By Chen Yingqun (from chinadaily.com.cn)
Venerable piano maker that goes back nearly 160 years sees china as an important part of its future.
Zhang Yuan, a 26-year-old Beijing resident who has been playing the piano for about 10 years, was on the verge of drooling over the Steinway in front of her. There was an ancient dragon logo on one side of the body. On the other were Chinese calligraphy carvings. The music stand took on the shape of a traditional Chinese fan, while the stool looked like a table for the guqin, a seven-string Chinese zither.
A Steinway piano is given some loving attention. Although sales of Steinway grand pianos have been affected by the economic recession in Western markets, the company found a new path to success as it seeks to expand in China.
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“I never dreamed Steinway would make a piano full of Chinese elements,” Zhang says. “It’s a fantastic combination of ancient China with the modern West.”
The piano, called the Steinway & Sons’ Charm of The Dragon, is the company’s first joint project with Tian Jiaqing, an antique expert, and the first commemorative Steinway piano in China. Made especially to commemorate the Year of the Dragon this year, it sold for 6.9 million yuan ($1.1 million; 850,000 euros) at the China Guardian 2012 Autumn Auction in Beijing last month. |
For Steinway, it’s rhapsody in red
Sold through the Chinese mainland’s oldest auction house, the piano is not simply a symbol of Steinway’s growing popularity in the country, it represents a new path for the company as it seeks to expand in the world’s second-biggest economy. About 5 million people in China play the piano, with the number growing by about 20 percent annually, says Feng Yuankai, deputy secretary-general of the China Musical Instrument Association.
“China is the future,” says Werner Husmann, president of Steinway & Sons’ Asia-Pacific division. “It has the fastest growth, and it is stable. So every dollar we’re supposed to spend, it first of all will go to China.”
Steinway & Sons, a 159-year-old company with headquarters in Hamburg and New York, has six divisions around the world. Sales last year reached $215.5 million (166.5 million euros) for the company, which has 1,000 employees who make 2,000 pianos a year. It has a network of 23 dealers in China.
After its first foray into establishing a presence in China (in the form of a small office) in 1999, the company established Steinway Piano (Shanghai) Co Ltd in 2004. It now has a warehouse and distribution center that offers technical support and training for dealers and customers, says John Patton, president of Steinway Piano Shanghai. The company aims to spend more on advertising and promotions next year.
According to the 2011 annual report of the parent company Steinway Musical Instruments Inc, sales of Steinway grand pianos are critical to profits and have been greatly affected by the economic recession in Western markets. In China, Husmann says, the situation is different.
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“We have grown on average by something between 14 to 16 percent every year,” he says. China has recently surpassed the United States, the world’s largest grand piano market, to become the top market for the most expensive Steinway pianos. Steinway grand pianos range in price from 680,000 yuan to 1.6 million yuan in China. Steinway’s Crown Jewel collection of grand pianos sell for at least a million yuan and are experiencing annual growth of 20 to 30 percent on the mainland. |
“In the past three years, we sold mostly Steinway special pianos, limited editions, Crown Jewels and customized art case pianos in China,” Husmann says. “Our sales here are even more than in the US.”
Despite the slowdown in China’s economy this year, the piano market has been stable, mostly because of increasing disposable incomes and more families and institutions buying high-quality pianos.
“In some surveys we did, many dealers told us that their sales revenue hasn’t been affected, although the number of units has declined, because more people tend to choose pianos that are more expensive,” Feng with the China Musical Instrument Association says.
Outside the realm of musical professionals, Steinway & Sons was virtually unknown in China when it arrived in the country, and Husmann says it has had a cautious growth.
“We didn’t come to China to jump in, make a lot of money and go,” says Husmann, also the managing director of Steinway & Sons Europe. “We wanted to develop this market. That takes time.”
Husmann says people in China know Steinway mostly for its high prices, but few understand its philosophy of making the best piano possible. Thus, it has done a lot to educate dealers, technicians and consumers.
“We know that we have to do a lot of education, to help people better understand what’s Steinway, what makes Steinway different and why it’s good to have Steinway.
“For us, what is very important is to stick to our philosophy of marketing. As you know, in China most things are sold by discounts, but Steinway hasn’t been sold by discount. Steinway products have certain value. How can we discount value?”
Steinway also finds and educates technicians from all over China, teaching them how to offer good technical service. The most important part, Husmann says, is to get the pianos to more people, to showcase them in various events, to get people to listen to it or even play it, such as in music schools, concert halls and at exhibitions.
“Everybody sees a price difference, but he must understand why is that, what’s the real quality behind it, and why is it so much different.”
Feng says the growing middle class and Chinese people’s desire for better quality and service have helped Steinway’s business grow.
“In the past, most consumers had difficulty in choosing pianos by themselves,” he says. “But now they can afford better pianos. Their brand awareness has been stronger, and they attach more importance to quality and service.”
To target a wider group of consumers, Steinway is providing various types of pianos in China: Steinway’s standard ebony pianos; its customized art case pianos, which can cost millions of dollars; as well as the Boston, Essex and Lang Lang brands, which are designed by Steinway and made by other manufacturers in Asia. The prices for the Boston line range from $7,300 to $50,400; the Essex is priced from $4,600 to $18,500.
Husmann says Steinway has been making art case pianos for Chinese consumers since 2008. “There are many people who really want to have the best piano, want to have something special only for them.”
The most expensive art case piano sold thus far is the Sound of Harmony, which was sold for $1.2 million to a Chinese collector in 2008.
Lang Lang was giving a master piano class at Harvard University on Oct. 29, 2011 in this picture. (photo by David Li)
The line of Lang Lang pianos is an exclusive brand for China that began in 2006 and aims to give better pianos to young music students. It is named after the Chinese pianist Lang Lang, who gives advice on the design and feel of the pianos.
“Lang Lang is Chinese, and in the meantime he becomes a symbol for the young people, and beyond that,” Husmann says.
He says Steinway & Sons now has a market share of more than 70 percent for top-end pianos, while the Boston and Essex lines have a market share of more than 60 percent of the middle level.
But the greatest challenge for the company is to reach more customers. Early last month, it exhibited its pianos at the Music China expo in Shanghai.
“We don’t go to fairs in Germany or the US because people there know us,” Husmann says. “But here it is very important.”