TCL: Supporting the backbone of China's economy by revitalizing industry

　　"Mountains are steep because of their backbones, people are strong because of their perseverance, and state-owned enterprises prosper because of their real industries." In the past five years, Li Dongsheng, chairman of TCL Group, has led TCL to stick to real industries and innovation, and has achieved fruitful results. Let's follow the mobile phone portable editor to learn about the relevant content.

　　In 2012, TCL became the first Chinese TV company to achieve annual sales of more than 15 million TV sets , ranking third in the global color TV market.

　　In 2014, TCL Group's revenue exceeded 100 billion yuan, breaking the situation where the 100 billion yuan home appliance industry in China was dominated by white goods companies.

　　In 2016, TCL's CSOT 8.5-generation LCD panel production line became the world's largest and most efficient 8.5-generation production line, contributing half of TCL Group's profits. At the same time, TCL's global color TV sales exceeded 20 million units, and TCL TV ranked third in the North American market...

　　"Industry is the backbone of China's economy. After 34 years of industry, we have felt the achievements and experienced difficulties, but we have not changed our original intention and have moved forward despite the difficulties. I hope that in the future more companies will join us in supporting the backbone of China's economy." In 2015, Li Dongsheng began to appeal to the society to use industry to support the backbone of China's economy, and to increase the efforts to put it into practice.

　　Internet transformation reshapes old brands

　　In the past five years, the color TV industry has undergone tremendous changes. The profit model of relying solely on hardware sales has gradually disappeared. Intelligentization, Internetization, and service-oriented services with user service as the core have become the new theme of the color TV industry. Internet companies have sensed the opportunities in this change and have flooded into the color TV market in large numbers, stirring up the calm of the market. In 2014, China's color TV sales fell year-on-year for the first time in nearly 30 years.

　　The hustle and bustle of the Internet, the expansion of real estate, and the slowdown in the growth of the real economy have made many people in the manufacturing industry retreat. However, Li Dongsheng led TCL to stay firm in the real industry and meet the challenges. He said: "In the face of such changes, companies must have the right strategy to adapt to changes and transform and upgrade; they must also have firm beliefs and a fighting spirit."

　　The eagle soars high in the sky, and only the fittest survive. The Internet brings not only shocks to manufacturing companies, but also new opportunities. Only by embracing change can we better cope with challenges and welcome opportunities. When the crisis was still in its infancy, TCL had already begun to try to change. In 2012, it cooperated with Tencent to launch smart TVs.

　　After repeated discussions, TCL finally proposed an Internet transformation strategy that suits itself - the "Dual +" ("Intelligence + Internet", "Product + Service") strategy. According to the new strategy, TCL adjusted its industrial structure into seven product business areas, three service business areas, and venture capital and investment businesses, forming 11 business sectors.

　　Under the guidance of the "Double +" strategy, TCL has continuously improved product quality and enriched its product line, while paying more attention to integrating Internet factors and improving service quality. In recent years, TCL has launched products such as TV+ curved screen and quantum dots to form its own characteristics. At the same time, it has started from three aspects to improve its service capabilities in all aspects: first, reorganizing the financial services business headquarters into a financial holding group; second, solidifying the Internet application and service business headquarters; third, establishing O2O and Hanlinhui to promote the integration of online and offline and enhance competitiveness.

　　High-quality products and thoughtful services are important, but a new brand is needed to win users in the market. Creating a "young, fashionable, and international" brand image is a major manifestation of TCL's catering to the younger and more international consumer groups. As the post-90s generation gradually becomes the main consumer group in the Chinese market, product design and brand style must cater to the needs of different groups. Therefore, TCL has successively launched the high-end sub-brand XESS Chuangyi and the new Internet brand Thunderbird, and has joined forces with Ellen Show, NBA, and Rose Bowl Stadium. It has also become the first Chinese company in the history of the Hollywood Theater to be named, allowing the world to recognize Chinese brands.

　　In addition, TCL has also accelerated its layout of white goods. Li Dongsheng once proposed the "3553 Plan" for TCL white goods, that is, TCL white goods plan to reach the fifth place in the industry in three years and the third place in five years. In order to achieve this goal, TCL has continuously expanded its production capacity and launched the TCL Home Appliances (Hefei) Industrial Park. At the same time, it has actively invested in research and development, with a cumulative investment of 300 million yuan in the past three years, which has effectively improved the competitiveness of its products.

　　TCL's reforms have yielded remarkable results. Since 2014, TCL Group has achieved revenues of more than 100 billion yuan for three consecutive years, making it the highest-ranked home appliance and consumer electronics company on the Top 100 Electronics list.

　　Further alleviate the pain of "lack of chips and screens"

　　LCD panels account for 70% of the cost of a color TV set. Chips are also critical to improving product quality and market competitiveness. If TCL wants to further control the downstream market, it must lay out the upstream display and chip industries.

　　As a passionate whole machine entrepreneur, Li Dongsheng has always had the dream of controlling the upstream display industry. At present, TCL has invested 66 billion yuan in the display industry, built two 8.5-generation LCD panel production lines in Shenzhen, and built a 6-generation LTPS backplane LCD/AMOLED panel production line in Wuhan. Li Dongsheng said that the two 8.5-generation lines in Shenzhen are of milestone significance for TCL to build the world's most technologically advanced and largest TV panel R&D and production base. The 6th-generation flexible LTPS-AMOLED production line project in Wuhan with an additional investment of 35 billion yuan has further impacted the monopoly of foreign companies such as South Korea in the high-end AMOLED market.

