How TCL Became The 2nd Largest TV Maker

Ethan
0

THE UNSTOPPABLE RISE OF TCL

TCL has officially overtaken LG to become the second-largest TV maker in the world only beaten out by Samsung. This is especially surprising given that TCL did not even enter the North American TV market till 2013. But, these last 10 years have been a rocket ship for TCL. 

How TCL Became The 2nd Largest TV Maker


They were able to enter a highly competitive commoditized industry and make a name for themselves against industry giants. How you ask? Well, on the surface, it seems that one of their biggest selling points is price. 


They sell TVs starting at just $140 on Amazon for a 32-inch. This goes up to $250 for 50 inches, $380 for 65 inch, and only $550 even for 75 inches. And it’s not just these lower-end TVs that they sell for cheap either. They’re cheap across the board. 


For example, you can get a 98-inch 4K TV from TCL for just $2000. For perspective, the cheapest 98-inch from Samsung costs $5000, the cheapest from Sony costs $8000, and as for LG? Well, they don’t even sell a mass-produced 98-inch TV. They do have a 97-inch flagship TV for $25,000 though. 


But there’s a lot more to TCL's success than just offering cheap TVs. If that was all there was to it, manufacturers like Vizio and Insignia should be the market leaders as they’ve been doing the same thing for a lot longer. 


In fact, Vizio currently only holds a 3.1% market share globally, or about a quarter of TCL, though they are a lot more popular within the US. But, with that being said, no one who has the option to get something other than a Vizio would get a Vizio. The same, however, cannot be said about TCL. 


People with the ability to get any TV in the entire world even for free are often opting to go with TCL. For example, just a few months ago, iJustine got a 98-inch TCL TV. And around the same time, Linus got a 115-inch TCL TV that’s not even available within the US market. Maybe you can write off these guys as suckers for large screens. 


Still, even Caleb Denison from Digital Trends, whose entire job is to review TVs recently said that he personally prefers a larger TCL over a smaller Sony or Samsung despite being a stickler for image quality. So, TCL is not only the cheap choice but oftentimes, it’s straight up the preferred choice. 


So, here’s the unstoppable rise of TCL and how they went from a nobody to the second-largest TV maker in the world within just a decade. 


THE NO NAME ADVANTAGE

Li Dongsheng Founder of TCL


Taking a look back, the story of TCL takes us all the way back to Guangdong, China to 1981. Technically, the founder of TCL was a man named Li Dongsheng but honestly, this guy isn’t all that notable because he wasn’t really a traditional founder. You see, TCL or at the time, TTK, started off as a state-owned enterprise specializing in producing audio cassettes. 


It’s not clear what the name TTK stood for but it didn’t last all that long because a Japanese company called TDK would sue them for having a name that was too similar. So, in 1985, TTK changed its name to TCL or Telephone Communications Limited. 


Fun fact: TCL was the first Chinese company to have their brand name registered in English. This was a bit odd given that they weren’t even targeting a Western market but I guess they already had the long-term vision in mind. 


Anyway, the name change naturally led to TCL entering a new industry: the telephone sets business. This was a relatively hard industry to break into especially as a no-name player even with CCP backing, but this was also one of TCL’s biggest strengths which brings us to TCL’s first secret: thriving as a no-name player. 


Nowadays, companies are better at branding than ever. In fact, one of the only reasons that companies can charge so much for certain products is thanks to their brand name. For example, no hate towards the Apple Vision Pro, but the only reason Apple can charge $3,500 for it is because of the Apple brand. 


If Meta came out with the same headset for the same price, they would only sell a fraction of what Apple would sell because the Apple brand carries substantially more weight when it comes to consumer electronics. As such, most businesses would be nervous about taking on industry giants like Apple Samsung, and Sony but TCL thrived under these circumstances. 


The way TCL sees it is that while their brand may not give them any perceived advantage, it also comes with absolutely no baggage. In other words, the product can do all the talking. This is precisely how TCL was able to break into the Chinese telephone market. 


Consumers had no preconceived notions of TCL which allowed them to show people leading technology for cheaper prices and win over the masses. For example, one of their biggest hits was in 1994 when they launched China’s first cordless phone. And within the next 10 years, they would become the number 1 mobile phone brand in China. 


Jumping forward to the 2010s, they would use this same strategy to take on the TV market. According to vice president of sales Chris Larson, their North American strategy was quite straightforward. They identified that the average American was just looking for 3 things: price, TV size, and some sort of future-proofing frill which at the time was 4K. So, TCL simply offered the biggest 4K TV they could for each price range. 


Combine this with the no baggage TCL brand name and consumers didn’t just write them off as a cheap Vizio when they saw it for the first time at Best Buy. But the no-name play was just the first of TCL’s secrets. 


THE IN-HOUSE ADVANTAGE

TCL opened its first production line in 1984


Moving back to the early 1980s, TCL opened its first production line in 1984, and it’s still around to this day. The reason that this is so significant is because TCL is one of the only modern brands that still has full control over the branding and manufacturing process. 


Almost all American brands just outsource their manufacturing to Chinese partners like Foxconn and TSMC, and there’s good reason for this. Companies like Foxconn can produce at such a large scale that their manufacturing costs are simply unbeatable by Western producers. 


So, western brands are more or less forced to go to China which is fine when they’re competing against other Western brands who are doing the same thing. But, when they have to compete against a Chinese brand with in-house manufacturing, the equation is a lot different. 


