TCL sees better sales prospects in Asia
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TCL Corporation, one of China's largest household appliance makers, expects to strengthen its international presence in Asian emerging markets, a region it sees significant sales growth, through the sponsorship of the 16th Asian Games in Guangzhou.
"Asian countries are our key markets when we expand abroad. The Asian Games is an opportunity to enlarge our influence and support our business partners," Li Dongsheng, chairman of TCL Corporation, said.
The Shenzhen-based company signed an agreement with the Olympic Council of Asia and became a sponsor of Guangzhou Asian Games on Nov 12, 2008.
"TCL has spent more than 300 million yuan ($5.17 million) on the publicity and promotional events including a TCL theme park, a caravan exhibition and the Asian Games Feast since 2008," Liang Qichun, general manager of Brand Management Center of TCL, told China Daily.
"The sponsorship of Asian Games also demonstrated the transfer of our strategy from promoting the brand to increasing the popularity of TCL brand among the consumer," Liang said.
Over the past five years, TCL sponsored several golf and tennis tournaments in China, in a bid to develop its brand into a premium class.
Liang said that entering the second- and third-tier cities in China is their next step for business expansion. Aside from brand building, he said such a move is essential for a consumer electronics company, as it is important to interact with consumers.
For the first nine months of this year, TCL's sales volume in overseas markets reached 14.25 billion yuan, an increase of 40.32 percent year-on-year, accounting for 40 percent of the company's total revenues.
"Good returns in emerging markets made a great contribution to the robust growth of our overseas business," Liang said.
Early this month, TCL announced a $30 million investment plan aimed at securing more market share in India's consumer electronics sector. TCL plans to introduce Internet TV to Vietnam by next year.
Apart from the Asian Games, TCL also plans to sponsor the Olympic Games, if there's an opportunity in the future.
"The Olympic is no doubt a golden opportunity to promote ourselves to the world, which will eventually lead to brand awareness in mature markets such as the US and Europe.
"Our priority in these markets is to improve our strength as I don't believe one-time advertising could bring substantial changes," Liang said.
TCL's business development is still at its infancy and is mainly based on partnerships with local brands.
Liang said business in the European and US markets is indeed their biggest challenge due to tough competition with well-known brands in these markets.
In addition, TCL said on Tuesday that the liquidator of TCL-Thomson Electronics (TTE) is suing the company in the Commercial Court of Nanterre in France, claiming a payment of HK$780 million ($100.61 million) because of an alleged misappropriation during the insolvency of TTE
TTE is a 67:33 joint venture between TCL and European TV manufacture Thomson. TTE filed for bankruptcy in May 2007 due to substantial losses.
TCL said the process and events leading to the insolvency of TTE Europe have been operated in compliance with French laws on advice of experienced local counsels. The group will pursue a strong defense to the alleged claims under the writ.
