What are the key factors behind Arcelik investment in the Bangladesh?
First of all, I am very happy to be in Bangladesh, which is one of the fastest-growing countries not only in South Asia but also as per different global rankings. We have a historical relationship with Bangladesh. As a Turkish citizen, this makes me very happy to be here today.
We do believe in this country’s future, its people, entrepreneurs and values. We have intensively grown in Asia-Pacific in the last decade with investments in China, Thailand, Pakistan and India in a bid to establish a trade corridor along the historical Silk Road.
Bangladesh is one of the fastest-growing economies in the world and the acquisition of Singer Bangladesh is another significant step in our Silk Road strategy and it will further accelerate in the medium to long term. This market offers huge potential with its expanding middle class and young population.
We aim to build Bangladesh as a strategic regional hub within our operations. The growth in our industry will come from Asia-Pacific in the next decade, and Singer Bangladesh is a strategic investment choice for Arcelik. Having the eighth-largest population in the world, Bangladesh is a promising economy.
Tell us about the core strengths of Arcelik?
Arcelik is a brand that was born about 60 years ago in an emerging country like Turkey and has become a global brand. It was possible because of three key factors - quality human resources, R&D and we are doing business in a sustainable manner. We invest our earnings in the same country we earn from.
Arcelik is one of the leading global home appliance manufacturers. It is the undisputed leader in its home market, Turkey, in white goods, built-in appliances, and air-conditioners.
Today, with over 40,000 employees throughout the world, 12 brands (Arcelik, Beko, Grundig, Blomberg, ElektraBregenz, Arctic, Leisure, Flavel, Defy, Altus, Dawlance, Voltas Beko), sales and marketing offices in 48 countries, and 28 production facilities in 9 countries, Arcelik offers products and services to many different regions of the world.
Arcelik is the market leader in Romania with Arctic brand, South Africa with Defy brand, and Pakistan with Dawlance brand. In Europe, Beko is the second best-selling brand and is the leader in the free-standing white goods market. Beko has been the leading brand in the UK, and it is the market leader in Poland and the free-standing segment of France.
Arcelik is part of Koc Group, the largest investment holding company in Turkey and the only Turkish company in Fortune Global 500. Arcelik's transformation journey is now part of the curriculum at several universities worldwide, including Harvard.
Since Arcelik took over Singer, what are the key areas of improvement so far?
At Arcelik, we aim to develop products suitable for our local customers’ needs. In Bangladesh, we will be doing it by combining our technology and R&D capacity on a global scale with Singer's strong position in the country’s market.
For example, Singer recently introduced a new series of refrigerators and these products have been developed exclusively to support Bangladeshi consumer needs with features like Fresh-O-Logy, NutriLock, and Base Drawer Stand.
Singer Fresh-O-Logy is an innovative technology that helps keep the vegetables and fruits fresh for up to 20 days while its NutriLock technology preserves vitamins (such as vitamin A and C) in fruits and vegetables in the crisper box by simulating the 24 hours Sun cycle. Base Drawer Stand allows users to store essential dry cooking ingredients such as onions, garlic, ginger in a drawer under the refrigerator.
All these features are very relevant to the needs of Bangladeshi consumers. To innovate these features, we had to do lots of groundwork, including R&D, keeping Bangladeshi consumers at the heart of the entire effort.
You will see how we are adding value to the quality and R&D aspects of products, using very modern technology, and doing the production process in Bangladesh. This is our promise to consumers of Bangladesh that we are ready to bring our best resources to the country.
Have you taken measures to strengthen the brand?
Singer Bangladesh has 117 years of history. Its motto was ‘Trusted for generations’. Singer Bangladesh transformed its motto to ‘Embrace life now with Singer’. The insights we got from our customers in Bangladesh showed us that they are very busy and working hard.
