CHINESE consumer electronic companies such as TCL are preparing to take on the big Korean and Japanese companies in Australia in a concerted push for rapid growth.
TCL has been building its corporate brand and expanding its distribution channels here for years, as it tries to extend its reach beyond its home market, in which it is the market leader.
"Chinese brands will be able to challenge the Japanese market position in five years," the general manager of TCL Australia, Sunny Xiang, said, "but the leadership position of Korean companies is unassailable in the short term."
Asian electronic consumer companies dominate the Australian market. Korean and Japanese brands such as Samsung, LG, Sony and Panasonic control more than 70 per cent of the television market. The rest is divided between Chinese and local generic brands.
Korean and new Chinese players such as TCL and Hisense are steadily cannibalising the market share of Japanese companies' brands, whose profits have been savaged.
In the past fiscal year Sony, Sharp and Panasonic, three of the most successful Japanese electronic companies, suffered a combined loss of $20 billion, in a sharp contrast to the heydays of the 1970s and '80s when Japan dominated the world's consumer electronics market.
"Our students [referring to Korean, Taiwanese and Chinese companies] have overtaken their teacher," a Japanese business executive working in Australia said.
Competition for market share is intense nonetheless. Mr Xiang said TCL was engaged in a "close-quarter bayonet fight" with other Asian brands. Despite Japanese companies being in decline, they are still highly competitive in core technologies.
TCL has invested heavily in research and marketing to catch up with its Korean and Japanese rivals. It has spent $3.8 billion on a state-of-the-art display panel factory in China, and has opened R&D centres in the US, France and Singapore.
The international design company IDEO is helping TCL to improve its products' look. TCL is also trying to raise its profile by sponsoring big sporting events. It has supplied TV sets for the Melbourne Cup since 2005.
Frequently Asked Questions about this Article…
Why are Chinese consumer electronics companies like TCL pushing to grow in Australia?
Chinese consumer electronics firms such as TCL are building their corporate brands and expanding distribution channels in Australia to extend their reach beyond the domestic market and pursue rapid growth.
How much of the Australian television market is controlled by Asian brands such as Samsung, LG, Sony and Panasonic?
Asian electronic consumer companies dominate the Australian TV market: Korean and Japanese brands including Samsung, LG, Sony and Panasonic control more than 70% of the television market.
Are Chinese players such as TCL and Hisense taking market share from Japanese electronics brands?
Yes — the article says Korean and new Chinese players like TCL and Hisense are steadily cannibalising the market share of Japanese companies, whose profits have been heavily hit.
What recent financial results have affected major Japanese electronics companies?
In the past fiscal year Sony, Sharp and Panasonic — three leading Japanese electronics firms — suffered a combined loss of US$20 billion, highlighting significant profit pressure.
How do Chinese brands compare to Korean companies in terms of competitive position?
According to TCL Australia general manager Sunny Xiang, Chinese brands could challenge the Japanese market position within five years, but the leadership position of Korean companies remains effectively unassailable in the short term.
What investments has TCL made to catch up with Korean and Japanese rivals?
TCL has invested heavily in research and marketing, including a US$3.8 billion state-of-the-art display panel factory in China and R&D centres in the US, France and Singapore to improve technology and product competitiveness.
How is TCL working to improve product design and consumer perception in Australia?
TCL is collaborating with international design firm IDEO to improve product aesthetics and has raised its profile by sponsoring major sporting events, supplying TV sets for the Melbourne Cup since 2005.
What does intensified competition among Asian electronics brands mean for everyday investors watching the consumer electronics sector?
The article highlights intense competition and shifting market share: established Korean and Japanese brands still dominate, Chinese firms are aggressively expanding through R&D and marketing, and Japanese companies have faced steep losses — all factors that can influence company performance and sector dynamics investors may want to monitor.
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