Chinese consumer durables manufacturer TCL is revamping its strategy for India. The company has put its manufacturing plans on the backburner and plans to focus on key areas such as marketing and distribution.
Earlier, the company was considering firming up its manufacturing facility in the country, but the plans have been shelved for now, company executives said. The low sales volume in India (0.5 million units per annum) has deterred the management from revamping the facility, executives added.
TCL manufactures 24 million colour television sets globally and TCL India has a mere 2 per cent market share of the 10.3 million units colour television industry. However, the company has successfully made inroads in other SAARC countries such as Sri Lanka, Bangladesh, Nepal and Pakistan and grabbed between 30 and 50 per cent of the market.
Michael Qi, head-marketing, TCL India, said, "India is a vast country, where different regions are quite distinct from each other and being a late entrant, we have more challenges ahead of us."
Nevertheless, he is confident of making a mark on Indian shores. Qi said, "India is one of the most accepting market in the world. LG has made quick inroads into the markets and is ranked number-one brand, which is not the case in most countries in the Americas, Europe or even south-east Asia. Fifteen years ago, BPL was the number-one brand. In 2000, Samsung took over and for the last five years, LG has taken the lead."
TCL, he said, is currently adjusting its strategy to meet consumer and dealer requirements. "We are looking at capturing a 5 per cent market share by this year," he said. Warren Wang, the recently appointed managing director of TCL India, said, "India is where the Chinese market was 7-8 years ago. After China, India is the most important market for us."
To focus better on the Indian market, TCL India has created 10 new senior management posts to guide the company on cost, quality control, operations and manufacturing efficiency (supply chain management and procurement) among other areas.
The company also plans to spend around Rs 26 crore (Rs 260 million) on their marketing and advertising efforts this year. The spends, however, will focus on print advertising; Samsung and LG advertisements are predominantly on television. TCL plans to also focus on below the line activities such as trade exhibitions to establish a strong connection with the trade.
Qi said there is a definite opportunity at the moment. "Although some of the brands have gained strength over time, the situation can change as dealers receive thin margins and are dissatisfied with arrogant service. If we offer the same quality with better margins, step by step, we can bring our brand to the fore," he said.
Currently, TCL has 21 branches, 5,000 dealers and 120 after-sales service centres. On the other hand, Samsung has 95 branches, 8,500 dealers and 260 after-sales service centres.