing, despite pretentious protestations to the contrary. That’s a lesson that the Chinese hi-fi industry is learning. Right now it’s the performance-to-price ratio of Chinese audio that’s got people talking. But ultimately marketing determines success, says Ling Junyan, chief designer with Chengu Xindak Electronic, which makes amplifiers and CD players. “Our products are strong, but our marketing is weak,” says Ling. “That’s what we need to do, market–not just sell our image but build up service centers, improve our reliability and build quality and learn what Western listeners want.”
That won’t be easy. China’s audio industry is made up of embryonic, technically driven companies housed in tiny workshops. That’s what the Western hi-fi industry looked like when Alan Dower Blumlein invented the concept of stereo sound in the 1930s. But the hi-fi industry is different today. Only a few Western players, such as the U.S.’ Vandersteen Audio and Italy’s Sonus Faber, continue to make great products in small quantities, but systems from such manufacturers can cost upwards of $10,000, generally more than even upper middle class music lovers want to pay.
At the other end of the market is mass-produced equipment from companies such as Sony and Bose, which offer good sound systems for about $1,000 to $1,500. Kim says Chinese companies lack the finesse to compete in the high end of the market; and the scale needed to succeed in the low end is a distant dream. But these companies could reignite interest in the middle segment–occupied by brands such as Rega and Creek–where systems can cost $3,000 to $6,000.
Right now Chinese companies rely mostly on local media, the Internet and word of mouth to market their products. That’s not enough to become global players. Most consumers rely on reviews and magazines to guide them. Hi-fi companies spend large amounts on advertising in the magazines and Web sites that promote them, says Kim. The result is that image and reputation, not necessarily quality, is what drives purchases.
Another indication of the importance of image is that most companies spend almost as much on the cabinets and external look of their products as they spend on the components, says Kristensen. “Hi-fi is a complex thing–it’s about sound, but it’s also about how it makes someone feel,” he says.
Many Chinese audio companies have caught on to this, and new designs are chic. But they have a long way to go in terms of quality, reliability and design, and Western manufacturers are using this to discredit Chinese products. At the trade show in Beijing a salesman for Jamo, a Danish brand, asked, “Can China really make a real hi-fi system?”
Ironically, the people most susceptible to believing this argument are Chinese buyers. Zhang Tong, 42, a businessman in Beijing looking to buy a new stereo for his new apartment, said he would spend up to $6,000 on the right system. “But I’ll stay away from Chinese products,” he said. “The quality is not that good, at least that’s the feeling of us Chinese–we prefer overseas products.”
That attitude’s shrunken the home market for brands like Classic, which sells more than half its products in Europe and the U.S., says Yu. “In some ways Western people are more open,” he adds.
The “made in China” drag on sales vexes people such as Yu. What’s even more vexing is that a number of foreign audio companies are having their products manufactured in China, though they don’t like to talk about it, says Zhao Dao, 54, a hi-fi expert in southern Guangdong province who has a radio show and also runs his own Web site. In fact, manufacturing equipment for foreign audio companies is what gave Chinese hi-fi companies their initial boost, he says. Some foreign marketers are even importing Chinese products and rebadging them with exotic Western brands–at high markups.
Another way Chinese audio entrepreneurs are getting around the country-of-origin stigma is by buying established but faded Western and Japanese brands and breathing new life into them. Many popular “British” brands, such as Wharfedale, AudioLab, Mission and Quad, that position themselves as boutique offerings built for connoisseurs are in reality owned by Shenzhen’s International Audio Group (IAG). Many of IAG’s products are now built in China, as are products carrying the Sansui, Akai and Nakamichi brands, which are now owned by Hong Kong’s Grande Holdings Ltd.
“Chinese businessmen usually don’t want to make it public that they’ve bought these brands because Chinese consumers will suspect the quality and complain about the price if they knew the products are made in China,” says Zhao. “This can be a good strategy if the company wants instant profits. But it won’t be good for creating their own brand names.”
That isn’t likely to happen soon. “Some large companies don’t have a long-term vision of building a brand,” says Zhao. In his view the low margins Chinese manufacturers are maintaining is what might kill them in the long run: “It’s true that products that cost $300 to make sell for $3,000, but hi-fi companies need huge margins to develop.”
Ling says dealing with naysayers is part of being Chinese. “People always tell us what we cannot do,” he says. “Then when we do it, they go on to the next thing we cannot do. But that’s okay, it only makes us want to do that next thing.”