　　Now that the LCD panel industry is shifting to mainland China, TCL has taken advantage of the success and invested in the construction of the world's highest generation 11 LCD panel production line, with an investment of 46.5 billion yuan. In the field of semiconductor display industry, my country has gradually changed from a follower to a leader. According to CCTV, after the completion of the G11 project, the world's largest LCD flat panel display project, it can achieve full data, automation and intelligent management, becoming a benchmark for China's intelligent manufacturing.

　　TCL's ambition in the panel field does not stop there. Li Dongsheng said: "If we want to transform from a long-term follower to a leader in the development of new global display technologies and industries, we must grasp the core technologies for the development of the printed display industry, implement an independent intellectual property strategy, and make breakthroughs in key and common technologies of display industry materials and devices."

　　In 2016, Guangdong Juhua Printing Display Technology Co., Ltd. (co-invested by TCL's Huaxing Optoelectronics Co., Ltd. and Tianma Microelectronics Co., Ltd.) signed a strategic cooperation agreement with DuPont, Sumitomo Chemical, Nissan Chemical and Cody. The latter will support Juhua's material and process needs in the development of printed OLED technology, tailor-make relevant R&D equipment for Juhua, and established the "Guangdong Printing and Flexible Display Innovation Center" this year. Zhu Changchang, a senior consultant of TCL Research Institute, pointed out that China's printed OLED started early and is basically at the same starting line as the international market. Printed OLED is an important opportunity for my country to overtake on the curve.

　　TCL, which has always taken Samsung as its benchmark, is actively developing chips while strengthening its display business. Li Dongsheng said that Samsung's investment in upstream fields such as LCD panels and semiconductors has achieved good vertical integration effects. In addition to investing in Huaxing Optoelectronics and getting involved in LCD panels, TCL Group also holds shares in chip design companies. One is Dontech Technology, which makes LCD display driver chips and was listed in Taiwan in November 2013; the other is Amlogic Semiconductor, which focuses on the design of smart chips for smart TVs and set-top boxes.

　　In 2016, TCL and Tsinghua Unigroup jointly established an industrial merger and acquisition fund, also extending its R&D capabilities to the chip field.

　　Internationalization has achieved phased results

　　Through the "Dual +" strategic transformation, TCL has formed a vertical ecological chain of chips, panels, modules, products, services, and brands. Looking at the world, the other part of TCL's dual-wheel drive development strategy is internationalization.

　　Internationalization is very important for Chinese enterprises. The domestic markets for color TV, mobile phones, and white appliances are becoming saturated and growth is slowing down, while many overseas markets are just starting. Conquering overseas markets will enhance the risk resistance of enterprises. TCL started internationalization while carrying out the "double +" strategic transformation in China. At the end of 2014, it adjusted its overseas business structure, merged the color TV and mobile phone businesses in Europe, and formulated an internationalization strategy of "three forces linkage, brand leadership, and rooting in key market countries" in 2015.

　　After two or three years of development, the position of overseas business in TCL Group has become more prominent, and its revenue has accounted for nearly 50% of the total operating income. Li Dongsheng said: "As a Chinese company, we must first continuously consolidate our position in the domestic market, and then form characteristics and advantages in overseas markets. Now TCL has become the three major advantageous markets in the United States, Europe and Latin America. In the future, we will continue to work hard in the Asia-Pacific market, the Middle East market and the African market to further develop our overseas business."

　　TCL is now enjoying a good harvest in Europe, America and Asia Pacific. According to IHS data, TCL ranked third in the U.S. in terms of TV shipments in the first half of 2017. In the European market, after more than a decade of development, TCL TVs have been sold in more than 20 countries, with the market share ranking third in France and growing steadily in Germany, Italy, Poland and other places. In the Asia Pacific market, TCL also performed well, ranking among the top five in the market share in the Philippines, Thailand, Vietnam, Australia and other places.

　　Among them, TCL's interim achievements in the US market are worth learning from for Chinese companies. In 2010, TCL, which accelerated its internationalization layout, entered the North American market with its own brand. From being unknown at the beginning, it developed to sales of nearly 2 million units and a market share of 5% in 2016. In recent years, TCL has accelerated its layout in the North American market, with steady improvements in products, channels and markets. In 2015, sales exceeded 1 million units, and sales doubled in 2016. The North American market has accounted for 35% of TCL's overseas sales.

　　Li Dongsheng believes that if TCL wants to surpass Samsung in the US market, it must first break through the smart and Internet applications and differentiate itself. TCL does not use the Android system like Samsung, but uses Roku's operating system, which is a differentiated selling point. Secondly, it must strengthen its brand. Samsung has been working in the US for many years and has a strong brand influence. If TCL wants to further expand in the US, it also needs to establish brand advantages.

　　Over the years, Chinese manufacturing companies have been moving towards "internationalization" and "Made in China", forming different transformation methods. TCL's future path has been answered - with the "Double +" strategy as the dual-wheel drive and the internationalization strategy as the acceleration engine, it will move forward at full speed towards the goal of "a global smart product manufacturing and Internet application service enterprise group".

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