Investment

TCL sets its sights overseas

By Bao Chang (China Daily)
Updated: 2010-10-19 07:54

A man walks past a TCL booth at an exhibition in Beijing. Nan Shan / for China Daily

WUHAN - TCL Corporation, one of China's largest household appliance makers, plans to establish production bases in Russia, Pakistan and South America to widen its reach abroad as it sees significant benefits in overseas markets.

"We should invest more in international markets, from which we expect to reap a good return as TCL grows into a global brand," Li Dongsheng, chairman of TCL Corporation, told China Daily.

The Shenzhen and Hong Kong-listed company, which has more than 300 sales agencies in 40 countries and regions, now has 20 overseas production bases including plants in Mexico, Thailand and Vietnam.

For the first half of this year, TCL's sales volume in overseas markets reached 9.55 billion yuan ($1.46 billion), an increase of 49.97 percent compared with the same period last year and accounting for 41 percent of the company's total revenue.

TCL mainly sells TV sets and mobile phones in overseas markets.

"Localized production is beneficial for our cost saving both on transportation and manpower," said Liang Qichun, general manager of TCL Corporation.

"Apart from production localization, more comprehensive cooperation with our distributors abroad is essential to our international expansion," said Li, adding that the company will also invest more to improve brand awareness, which is still considered to be weaker than some famous South Korean and Japanese brands in overseas markets.

Next year, TCL and Eros Group, the company's distributor in the Middle East market, will spend $500,000 on advertising TCL products in the Middle East. The distributor, based in the United Arab Emirates (UAE), predicted that TCL will control 10 percent of the UAE's electronic appliance market in 2011, up from the current 3 percent.

"One of our priorities is to help TCL improve its brand image in the markets we are covering," said Niranjan Gidwani, deputy chief executive officer of Eros Group, one of the three largest electronic appliance distribution groups in the Gulf region.

Gidwani added that it is time for Chinese brands to become global and not just manufacture products for other brands as before.

Eros aims to develop TCL into a brand catering to middle-class consumers, who are looking for good quality products with slightly lower prices.

"TCL is a company that is committed to global expansion," said Enrique Jurkowski, vice-president of Radio Victoria Fueguina SA, TCL's sole distributor in Argentina.

Jurkowski expected that the sales volume of TCL products will be $100 million by the end of this year, double last year's revenues.

TCL now accounts for 10 percent of the Argentine market, ranking fifth in it.

Both Eros and Radio Victoria Fueguina will introduce TCL mobile phones launched this year to their local markets in mid-2011.

"To be more attractive in the international market, Chinese brands still need about 15 years to develop their intangible assets, including the establishment of a high-grade brand image on which many famous foreign brands spend several decades," said Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

Mei added that, in terms of technology, Chinese brands now equal their foreign counterparts.

China Daily