- Career Development
The Brains Behind the Brazil Brand
Product Engineer for Midea-Carrier ABC JV
Felipe Vogt, 27, is a product engineer for joint venture Midea-Carrier’s Argentina, Brazil and Chile (ABC) operations. He is currently based in Midea International Division (MID) in the group’s global headquarters in Shunde where he helps manufacturers in China communicate with colleagues in Brazil.
In the field of home appliances, Brazil is a market of major strategic importance to Midea. Vogt uses his knowledge as a native Brazilian and trained engineer to help Midea tailor its products for the market in the Latin American country.
He took the time to talk to Advances about products, cultural differences and the difficulty of the transition from original equipment manufacturer (OEM) to original brand manufacturer (OBM).
ADV: Why were you sent to China?
Felipe: I am here on a one year program where I report to Brazil. I do a lot of factory visits related to products. In Brazil we were working a lot in the home appliances business and we were having a lot of issues during the projects, so I was sent here to speed up communication. My role is to build bridges between Chinese manufacturing and the Brazilian market, particularly focusing on quality and scheduling.
Interestingly, for each project, the number of times I have needed to communicate with Chinese manufacturers has not changed. Even though I am based here, I still need to talk to them about two or three times. However, what used to take me two or three days now only takes me one morning.
ADV: What appliances do you work with?
Felipe: I work with refrigerators, washing machines, fans, air coolers, water purifiers, water dispensers, mini bars, and other things. I don’t really work with kitchen appliances such as microwave-ovens and ovens, but overall my role is to make sure our guys in Brazil get what they want.
ADV: What are some of Midea-Carrier’s star products?
Felipe: I think our microwave-ovens have deserved their success in Brazil. With our own design and under our own brand it had around a 12 percent market share during the peak season last year, even though Brazil is not the easiest market right now. Also, our water purifier, the result of cooperation between the product division in China and the engineers in Brazil, has a completely touchless interface—unique in the market. These innovations are difficult to carry out but I am certain that the water purifier will be a success in the market.
ADV: What challenges does Midea have in building its brand in Brazil?
Felipe: At least two things: the first is that the product portfolio needs to match, for example the refrigerators, washing machines, microwaves, and dishwashers need to complement each other with their appearance and design. Brazilian consumers care a lot about this kind of thing. For instance a kitchen is no longer just a place to cook, it is a place to invite friends so it is important that, as well as being functional, the appliances look the part. We are working hard to make sure we help consumers select the product range that is most suitable for them.
Brazilian consumers are very design-orientated. A car may have a beautiful design but an under-performing engine. The refrigerator market in Brazil is one of the most difficult in the world. Refrigerators need to have new and innovative features, such as fast cooling for beer, in addition to the usual expectations like internal, well-designed support for every kind of item, like cheese, ham, eggs, cans, bottles, etc.
The second issue is quality. Consumer demand in China has a wide variety of standards, therefore the products Midea makes for the domestic market vary in quality. There needs to be a minimum standard of quality for export, and we are working on that with MID, because it would be very difficult to recover from a poor reputation developing out of quality issues.
ADV: What advantages does Midea have in the Brazilian market?
Felipe: One of the biggest advantages is that Midea has decades of experience as a manufacturer of world-class products for the biggest brands in the industry. Midea already knows how to make the best products, it just needs to apply the same standards to its own brand as it does to others. As a new brand, it can carve out a niche as high quality but affordable.
ADV: Who are the competitors?
Felipe: Whirlpool has two very strong brands in Brazil, Brastemp and Consul. There are those two and Electrolux. They are the market leaders. Korean brands like LG and Samsung are getting really strong there and will probably grow there over the next few years.
ADV: You know so much about the market, have you always been in this industry?
Felipe: Not really. When I was still at university, I joined a start up with two PhD candidates. After that I went to Ireland to learn English and be fully independent. Selling cable television subscriptions door-to-door in the rain was the worst job I ever had but also a great experience.
Upon graduating, there are three ways of getting a job in Brazil: an internship, a trainee program or being recruited directly off the market. The latter requires prior experience. I was among eight of 5,000 applicants to be selected for Midea-Carrier’s graduate trainee program. It helped that I went to a top university, Universidade Federal do Rio Grande do Sul (UFRGS), had prior experience as an entrepreneur and had lived in a foreign country.
ADV: You already had international experience when you came to China. How does it compare?
Felipe: It is very different. Originally, I thought Ireland was pretty different from Brazil. But as soon as I came to China, I felt like Ireland and Brazil could be the same place. Between myself and all of the foreigners I know here it feels as though we are all from the same place, sharing the same culture.
When at home, I can do most things on cruise control. But in China, everything requires great thought and care. It has been a great experience because everything is so different. Explaining the virtues of sharing the bill can take 20 minutes, but we are the ones who need to adapt. Adapting is tough but worth it.
ADV: Do you think cultural differences are a problem for Chinese brands?
Felipe: Right now I am reading a book called “The Samsung Way” and it talks about how they changed the culture of the company. Thirty years ago, Samsung was an OEM whose own brand was largely known for cheap products.
Then things changed. If a quality issue was raised then the entire production line would be stopped until it was fixed. The culture of simply papering over problems was rooted out and they began to ruthlessly pursue the highest quality standards. An OBM requires more long-term thinking than an OEM. It means identifying the roots of problems rather than advancing at all costs.
They also began to employ culture experts. For example, if they wanted to break into the Mexican market, they would give somebody a camera and a computer and allow them to spend a year in Mexico learning the language and learning about the culture, with the long-term aim of learning about the market.
Most importantly, the best products that Midea makes need to be under the Midea brand. Every person who works for Midea needs to believe in the products and the brand.
ADV: And lastly, how do you spend your free-time in Shunde.
Felipe: Some days I go out for a few beers with colleagues; I play football in the local team; at weekends I go running or cycling in the park; during holidays I like to travel around China and Southeast Asia. I have been to Beijing, Shanghai, Thailand and Singapore.
I also want to go to Guilin, Macao, Indonesia and Tibet if I still have time. But I am not sure if I will be able to go to all of these places in the next year. If not there is always next time.