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China's TCL Sets Sights on Premium TV Market with Large Screens to Revamp Brand Image
TCL aims to reposition itself as a premium brand by focusing on higher-end, larger screen models. Revenue for TCL's TV business grew 30% YoY in Q1 2024. Chinese brands' aggressive pricing and promotions for mini LED TVs drove growth in the premium TV segment in China.
Chinese television manufacturer TCL is embarking on a strategic shift to position itself as a premium brand in the industry. The company aims to enhance its image by focusing on the sales of higher-end, larger screen models.
Known for its reputation as a "value for money" TV brand, TCL is now aiming to become a producer of affordable premium products. Dmitri Hu, vice-president of TCL Industries, shared this vision during a press briefing at the company's Global Partners Conference in Wuhan.
TCL's TV business has experienced a significant boost in revenue, with a 30% year-on-year growth in the first quarter of 2024. Bill Jiang, vice-president of TCL Industries, attributed this growth to the increasing popularity of TVs with larger displays.
Building on this momentum, TCL is confident that it can continue to capture the market as more consumers prefer large screen televisions. The company is also leveraging mini LED technology to offer larger devices at competitive price points compared to OLED TVs of the same size.
The premium TV segment in China witnessed remarkable growth in 2023, with a 39% increase in shipments and a 49% surge in revenues. Chinese brands, including TCL, capitalised on this growth through aggressive pricing and promotions for mini LED TVs, according to a report by research firm Counterpoint.
On a global scale, TCL and its Chinese competitor Hisense secured the second-largest market share in terms of TV shipments, each holding 11% of the market in the previous year. Samsung maintained its top position with 16% market share worldwide.
While TCL has been recognised for its affordability and good picture quality, the brand has lagged behind in terms of brand image and cutting-edge technology, according to Ivan Lam, senior analyst at Counterpoint.
Despite these challenges, TCL remains optimistic about successfully repositioning itself as a premium brand. Hu expressed confidence in the company's ability to achieve this transformation, acknowledging that it may take some time.
During the Global Partners Conference, TCL showcased its latest innovation, a 115-inch mini-LED TV, which has achieved mass production. The company also unveiled a preview of the X11H Max, a 163-inch Micro LED TV, which is currently priced at 800,000 yuan (US$110,455) and has already received more than 10 customer orders.
TCL Electronics, listed on the Hong Kong stock exchange, reported a 10.7% increase in revenue for 2023 compared to the previous year. The company attributed its positive results to its "mid-to-high-end + large-screen" strategy.
Looking ahead, TCL faces challenges such as rising supply chain costs and keeping pace with display technology advancements, particularly in mini-LED and OLEDs. Counterpoint's Lam noted that Korean display makers are leading in the OLED segment.
To mitigate supply chain risks, TCL is closely monitoring the impact of surging commodity prices, inflation, and high interest rates. The company is actively hedging to navigate these challenges.
TCL has also adopted a localised approach to its global supply chain, focusing on producing and selling locally. The company has expanded its manufacturing capabilities in regions such as Latin America, Central America, Europe, and countries like Turkey and Vietnam.
TCL aims to reposition itself as a premium brand by focusing on higher-end, larger screen models
Revenue for TCL's TV business grew 30% YoY in Q1 2024
Chinese brands' aggressive pricing and promotions for mini LED TVs drove growth in the premium TV segment in China
Source: SCMP