On the contrary, Indians, Malaysians, Koreans and Chinese get their clothes dirty just like everybody else. And they don't like washing them by hand any more than our own forebears did in the early 1900s.

The appliance sector is also very different from electronics due to the size of the goods being sold. There's all the difference in the world between shipping, say, a laptop computer from Taiwan to Oklahoma, and doing the same with a full-size refrigerator.

"There's a heck of a lot of air in a refrigerator or a washer," says Steve Duthie, communications manager for Whirlpool Corp. (Benton Harbor, MI). "Parts procurement might be done in Asia for the U.S. market, but we largely manufacture in the regions in which we sell."

Beyond that, there are the supply chain issues. Unless you want to ship by air, it takes 4 or 5 weeks to transport goods 7,000 miles across the Pacific. This delay can cause major problems in an age of diminishing product life cycles and mass customization. In the United States, manufacturers can implement a change in product mix in as little as a day. The same process will take a month or more for products assembled in China, India or Southeast Asia.

As a result, while nearshoring of manufacturing work to Mexico and South America constitutes an immediate threat to American workers, investment across the Pacific represents a somewhat different situation. Global appliance manufacturers don't just see outsourcing to China as a means of survival. It's also an opportunity to enter a new, rapidly expanding market; to beat the other side at its own game.

Pioneering Efforts

In both China and India, the two powerhouses of the region, the ongoing surge in growth, productivity and spending, comes as a direct result of changes in government policy in the 1980s and 1990s. In China, in particular, barriers to free trade came down abruptly when the government decided to shift toward a free-market system.

In India, starting in the early 1990s, the government was more methodical in the way it dismantled the various tariffs and export controls that had isolated the country in the past. But with those barriers gone and with a population of more than 1 billion, the country is rapidly catching up.

The result has been that appliance manufacturers are now firmly committed to Asia, not just to take advantage of cheap labor, but to sell to those same people making all that cheap stuff.

And we're talking a lot of people. China now has a middle class of more than 100 million, more than a third again larger than the population of the British Isles. The country's economy has been growing at about 9 percent per year for the last 15 years. That rate is expected to cool off in 2005 and 2006, but it should still remain around 7 percent.

The Chinese mania for automobiles is well documented. In less than a decade, Beijing has gone from a city of bicycles to a city of cars. Much the same thing is happening with regard to Chinese kitchens and laundry rooms.

In India, growth has been slightly less, but the country is expected to continue to grow at a steady rate, to the point where analysts believe its economy may be comparable to that of China's within a decade.

As for the rest of the region, countries like Vietnam, Thailand and Korea are all expected to experience moderate growth both in production and consumption. Japan is expected to remain fairly static, both in terms of consumption and production, although domestic appliance manufacturing has declined in recent years.

Into the Mix

The appliance industry's response to these forces has been to invest marketing, sales and R&D resources in Asia, in addition to manufacturing facilities.

For example, air conditioner manufacturer Fedders Corp. (Liberty Corner, NJ) made its first foray into China back in 1995, with the establishment of a joint venture called Fedders Xinle, an effort that produced units primarily for export. Today, the company has seven manufacturing facilities in China. And in 2003, the company moved its international division's headquarters from New Jersey to Shanghai, followed by a new research and development center in 2004.

"China has become our primary production base as well as a strategic high-growth market for the company," says company vice president Rick Essex. "Fedders is the largest exporter of air conditioners from China, and we intend to leverage this strength to continue penetrating other high-growth markets such as India and the Philippines."

"This location is ideal because of its proximity to Fedders' five Yangtze River delta manufacturing facilities, our new international headquarters in downtown Shanghai and to University City," says Alex T. Lim, Fedders' vice president for international design centers. "Some of the many advantages of this location are closer proximity to our supplier base and access to a large group of talented engineers."

