Business executive Tan Hong joined Samsung Group's China home appliance division in 1995 and was immediately impressed by the South Korean behemoth's culturally sensitive interest in Chinese consumers.
Tan warmed to the appliance and electronics manufacturer after he was initially assigned to run a charity-brand awareness project that focused on donating second-hand computers to poor students in the remote mountains of Hebei Province.
Today, after 20 years in China, Samsung is trying to keep those warm and fuzzy feelings alive. But it's facing cold challenges including competition from Chinese appliance makers in small cities and complaints about the company's executive hiring practices.
Back in the 1990s, Tan's appreciation for Samsung's corporate culture grew after he learned most Korean senior executives can speak Chinese fluently. Newly hired executives are routinely sent for language lessons at Peking University or Tsinghua University in Beijing. They're also given time to travel around China, study customs and get to know the people.
New Chinese employees are likewise sent to Samsung headquarters in Seoul for several months of marketing and corporate culture training. Tan's training lasted six months, deepening his appreciation for the company.
Since Samsung opened its China division in 1992, executives have been busy making friends and cooperating with the provincial and city governments that strongly influence China's business climate. The company has signed numerous factory deals in exchange for local government subsidies, land rights and preferential policies.
Three northeastern provinces with large numbers of ethnic Koreans – Liaoning, Jilin and Heilongjiang – were targeted for factory investments in 1995. Samsung then expanded into one of the nation's manufacturing hubs Guangzhou Province and the wealthy cities of Beijing, Tianjin, Shanghai and Suzhou.
Wang Zhile, a research fellow at the Ministry of Commerce-affiliated institution Chinese Academy of International Trade and Economic Cooperation, said Tan's impressions in the 1990s were not misplaced.
Samsung's decision to invest heavily in Tianjin manufacturing plants underscored its good relations with local government officials, said Wang. Samsung has reportedly invested US$ 10.6 billion in China since 1992, including US$ 1.6 billion last year. It plans to add US$ 2.16 billion worth of projects this year, and more in the future.
"Samsung has a dozen subsidiaries in Tianjin alone," Wang said. "They can get special treatment from local government.
"Of all the multinational companies, Samsung is the most devoted to knowing the Chinese market," he said.
And for good reason: A Samsung executive who declined to be named said any multinational that wins hearts in the huge Chinese consumer market can win the world.
China's 20-year-old love affair with Samsung, however, may have hit a rough patch.
Industry sources report strong demand in China for Samsung mobile phones and TVs, but weakening sales of home appliances, especially refrigerators and air conditioners, in the face of competition from Chinese manufacturers such as Zhuhai Gree Electric Appliances.
According to the Beijing-based consulting firm China Market Monitor, Samsung's share of the domestic consumer refrigerator market by units sold was 2.17 percent for the January-March period, down from 3.25 percent during the same period 2011 and less than one-tenth of the unit sales posted by Chinese appliance maker Haier .
For total washing machine sales, Samsung's market share was 1.84 percent for the first three months of the year compared to 2.77 percent for January-March 2011 and 29 percent for Haier.
Liu Buchen, a corporate management consultant in Zhengzhou, said Samsung's China division feeds off the company's comprehensive manufacturing chain and innovative products. Piao Genxi, the division's former president, in 2005 announced ground-breaking decisions to expand into financial and service sectors, including product research and development.
This strategy is unlike those adopted by other multinationals in China, such as Microsoft and General Electric , which run research and development operations for Asian clients outside China. Microsoft's software development business, for example, is in India.
However, Liu said, Samsung (China) has stumbled of late by taking a marketing path that focuses on big cities. It's thus let Chinese rivals move in and dominate markets for home appliances in the country's small cities and rural areas.
Another shortcoming at Samsung, say analysts, is the company's reluctance to hire Chinese executives for senior positions at company headquarters.
Zhang Yuanji, president of Samsung Group Greater China, which includes Samsung (China), said gradually more authority is being transferred to senior Chinese staffers from headquarters.
About 70 percent of the top executives at the Chinese division are native Chinese, up from 20 percent just two years ago, said Zhang, including Wang Tong, president of Samsung Telecommunications Research Institute of China.
But these executive policy adjustments have come too late for Tan as well as Qu Jingdong, who worked as a marketing vice president at Samsung's electronics division in China between 2007 and 2009. Tan has been gone since 1998.
Qu said he chose to work at Samsung "because its overall development trend attracted me." But Qu and Tan said they felt their Samsung careers stagnated after a few years, so they quit.