They want to improve their families' lives and not lag behind society. Consumers are looking for convenience not later but now. Singer is paying attention to consumers' modern-day needs. We transformed Singer's trusted brand perception in Bangladesh with the ‘Embrace life now with Singer’ slogan. We believe ‘brand’ means sustainable trust between consumers and the company. We will keep investing in the Singer brand in Bangladesh.
The digital platform has been an emerging marketplace in Bangladesh alongside brick-and-mortar stores. How are you going to cope with this in Bangladesh?
We have a similar business model in Arcelik Global as we have in Bangladesh. We have developed a system of e-commerce connecting our dealers. We call it the ‘shared economy’. It means you share your profits with your dealer. In Europe, we follow the system of shared economy. We are doing the same thing here. Because of this strategy, Arcelik became the number one Omnichannel transformation company in Europe.
Let me explain. For example, e-commerce giants like Amazon and Alibaba are very big worldwide. On the other hand, small shop owners or dealers are being posed with future danger due to those e-commerce giants. At our company, we created an e-commerce system together with our dealers.
In the future, we are planning to see the same success story in Bangladesh. We want to bring our dealers, shops and e-commerce under the Singer family.
Arcelik has become a case study at Harvard University and I went there several times to share the philosophy of Arcelik. The shared economy is one of our main philosophies.
How do you plan to address the challenge of local consumer durable brands dominating the market?
First of all, we always believe in competition and we always respect our competitors in all countries. As you said, there are strong players in the Bangladeshi market as well.
Our target is to bring the latest technologies to the country, to offer high quality and energy-efficient products, thus making consumers’ lives easier. We are emphasizing on adding these values instead of looking at the number first.
We want to increase the expectation level of Bangladeshi Home Appliances users. And at the end of the brand offering, good services and products will win the game. This is a global rule and now we want to win the heart of the consumers of Bangladesh.
From the experience of operating in the Bangladeshi market, how do you evaluate the prospect of the economy of Bangladesh?
Bangladesh is one of the fastest-growing economies in the world, and it will further accelerate in the medium to long term. Its GDP growth trend till the outbreak of the pandemic had been phenomenal. Bangladesh yields the highest economic growth in this region even during the pandemic when most of the South Asian countries yielded negative growth.
Besides, lots of infrastructure development work has been going on. We all know that Bangladesh is one of the top exporting countries in the readymade garments industry. The country has the potential to transform into an export hub in many other product categories as well. At Arcelik Global, we are already investing for Singer and we will invest more. We want to make Bangladesh one of our export hubs for this region.
We want to start exporting industrial goods that are being produced in Bangladesh. In addition to exporting RMG, this country has very good potential to export industrial goods, such as home appliances.
Would you like to give any indication of your future investment plan in Bangladesh?
Recently, we have finalized the acquisition of the famous Japanese brand Hitachi. It shows that we are always looking for opportunities.
Since the acquisition of Singer Bangladesh, we have had a $9.4 million technology investment. Given our medium and long-term goals in the Bangladeshi market, we need to invest more into different aspects of the business. It is a continuous process.
We are undergoing a number of new projects, which obviously needs more investment. However, we will be sharing the specifics of these investment plans at the right time. We have further investment plans in facilities, production, product range, and marketing and communication.
How important is sustainability in Arcelik’s overall business strategy and how are you going to address this in Bangladesh?
We have to make all our investments taking sustainability into consideration, otherwise, there will not be a world to live in after 2053. I have responsibilities to my children for them to inherit a planet to live and as a company, we want to ensure a sustainable world. Globally, we have been the first zero carbon company. We will maintain the same standard in Bangladesh.
How do you evaluate the Turkey-Bangladesh relationship?
I think these two countries discover each other every day. And as a big company, we want to contribute more to the relationship between Bangladesh and Turkey.
The bilateral trade between the two countries is worth more than $1 billion. Bangladeshi exports to Turkey have been dominated by apparel products. The shipbuilding industry of Bangladesh has also been identified as a potential sector for Turkish investment.