Also telling in terms of its plans for the region, the company is making significant investments in sales and marketing, and leveraging existing relationships with global retailers like Wal-Mart (Bentonville, AR) as part of an "aggressive push" into China's domestic market.

"Like its export base, China's domestic market for air conditioners is also growing rapidly," says Fedders CEO Sal Giordano Jr. "Only a decade ago, the retail environment consisted mainly of small shops and outdoor markets. In recent years, the transformation has been dramatic, and the retail landscape is now composed of hypermarkets and department stores, many of them national and regional chains."

And Fedders is by no means alone. GE Appliances Asia, for example, is headquartered in Hong Kong, with sales offices everywhere from Sydney to Seoul. Similarly, Whirlpool Corp. has made a serious commitment to the Asian market with three manufacturing facilities in India, two in China and sales offices throughout the region.

"Whirlpool in the late 1980s and early 1990s was a domestic manufacturer," says Duthie. "The company decided if it wanted to stay in this business and thrive, it needed a global strategy."

Duthie notes that with the exception of a microwave oven facility in China, the bulk of what Whirlpool produces in Asia is also sold in Asia. And the strategy is definitely paying off. In India, for example, the company has grown in just a few years from a nonentity to a market leader in the areas of refrigerators and washing machines.

"We've long said...you have to be in Asia if you are going to be a global player," Duthie says.

Not that being in Asia is a piece of cake. This is a region with plenty of domestic manufacturers, including Korea's LG Electronics Inc. (Seoul) and China's Guangdong Kelon Electrical Holding Co. (Guandong) and Haier Group (Qingdao), which recently opened a manufacturing facility in Camden, SC. Moreover, Asian consumers are becoming increasingly selective, thanks to dramatic increases in both individual purchasing power and supply.

"The region is highly, highly competitive," says Hean Bean Ong, senior vice president of manufacturing for the Asian Pacific region for Electrolux Group (Stockholm, Sweden). "There is considerable pressure to reduce prices."

Still, Ong says there is plenty of opportunity for Western manufacturers looking to stake their claim, thanks to their tradition of innovation and the quality of their products compared to some of the local no-name appliances on the market.

In the case of Electrolux, Ong says the company's reputation, coupled with its products' Scandinavian styling, make it an attractive choice for consumers. And he predicts that Asian and Indian preference for well-made products will only increase as the region becomes increasingly prosperous.

"It will happen," Ong says. "It's like Europe 50 years ago. People are changing from buying what they can afford to something that makes them happy."

What They Want

In terms of the kinds of appliances preferred by Asian consumers, tastes are slightly different, and it's important to know your customer-one of the reasons companies like Fedders are creating R&D centers in the region.

In addition to the obvious cultural differences-they make and sell a lot of rice cookers in the East-various aesthetic and performance characteristics can mean the difference between lackluster and robust sales.

In India, for example, consumers favor bright colors-lots of reds and yellows-while the Chinese apparently like silver appliances, as opposed to the standard white found in the West. In Asia and India, frost-free refrigerators are still a novelty, but are catching on. Also in India, where hot running water is often unavailable, many washing machines are built with internal water heaters. Similarly, because of water quality, filters are standard in the water dispensers of many refrigerators built specifically for the Asian market. Ong notes that for some reason, there is strong demand in India for refrigerators with built-in radios-go figure.

Then of course, there is the simple matter of size. Because most urban Chinese live in small apartments, they tend to buy appliances that are small as well.

"Go to the market before you design for the market," Ong says, summing up his company's strategy for accommodating tastes from around the globe.

Still, as Asia catches up in terms of infrastructure and standard of living, these kinds of contrasts are quickly diminishing as a kind of global standard emerges. One of the by-products of having sales and design offices on more than one continent is that companies can rapidly incorporate product innovations developed in, say, Bombay, into products manufactured in Illinois.

In an industry where increasingly sophisticated goods are perennially offered at lower prices each year, the ultimate beneficiary of the ongoing Asian expansion may be consumers everywhere.