TCL moves faster to expand worldwide
Company's revenue from overseas markets stood at $18.47 billion in 2021, up 60 percent on a yearly basis
Chinese consumer electronics giant TCL Technology Group Corp is accelerating steps to strengthen its capacity in global operations, establish complete industrial chains across the globe and increase investment in research and development to expand its footprint in emerging markets.
Building global competitiveness has always been an important strategy for TCL, said Li Dongsheng, founder and chairman of the company, adding it has adjusted the layout of overseas industrial chains, ramped up localization efforts and continuously increased capital input in R&D.
In recent years, TCL has expanded overseas factories covering televisions, modules and photovoltaic cells production in Vietnam, Malaysia, Mexico and India. It established ventures with local partners in Brazil to jointly build production bases, supply chains and an R&D system.
"Looking ahead, we will actively consider increasing industrial bases in Africa and strengthening our business in the Middle East," Li said. So far, TCL has set up 42 R&D centers and 32 manufacturing bases around the world, with operations in over 160 countries and regions.
The company's revenue from overseas markets stood at 117.4 billion yuan ($18.43 billion) in 2021, up 60 percent on a yearly basis.
"We adopt different strategies for different countries and regions. For instance, we need to develop new products that are suitable for local demand through technological innovation in the United States, Japan and some other developed countries, while in developing countries, we are making efforts to build industrial and supply chains so as to expand our business," Li said.
Chinese enterprises should speed up the construction of global industrial and supply chains, which is of great significance in improving their competitiveness, he said, while emphasizing they should also make breakthroughs in core technologies in key fields, such as integrated circuits, precision materials and high-end equipment.
Noting that China has maintained its position as the world's largest manufacturing country, he said the country's manufacturing sector should transition from exporting products to exporting industrial capacity, driving the export of domestic materials, components and equipment. He gave the observation against the backdrop of the current global economic pattern and changes in investment and trade rules.
"We should accelerate layout in global industrial chains, break down trade barriers as well as build and improve our operations system in the global market," he said, adding international business has already become the biggest growth engine for TCL.
He said the company has set up a factory in Mexico and did not rule out the possibility of building plants in the US. "For Europe, we have established a factory in Poland, which is a member country of the European Union, so there is no tariff barrier and the factory can support our sales in the EU," he said.
Industry experts said establishing overseas branches or production bases will not only bring China's advanced manufacturing, R&D, and management capabilities to overseas markets but also create job opportunities for locals, boost brand awareness and enhance the competitiveness of Chinese enterprises in the global market.
Revenue of China's home appliance sector reached 760.3 billion yuan in 2021, up 3.6 percent year-on-year, but saw a drop of 7.4 percent compared with its 2019 performance, said All View Cloud or AVC, a Beijing-based consultancy specializing in the home appliance sector.
Given that growth in the domestic home appliance business is slowing, Jie Meijuan, general manager of the consumer electronics big data department of AVC, said it is an irresistible trend that appliance makers are stepping up their operations in the global market to improve competitiveness and foster a new growth engine for their longer-term development.
Jie said brand awareness of Chinese home appliance products is on the rise, and the global industrial layout of household appliance companies has been improved, providing strong support for their globalization efforts.
Globalization is both an opportunity and a challenge for Chinese home appliance manufacturers. It will further promote the high-quality transformation and upgrade of China's manufacturing sector, she added.
"Building a sound global industrial chain and enhancing global operational capacity will help Chinese home appliance companies utilize global resources, reduce costs and improve management efficiency," she said, adding establishment of a global R&D center will be conducive for Chinese enterprises to gain innovation advantages, master new technologies and obtain a greater voice in the industry.
Dong Min, deputy secretary-general of the China Video Industry Association, said the traditional TV market is almost saturated and companies need to seek new growth points.
"Expansion into overseas markets will not only relieve the pressure of high inventories in the domestic market but also increase the international influence of Chinese home appliance companies," Dong said.
Founded in 1981 in Huizhou, Guangdong province, TCL now mainly focuses on intelligent terminals, semiconductor displays, semiconductor photovoltaics and semiconductor materials.
It specializes in the research, development and manufacturing of consumer electronics products, including smart screens, air conditioners, smart mobile and connected devices, refrigerators, washing machines and intelligent voice products.
Zhang Qizi, deputy director of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, said Chinese enterprises should step up efforts for breakthroughs in key technologies through self-dependent innovation and promote the integration of the new generation of information technologies and intelligent manufacturing with the current industrial supply chain.