Li Dongsheng: Hopes to establish five TCLs overseas

Author | Huang Yu

Editor | Liu Baodan

In the unprecedented global upheaval of the past century, global enterprises must actively respond to market changes. As the leader of Chinese brands going global, TCL has also provided its own solutions.

From June 24 to 26, the 16th Annual Meeting of the New Champions (Summer Davos Forum) was held. During this period, TCL founder and chairman Li Dongsheng shared his views on corporate development in the current global landscape.

Li Dongsheng mentioned the hope to establish five TCLs overseas. "TCL has established operational entities overseas, effectively becoming local enterprises. The growth of these enterprises can drive the development of local industrial chains and contribute to local economic development, including employment and tax revenue. This model of globalization for Chinese enterprises can gain more acceptance from various countries."

Since going global in 1999, TCL has consistently promoted its globalization strategy, contributing to the economic and social development and environmental protection of host countries through localized operations, achieving win-win sharing. In recent years, TCL has continued to deepen its localization efforts, further dividing its overseas business into regional operational centers in North America, Latin America, Europe, Asia-Pacific, and the Middle East and Africa.

"Each regional operational center will gradually become more substantial, eventually becoming entities responsible for operations, laying out a complete industrial chain and supply chain in their respective regions, and cultivating local industrial ecosystems. They will need to have capabilities in brand marketing, channel management, retail management, user service, and even product design. From another perspective, this planning is essentially promoting, replicating, and improving the smart terminal business capabilities of the China region overseas, recreating five TCLs abroad, and allowing operational entities to take root and grow locally. Currently, overseas revenue from TCL Industries accounts for over 60%, and in the future, each of the five regional operational centers may exceed the Chinese market," said Li Dongsheng.

Currently, TCL is laying out three core industries: smart terminals, semiconductor displays, and new energy photovoltaics through its two industrial groups, TCL Industries and TCL Technology, covering over 160 countries and regions globally, and has established a relatively complete global industrial chain and supply chain system.

Data provided by TCL shows that from 2019 to 2023, TCL's overseas revenue grew from 59 billion yuan to 125.3 billion yuan, with an average annual growth rate of 17.6%. Currently, overseas product revenue accounts for nearly half of total revenue.

Li Dongsheng revealed that in the past decade, the profit margin of TCL's overseas business has been higher than that of its domestic business, which is different from 20 years ago when domestic profits were relied upon to subsidize overseas operations; additionally, the growth of overseas business has also surpassed that of domestic business, which is a result of globalization.

As a successful global enterprise, TCL's reflections on globalization hold exemplary significance Li Dongsheng admitted: "This year is the most uncertain and volatile period in my over 40 years of business management. Enterprises must adhere to their development strategies and do their own things well in an uncertain environment."

At the same time, Li Dongsheng pointed out that in the context of global economic restructuring, how to balance efficiency and fairness has become an important issue in the new round of globalization.

"As active participants in globalization, multinational enterprises need to re-examine their development strategies, shifting from purely pursuing efficiency to balancing efficiency and fairness, from merely exporting products to co-building industrial capabilities with localities, and by constructing localized industrial and supply chains to benefit the economic and social development of the industry’s location."

How to do this specifically? The "globalization is localization" that Li Dongsheng has emphasized in the past may be the answer.

Li Dongsheng stated that while TCL is conducting global layout, it actively practices localization strategies by establishing local industrial chains in key markets and regions, covering industrial investment, production manufacturing, technology research and development, and talent cultivation, combining with local resource endowments and development needs to achieve symbiosis and win-win outcomes.

He shared three main practices of TCL.

First, deepen local industrial chain support and build a localized supply chain system. Li Dongsheng pointed out that when TCL builds manufacturing bases overseas, it collaborates with upstream and downstream suppliers to establish overseas supply chain centers, improving the full-chain capabilities of local "component support + industrial manufacturing + warehousing logistics."

Second, empower local industrial chain upgrades and co-build industrial capabilities with localities. Third, create more social value and promote sustainable economic and social development locally.

Li Dongsheng mentioned that TCL's overseas manufacturing bases are distributed in countries such as Vietnam, Indonesia, India, Pakistan, Poland, Mexico, and Brazil, continuously extending upstream and downstream industrial chains, creating a large number of job opportunities locally. For example, the factory in Vietnam currently has over 7,000 local employees, and the factory in Poland can provide about 800 to 1,000 local job positions each year.

At the same time, TCL is also laying out marketing, service systems, and research and development centers in multiple countries overseas, creating diverse job opportunities locally. Currently, TCL employs over 150 local employees in the United States, and in countries like France, Australia, and Japan, it employs more than 50 local employees each.

After 26 years on the path of globalization, TCL also became a global partner of the Olympics at the beginning of this year, which will open a new chapter in its globalization journey. Standing at a new starting point, TCL continues to promote localization strategies, which will open new growth spaces for its global layout.

Risk Warning and Disclaimer

The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at one's own risk