By Claire Reilly
This Christmas, Australian consumers will begin to see new types of televisions on retail shelves as manufacturers turn up their focus on ultra-definition displays and large screen sizes in order to bring a bit of profit back to the category.
With these new products, retailers will have to change the way they think about selling televisions to Australian consumers.
But it’s not just consumer perception and retail demonstration that is changing. The big brands are developing new manufacturing methods, and one brand in particular is starting to reposition itself amongst its competitors with the hopes of changing its perception amongst consumers.
Current.com.au spoke to the global chief sales officer of TCL Multimedia Technologies, E Hao, about what one of the biggest names in Chinese manufacturing is starting to do differently.
Here’s Part One of our special feature interview.
Current.com.au: Where does TCL currently sit within the marketplace?
E Hao: We have become the number one TV manufacturer in China. Last year we became the first manufacturer in China to reach 10 million LCD TV sets. And this year we are also facing significant growth, while the whole market is tumbling. But we maintain growth. This year our forecast is to manufacture 15 million LCD sets – so that’s 50 per cent more than last year. That’s exciting, but not easy – the whole industry is not easy.
In the TV industry you need to have a clear competitiveness or a clear position. Right now, as of the first half of the financial year, we are number five in terms of global market share, after Samsung, LG, Sony and Toshiba. We have 5.6 per cent market share globally, and number four, Toshiba, is at 6.1 per cent. So we are working on it!
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C: What would you say is the central issue in TV manufacturing at the moment?
EH: Right now the market is changing – the whole way of working and the whole value chain is changing. Vertical integration is the key word.
You can see all the leaders – Samsung, Sony, LG, Toshiba – are vertically integrated. So by vertical integration I mean you not only do the assembling, but you also need to have the key components for the panel. And Samsung, Sony and LG, they own the panel factories, and that is one of the key reasons they are the leaders, because the panel takes up about 60 per cent of the product in a modern television.
C: What is TCL doing to stay ahead of the curve?
EH: TCL has invested $3 billion US in 8.5 generation panels in China. 8.5 is the technical term for the generation of LCD manufacturing, and it’s one of the most advanced in the world. We are the only TV manufacturer from China to have a panel factory. There are several companies that have panel factories but they only do the components, whereas we do components as well as the full product. To become the leader in the industry, this is the infrastructure that you need to survive.
The factory started running at the end of last year, but it will reach full capacity at the end of this year. So when we reach the end of this year, the capacity of the factory will be more than 14 million panels that will be cut.
Tomorrow: The making of a flat panel and inside TCL's newest factory.