Instead of Foxconn selling iPhones to Apple for a 5% premium and then Apple marking them up another 20 or 30%, Foxconn can sell iPhones directly to the consumers for a 5 or 10% premium. This is precisely what destroyed the American PC market. Brands like IBM, Dell, HP, and Compaq simply were not able to keep up with the pricing advantages of Lenovo, Asus, and Acer. 


But, you could argue that this sort of evolution had already happened within the TV market before TCL entered the scene. The Asian brands Samsung, Sony, and LG had already displaced the Western brands like Philips Magnavox, RCA, and Westinghouse, but the reality was that these brands had room for improvement in terms of efficiency. 


Take OLED for example. The OLED giants are obviously Samsung, LG, and Sony, right? Well, from the consumer side yes, but from the backend, it’s really just LG. In fact, Sony doesn’t produce any of their own OLED panels. All of their OLED panels are actually made by LG. 


Samsung, on the other hand, does make its own OLED panels, but they too source a lot of panels from LG. Now, you could argue that Samsung and Sony technically own the IP behind their panels, so even though it’s LG that’s producing the panels, it’s Samsung and Sony that own the technology, but from a pricing perspective, that’s completely irrelevant. 


If Samsung is buying its OLED panels from LG, LG obviously has to bake in some sort of margin into the panels, and that’s just for the panels. The same logic applies to the casing the speakers the chips and the memory and so on. 


TCL, however, is almost completely vertically integrated. In fact, they don’t even outsource rudimentary things like plastic production. They literally make their own plastic. Before they entered the North American TV market, they were a massive supplier for the North American TV market.


Samsung was outsourcing LCD panel production to TCL as early as 2008

 

In fact, Samsung was outsourcing LCD panel production to TCL as early as 2008. And you know those massive 98-inch TVs from Samsung and Sony? Well, those panels aren’t actually made by Samsung or Sony or even LG, they’re actually made by TCL. 


So, while TCL entered the American market as a no-name brand, it by no means entered the market as a new brand. No, they were a completely vertically integrated company with years of experience producing panels that Americans already loved. They just didn’t know that it was from TCL. 


With that being said though, it’s not like TSMC could just suddenly replace Intel and Nvidia or like LG could just suddenly replace Sony or Samsung just because they’re the supplier. And that brings us to the last ingredient behind TCL’s success. 



THE SUPERIOR ADVANTAGE

Usually, when a brand decides to offer cheap goods, the strategy is to throw everything other than price out the window. This includes quality, reliability, cool features, basically everything. The sole focus of these brands becomes offering the absolute cheapest products they can. This is why the community generally hates things like Vizio TVs. Their average rating is literally 1.4 stars. 


Anyone who buys such products knows that it’s a piece of junk and the only reason they buy it is because it’s so cheap. But, this has never been TCL’s approach and I think this is really the key to their success. TCL’s goal was never to be the budget TV brand that creates the cheapest TVs possible. 


Rather, their goal was to simply offer the same TVs as Sony, Samsung, and LG but for a lower price because they have better pricing economics. And this nuance is what has cemented TCL as a TV leader over the long term. 


All those people who bought TCL TVs 10 years ago half expecting it to be a piece of junk that stopped working in a few years were pleasantly surprised by the quality and reliability. This isn’t to say that TCL TVs were perfect from day one. 



Also Read:

What Happened To Browser Toolbars?

Exploring Walmart's Flower Selection: Types, Prices, and Options

What Happened To The Once-massive Telecom Company Sprint

Why LinkedIn may be the most powerful social media platform

How Did Europe Fall So Far Behind In Technology



Some users naturally had issues with dead pixels, backlight bleed, and panel uniformity, but over the years, these issues have become increasingly rare. In fact, at this point, you could make a strong case that TCL is not only trying to match the competition but outdo the competition. 


Take CES 2024 for example. Digital Trends dubbed TCL’s CES lineup a fan favorite largely because this was the first time that we actually saw something practical at CES in regards to TVs in a long time. For several years now, Samsung has just been showing off their wall TV which I gotta say is extremely cool. But, it also costs $220,000, so being cool is the only thing it has going for it. 


This year, Samsung showed off a transparent TV which again is super cool but also not that useful. TCL on the other hand was also pushing the boundaries but less in a theoretical sense and more in a practical sense. For example, they showed off the world’s largest mini LED TV at 115 inches. 


And this wasn’t just a cool showcase either, they want to mass produce this TV later this year for $20,000. That’s by no means a cheap TV but it’s literally a magnitude more practical than what the competition was showing off. What TCL is doing can actually make 100+ inch TVs affordable within the next couple of years. 


After all, they’ve already got 98 inches down to just $2,000. And I think this is the common theme between all of TCL’s strategies: practicality. As a no-name brand, they focused on the practical intrinsic value of their TVs instead of marketing and branding fluff. 


As a Chinese supplier, they focused on the practical costs that they could save using pricing efficiencies and vertical integration instead of sacrificing quality or reliability. And most recently, as a TV market leader, they're using their notoriety and influence to push forward TV evolution practically: offering people bigger TVs and better picture quality for the same price instead of focusing on some gimmick like 3d TVs or curved TVs or 8K TVs. 



Wrapping Up

The bottom line is that TCL has brought a refreshing practical take to the TV market and that’s why they’ve been absolutely unstoppable.

Post a Comment

0Comments

Post a Comment (0)