Chinese TCL Aims for Number One in Europe

Chinese electronics giant TCL is shifting from low-cost TVs to premium products, aiming to dominate Europe’s market while expanding into small appliances and smartphones.

A Shift in Strategy
The world’s second-largest television brand is transitioning from low-cost models to a more premium offering, with ambitions extending to small appliances and smartphones.

A Brief History

Founded in 1981 in Huizhou, near Shenzhen, China, TCL began as a low-profile company but has since grown into a global leader. The brand now boasts celebrity ambassadors like Neymar, Varane, and the French rugby team, underscoring its global aspirations.

In 2022, TCL claimed the second spot globally in TV sales volume (11.7% market share), trailing South Korea’s Samsung (19.6%) but surpassing LG (11.69%) and competitors Hisense (10.5%) and Xiaomi (6.2%).

Rivalry with Hisense

TCL and Hisense have followed similar strategies: dominate their domestic markets first, then expand internationally. A key milestone for TCL was its 2003 acquisition of French brand Thomson, giving it access to established distribution networks. This strategic move enabled TCL to sell 24 million TVs globally in 2022.

Technological Advantage

TCL’s vertical integration and technological expertise have allowed it to compete with industry leaders like Samsung and LG. The company’s advanced manufacturing and R&D capabilities ensure the production of high-quality LCD, QLED, and OLED screens, which make up two-thirds of a TV’s component costs.

Challenges and Investments

Despite a 4.6% revenue decline in 2022 to €8.5 billion due to market contraction, TCL continues to invest heavily in gaining market share. Its affordable large-screen TVs, ranging from 55 inches upwards, attract budget-conscious consumers.

Expanding into Smartphones

TCL has leveraged legacy brands like Alcatel and BlackBerry to enter the smartphone market, focusing on affordable models (€150-€300). The brand has significant market presence in Spain, Italy, Portugal, and Greece and recently unveiled a foldable smartphone prototype, aiming for a launch within three years.

Overcoming Weaknesses

TCL faces challenges in brand recognition, especially against premium competitors like Sony and Panasonic. Its reliance on Google’s Android TV limits its ability to differentiate user experience, unlike Samsung or LG. Moreover, TCL is underrepresented in gaming-specific TVs, a lucrative and rapidly growing market.

Looking Ahead

TCL plans to expand beyond TVs and smartphones into small appliances, including refrigerators and washing machines, leveraging its expertise in connected devices. With a step-by-step approach, TCL is poised to challenge established players and carve out a larger share of the European market.