China's TCL expanding into MENA

DUBAI — The TCL Corporation, one of the leading Chinese consumer electronics manufacturers, is partnering with 10 local companies across the MENA region to boost its regional presence.

By Lucia Dore (Senior Correspondent)

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Published: Sun 4 Jun 2006, 10:33 AM

Last updated: Sat 4 Apr 2015, 3:21 PM

The company, established in 1981, aims to obtain more than 15 per cent market share in the region within three years, commented president of TTE Corporation, Dr.Yi.

TTE was set up jointly by TCL and Thomson, in July 2004 in Shenzhen, China, and is the world's largest supplier of televisions, with more than 23 million sold. TCL and TTE also manufacture all types of white goods, small appliances, IT products, and mobile phones, among others. Since TCL merged with the Alcatel mobile business, TCL is ranked as one of the world's top 10 mobile phone producers. In 2005, the company reported revenues of $7 billion with brand equity of $3.81 billion.

Although TCL might be a relatively unknown brand in the MENA region, Yi believes the 15 per cent target is realistic and realisable for a number of reasons. First, it has reached a 15 per cent market penetration in about 25 countries in a relatively short time after building up brand recognition. Another is its emphasis on research and development and the quality it brings to product development.

Yi said the quality of products had been well recognised for sometime. Annually, TCL manufactures more than 3 million TVs for Philips in the US and several hundred thousand televisions for Panasonic in China. It has also manufactured more than 4 million TVs for the RCA brand, which is sold in the US and more than 3 million televisions for the Thomson brand in Europe.

With such a large sales volume, Yi said TCL can leverage the advantages from achieving economies of scale, which can be translated into more competitive prices. "The cost of materials will be lower than competitor companies to a remarkable extent," he said. Moreover, by forming strategic partnerships with some key suppliers such as Toshiba, Intel, and Philips TCL will be able to obtain the key components at a very competitive price.

Yi also emphasised the importance of establishing good relationships with local partners. "Local partners strength and support is also very crucial for both TCL and its partners to succeed in the MENA region," he said. With these components, he said: "We are very confident to achieve our top two market position within three years from now."

TCL's entry into the Middle East market is a sign of the on-going strength of Sino-Arab trade relations, said director general of the Department of Foreign Trade and Economic Co-operation of China Guangdong Province, Liang Yaowen. "TCL's entry into the Middle East would showcase the emergence of China as a reputed manufacturer of high quality consumer electronics," he said. Trade with the Middle East was more than $10.78 billion in 2005.



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