TCL focuses on Brazilian appliance, PV markets

Chinese consumer electronics maker TCL Technology Group Corp said it will continue to invest in Brazil and ramp up its localized operations, with a key focus on home appliances and photovoltaics, as part of a broader push to expand its footprint overseas.

"We are conducting further research and discussion about the photovoltaic business in Brazil. Apart from the existing television, air conditioner and smartphone businesses, we plan to introduce refrigerators, washing machines and other white goods to Brazil for sale in July," said Yue Haiping, general manager of the overseas marketing department's Brazil branch at TCL Industries Holdings.

At present, the company has two manufacturing bases in Manaus, Brazil, where the local government has provided favorable tax policies. Yue said the annual production capacity of its TV factory reached 3 million units, while its air conditioner factory went into operation last year and can produce nearly 1 million units each year.

"We now have more than 1,500 employees in Brazil. The localized manufacturing capacity is of great significance to expand TCL's business in Brazil as you learn more about the local market, and local consumers will also have higher level of recognition and acceptance of brands and products," Yue said.

Brazilian consumers are displaying rising demand for high-end electronic devices, and looking for large-sized TVs and premium refrigerators, air conditioners and washing machines, said Felipe Hennel Fay, vice-president of SEMP TCL.

SEMP TCL is a joint venture established by TCL and Brazilian home appliance manufacturer SEMP in 2016. It mainly targets the mid-range to high-end market in Brazil.

Founded in 1942, SEMP rolled out Brazil's first TV in 1951 and has laid a solid foundation in understanding the Brazilian market and building a local distribution network, which was exactly what TCL needed in exploring the local market.

Fay said there is tremendous growth potential in fields like air conditioners, refrigerators and washing machines in Brazil. In addition to the consumer electronics industry, Chinese companies can further explore development opportunities in the automobile segment in the South American country.

Furthermore, there will be plenty of new opportunities to be jointly explored by Chinese and Brazilian enterprises along with green energy transition, and the rapid development of the internet of things and 5G technology, he added.

Chinese enterprises represented by TCL know very well how to adjust their strategies to provide products that satisfy the needs of local consumers, which is also their competitive edge in the consumer electronics segment in Brazil, Fay said.

"Brazil is the largest market in South America, with huge development potential. Local consumers have shown growing demand for high-end home appliances," said Liang Zhenpeng, an independent consumer electronics analyst.

Liang said setting up production bases in Brazil not only brings China's advanced manufacturing, research and development as well as management capabilities to the local market, but creates job opportunities for locals and enhances the global competitiveness of Chinese enterprises.

China's domestic home appliance market is almost saturated, so major players should accelerate steps to expand in emerging markets, such as South America and Africa, and seek new sources of revenue, he added.

SEMP TCL has seen its sales volume and market share continuously grow. Data from market research company GfK showed that the market share of SEMP TCL in Brazil for televisions stood at 8.5 percent in 2019. In the first six months of 2022, its market share rose to over 16 percent.

In what appears to be an unstoppable trend, Chinese home appliance manufacturers are stepping up efforts to make forays into overseas markets and improve localized production for new growth points and long-term development, said Zhao Meimei, assistant president of Beijing-based market consultancy AVC.

Enhancing global operational capacity will help Chinese high-tech manufacturing enterprises better utilize global resources, and promote the upgrade of China's manufacturing, Zhao said.