It was the Chinese invasion that never happened. Eighteen months ago Indian manufacturers were gripped by worries about how they would push back the price warriors of the Middle Kingdom.

In the event, they needn't have feared. Indian consumers decided Chinese products were low-tech, unreliable and not worth it -- even at rock-bottom prices.

But Chinese white goods giant Haier is hoping it can shake off the nation's dismal reputation among Indian buyers. Come the festive season, Haier -- the world's fifth-largest white goods company -- plans to showcase its technological prowess, selling its products through over 1,000 dealers across the country.

It's coming out, no-holds-barred, with a huge array of goods from refrigerators, televisions, washing machines, microwaves, air-conditioners, cloth dryers and even dishwashers.

Haier is determined to avoid making the mistake, which its Chinese rivals like TCL or Konka made in the Indian market by positioning themselves as price cutters.

Instead, it's targeting the premium segment of each market, taking on rivals like Korean chaebols Samsung and LG and even Sony in battle.

"We won't make the mistakes other Chinese manufacturers have. Our positioning is premium and in the next two years our aim will be to invest and build Haier as a reliable, high-tech brand," says T K Banerjee, president, Haier Appliances, the fully owned Indian subsidiary.

Still, the company is making a cautious debut and it's not in a tearing hurry to ramp up volumes. It will initially launch its products in the north. Then it hopes to move west after six months. Once these two markets have settled it will launch across the country.

For starters, it has also fixed itself modest targets. In the first two years Haier hopes to grab some 5 per cent of each market it enters. Only after the brand is well established in consumers' minds will it attempt to boost volumes.

But make no mistake. In the long run it has giant ambitions: it aims to be among the top three white goods companies in seven years. By then, it is hoping for a $1 billion turnover.

For the time being, though, its ambitions are more limited. That's reflected in the fact that it isn't planning any investments in manufacturing for the next 24 months.

And it has taken permission from the government to initially invest only $6 million, which will be used to build its marketing, service and distribution system.

Instead, the company is talking to BPL (for televisions), Godrej (refrigerators) and Voltas (ACs) to manufacture products according to its specifications.

Banerjee notes that large surplus capacities -- in the refrigerator industry, for instance, only 60 per cent to 65 per cent of the installed capacity is being used -- are available and it doesn't make economic sense to start manufacturing until volumes grow.

But how does Haier -- which made an abortive attempt a few years ago to enter the Indian market through a joint venture with Hotline -- plan to penetrate an already overcrowded market?

Consolidation has already taken place in the white goods market and the top three-to-four companies dominate each segment, leaving little scope for newcomers to muscle in.

Says one white goods manufacturer: "One of these guys has to make a fatal mistake for Haier even to get a look-in."

For instance, in colour televisions, the top four brands command over 50 per cent of the market; the Korean chaebols have grabbed about 60 per cent of the market while in refrigerators Whirlpool, Godrej, LG and Samsung have wrapped up over 75 per cent. So is Haier too late?

Banerjee thinks not. Haier hopes to break into the market with a multi-pronged strategy, which includes innovative products, sustained brand building and, most importantly, extremely high levels of customer care.

For a start, it is planning to import a slew of new, hi-tech products. It expects at least 30 per cent of its products to be imported directly from China, which will feature the company's strong technological edge.

For instance, in refrigerators -- which will be its main focus in the initial years -- Haier is introducing a model in which the freezer is mounted European-style at the bottom, instead of the top, as in most models sold here now.

The reason: people only use the freezer three times a day compared to the dozen-odd times they open the main compartment. So, now they don't have to bend to pick up things.

That's not all. Haier is also introducing a washing machine with a gear in the tumbler that will halve the use of water and detergent. Also on offer will be a mini-personalised washing machine weighing only 2.3 kg.

But all this will come at a price. The Chinese giant expects its prices to be around 2 per cent higher than other competitors in the same segments.

Banerjee  gives an example of Haier pricing. He reckons that if a Sony costs Rs 100 in China, Haier is selling at Rs 98. That, he says, is either slightly higher or in the same price range as LG and Samsung.

Secondly, the Chinese giant is focusing on building a strong after-sales service organisation -- even before it sets up a sales team. For instance, in the northern market, it plans to set up over 40 service centres.

The internal target in bigger cities is to deal with a complaint within eight hours and fix products in 24 hours.

Third, unlike some of its rivals, Haier wants to bring in its entire range of models in each segment in one go instead of rolling them out in phases.

So, colour TV customers will be offered some 10 models ranging from 14 inches to as high as 39 inches.

Similarly, in refrigerators, the gameplan is to bombard Indian customers with an array of over 16 models ranging from 60 litres to as high as 690 litres.

But will the Haier gamble work? Rivals predict disaster.

Says the managing director of one top white goods company: "The market has already seen consolidation and the top four companies have put in large investments in brands and manufacturing.

"So Haier has no special advantage. Price-wise we have large volumes and production facilities to challenge them.

"In case of a price war, their products are no great shakes and hoping that by getting a 5 per cent share you'll get large brand recall or run a viable business is plain wishful thinking."

Adds a senior executive of a consumer electronics giant: "It takes at least Rs 100 crore (Rs 1 billion) of investment in the next three to five years to build a new brand. That's what the Koreans did.

"Haier isn't ready to put in that kind of money. It's just a short-term trader. Plus, they face the problem of being a Chinese brand and being seen as unreliable and low-tech."

Banerjee is, of course, well aware that he faces a tough task. That's why he plans to spend 5 per cent to 10 per cent of his total budget on advertising and marketing the Haier name and aims to position the brand as a global leader.

And significantly, he plans to win over dealers by offering better margins than competitors. He reckons that he'll be able to bring dealers to his side by offering 2 per cent more than his rivals.