TCL Becomes the Top 100 Global RDE

TCL Becomes the Top 100 Global RDE

August 14th,2006

The Boston Consulting Group (BCG) has recently selected the top 100 global RDE (Rapidly Developing Economies) and TCL Multimedia Technology Holdings Limited is one of the six Chinese consumer electronics enterprises on the list.

According to BCG, the top 100 global RDE were selected from different enterprises of 10 RDE countries. The top 100 were selected from more than 3,000 short listed enterprises according to the scale of business, overseas business volume and prospect for future expansion. These enterprises have the same ambition in developing the global markets, yet utilizing different strategies and at different stages of globalization.

At the same time, they can fully utilize similar competitive edges to seek for international growth. Chinese and Indian enterprises, being key representatives of the newly developed enterprises of RDE, are occupying increasingly important positions in the current global economy. The selected top 100 RDE has an aggregate annual income of US$715 billion and an annual increment of 24%.

BCG points out in the report that the top 100 RDE are realizing globalization through different and unique ways which mainly include 6 modes, namely pushing RDE branding globally, changing from RDE production to globalized innovations, seeking for global leading position in a particular domain, making profit through utilization of natural resources of RDE, introducing new business models to various markets and acquiring natural resources.

28 enterprises adopt the strategy to push RDE branding globally and 18 of which are Chinese that mainly focus on consumer electronics and home electrical appliances. TCL and Hisense, among others, have established production bases at numerous new markets in addition to local production forces in countries such as Vietnam, India and Australia.

TCL also acquired copious experience through the establishment of joint venture enterprises and strategic cooperation with globally renowned manufacturers to speed up the development process.

Reporters learned from TCL that it has completed its globalization of business by establishing 6 major research centres, 18 production bases and 40,000 points of sales network. It also owns various brands including TCL, Thomson, Alcatel, RCA, Rowa etc and basically cover almost all markets in the world.

Globalization helps bring rapid business growth and continual expansion of business to TCL. In 2005, the TCL Group has $51.676 billion sales revenue which is a 28% growth as compared with the preceding year. TCL also enjoyed progressive achievement in globalization when overseas income has exceeded local income for the first time.

TCL has made a positive development with accumulated annual sales of 22,590,000 sets of color TV (13,000,000 sets of which came from overseas sales) which is 38% increment as compared with the preceding year and became world number one. The sales of mobile phones amounted 10,000,000 sets which is 9% increment.

7,500,000 sets of which were overseas sales which represents a 136% increment. The accumulated annual sales exceeded 700,000 sets which is a 13% increment.

The Boston Consulting Group (BCG), being a leading global consultancy firm, was established in 1963. In the process of selecting the top 100 RDE, a small group of distinguished consultants selected 12 major RDE countries according to GDP, export volume and direct overseas investment, and shortlisted more than 3000 enterprises from these countries to form a preliminary list.

They have adopted 4 stringent steps for selection. The first step was to confirm selected enterprises came from RDE countries and took out joint venture or branches of multinational companies. The second step was to choose enterprises with more than US 1 billion annual income in 2004. The third step was to take out enterprises whose income from international business was less than 10% of the total income.

The fourth step is to evaluate the potential for globalization of enterprises which fulfilled the 3 above mentioned criteria. At the same time, BCG has established 5 standards, namely the level of globalization of the enterprise, its subsidiary, sales network, production base and research centers; the extent of overseas investment through acquisition in the past 5 years; the ability to support globalization development via self-owned capital, stock market or other capital raising channels; the depth and width of integration of enterprise technology and intellectual property, attractiveness of existing products and its pricing in the international market.

Upon analysis, 80 enterprises have finally come out. Although the other 20 enterprises unable to pass the minimum threshold of the US 1 billion, they have created unique globalization strength or commercial model and as a result, they were also included on the list of the top 100.