In recent years, in the face of the increasing saturation of the domestic market, Chinese enterprises have accelerated the pace of internationalization and sought a broader space for development. Li Dongsheng, founder and chairman of TCL, has always adhered to the belief of "if you don't go to sea, you will be out", and led TCL to continue to seek global development. In the past month, Li Dongsheng has personally visited United States, Brazil, Argentina, France, Germany and other continental countries, and personally conducted in-depth exchanges and interactions with local partners, valued customers, end users and hard-working employees.
At the end of July, his trip was fixed in Viet Nam, a land of great significance to TCL, because it was the "cradle" where TCL's globalization journey officially set sail in 1999. On July 30, in this land full of memories and hopes, TCL held a grand celebration of the 25th anniversary of globalization, looking back on the past glory and looking forward to the future blueprint.
Li Dongsheng, founder and chairman of TCL
The reporter of "Daily Economic News" learned that at present, TCL has 3 factories in Viet Nam, and Viet Nam is TCL's second largest overseas manufacturing base. On the morning of July 30, Li Dongsheng was interviewed by domestic and foreign media including the National Business Daily in Viet Nam. He told reporters that Viet Nam is a fast-growing market. TCL Viet Nam Branch mainly undertakes two major functions: operating the ASEAN market including Viet Nam; As part of TCL's global supply chain, it manufactures products for export to North America.
Since the unilateral increase of taxes on Chinese products by the United States in United States, TCL has gradually transferred its products to Mexico and Viet Nam. Regarding Chinese enterprises going overseas, Li Dongsheng said: "Whether in Viet Nam or other countries, in order to run the local business well, the business strategy and concept of the enterprise must first take root in the local area. According to Li Dongsheng, TCL's overseas industrial layout will change in the future, and increase the export of To B products.
Going to sea can't just be a "screwing" factory
As China's largest trading partner, largest source of imports and second largest export destination in ASEAN, Viet Nam is becoming an important destination for Chinese enterprises to go overseas. According to the latest data from the General Statistics Office of Viet Nam, in 2023, the total value of foreign direct investment contracts in Viet Nam will be about 36.61 billion US dollars, a year-on-year increase of 32.1%; The actual utilization of foreign investment was about 23.18 billion US dollars, an increase of 3.5% over 2022.
According to the Global Times, official Chinese data shows that Chinese mainland investment flows to Viet Nam exceeded US$2 billion in 2021, 6.6 times that of 2014. In 2023, Viet Nam's foreign direct investment (FDI) will reach US$36.6 billion, up more than 30% year-on-year, basically returning to pre-pandemic levels, with investment from China growing rapidly.
TCL is a well-known Chinese brand in Viet Nam. In 1999, TCL acquired the Lu's factory in Viet Nam and set up a branch in Viet Nam, starting its global journey from here. So far, TCL has been deeply engaged in the Viet Nam market for 25 years.
The reporter of "Daily Economic News" learned from the field visit that TCL Smart Appliances Viet Nam factory is located in Ho Chi Minh City in southern Viet Nam. According to Xu Linjun, general manager of the Viet Nam base of TCL Industrial Fanzhiping BU Manufacturing Center, in 2024, TCL Smart Appliances Viet Nam factory is expected to achieve a total output value of 1 billion US dollars. In addition to the TV plant in the south, TCL also has two factories in northern Viet Nam: KONE Technology Viet Nam Factory and Maojia Technology Viet Nam Factory.
Li Dongsheng said in an interview with the "Daily Economic News" and other media on July 30 that TCL Viet Nam has two tasks: one is to supply Viet Nam and ASEAN markets; The second is to cover sales in the North American market as part of the global supply chain. Li Dongsheng mentioned that Viet Nam's import and export trade is very active, and the main objects of import and export are the United States and the European Union. "Next year, the EU-Southeast Asia Free Trade Agreement will come into force, and if it is a standard product that meets the origin of origin, it can also enter the EU duty-free."
It is reported that in the first half of 2024, TCL will achieve revenue of 3.68 billion yuan in Viet Nam, a year-on-year increase of 14.4%; The industrial output value was 3.78 billion yuan. At the same time, in the first half of this year, TCL's overall revenue was 153.8 billion yuan, a year-on-year increase of 8%.
Speaking of Chinese enterprises going overseas, Li Dongsheng believes that whether in Viet Nam or other countries, in order to run local business well, the business strategy and concept of enterprises must first take root in the local area. "It's very difficult for us to go to a place and just think about selling our products in the local market to make money. While developing itself, it is necessary to contribute to the local social and economic development, so as to be recognized by the local community. In addition, the supply chain should be gradually deepened, and it is meaningless to not be a local 'screwing' factory. ”
In the future, we will increase the efforts of To B industrial products to go overseas
Li Dongsheng also said in an interview with the media that TCL has gradually formed a relatively complete global supply chain system in the past 25 years. At present, TCL has 46 R&D centers and 33 manufacturing bases around the world.
Overseas markets are becoming an important support for TCL's revenue growth. In the past five years, TCL's overseas revenue has increased from 59 billion yuan to 125.3 billion yuan, with an average annual growth rate of 17.6%. In 2023, TCL's overseas product revenue will account for nearly half of its total revenue.
The reporter learned that in the first half of this year, TCL's terminal products increased by 28%, of which the overseas market contributed 30% growth, the domestic market increased by 8%, and the cumulative terminal business increased by 28%. "Now the revenue of TCL's terminal products overseas accounts for more than 2/3 of the total revenue." Li Dongsheng said.
In the past month or two, Li Dongsheng's overseas itinerary has been full, and he has run through TCL's major overseas markets. He admitted to reporters that the growth of the Chinese market is relatively slow, and the company has to look for opportunities in other markets around the world. "This year we have the European Championships, we have the Olympics, and we have a 59% increase in color TV (sales) in Europe. This is unthinkable in the Chinese market. Therefore, (we) have to go overseas to 'roll' and get a little more share for Chinese enterprises and China's manufacturing industry." ”
In mid-July this year, TCL's TCL Zhonghuan (SZ002129, share price 8.73 yuan, market value 35.3 billion yuan) just announced that it would cooperate with a subsidiary of the Saudi Arabia Public Investment Fund (PIF) to build a crystal chip factory in Saudi Arabia, with a planned investment of 2.08 billion US dollars, about 15 billion yuan, and Li Dongsheng attended the signing ceremony. For the above-mentioned overseas investment, Li Dongsheng told reporters on July 30: "In the future, our overseas industrial layout will indeed change in structure... ”
"The transformation and upgrading of the industry will also be realized overseas, and we may continue to deploy related high-tech basic industries and products in major overseas markets in the future." Li Dongsheng said.
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