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TCL is a global partner of the Olympics. Photo: Nikkei . |
TCL and Sony have announced plans to form a joint venture to take over Sony's home entertainment (including TV) division, with TCL holding 51% of the shares and Sony 49%. The new company is expected to begin operations in April 2027.
"The new company's products are expected to bear the globally renowned Sony and Bravia brands, bringing new value to customers through these brands," the announcement from the two companies stated.
According to tech experts, the agreement allows Sony to leverage TCL's modern supply chain and ecosystem. Meanwhile, the Chinese conglomerate has set two main goals: to surpass Samsung to lead the TV market and to increase domestic competitiveness.
Enhancing TCL's competitiveness
A day after announcing the joint venture with Sony, TCL shares on the Hong Kong stock exchange surged 18.6%, reaching HK$12.92, their highest level in 20 years. Investors believe the partnership with Sony will boost TCL's profits.
In the fiscal year ending December 2024, TCL's revenue reached $12.7 billion , with net profit of approximately $218 million . Both indicators showed growth for the second consecutive year.
According to Nikkei , TCL's net profit is projected to continue increasing in 2025. However, the net profit margin in 2024 is only around 16%, a decrease of 5 percentage points compared to 2019.
The decline may stem from competitive pressure in China. Although TCL's TV sales overseas are nearly double, its gross profit margin in the domestic market is higher.
However, amid sluggish consumer demand in China due to the real estate market downturn, price competition threatens profitability.
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A Sony Bravia TV model with an OLED panel. Photo: The Verge . |
In this context, TCL wants to leverage the Sony brand to increase its competitiveness in the high-end TV segment in China and North America, the world's largest TV market.
On the US retailer Best Buy's website, Sony's 65-inch Bravia TVs are priced from $700 to $3,500 , while TCL TVs of the same size are priced from $380 to $3,000 .
In North America, Sony enjoys strong brand recognition and numerous strengths, including a range of features optimized for PlayStation gaming on Bravia TVs.
TCL plans to focus on expanding sales of its Sony-branded products. Last year, the group's subsidiary, CSOT (China Star Optoelectronics Technology), expanded its LCD panel production capacity by acquiring LG Display's factory in Guangzhou. Therefore, leveraging the Sony brand could help TCL improve its cost competitiveness.
"Holding a 51% stake in the joint venture means TCL will be in charge of all critical processes, including manufacturing and operations," said Liang Zhenpeng, a home appliance market analyst in China.
Learn from Sony
According to market research firm Sigmaintell , TCL held 14% of the global TV market share last year, ranking second after Samsung (16%).
For comparison, Sony ranks 10th with a 2% market share. It is estimated that by 2027, the combined market share of TCL and Sony TVs will expand to 17%, higher than Samsung.
In China, TCL has long been known for manufacturing TVs and home appliances. The group's predecessor was TTK Household Appliances, a cassette tape manufacturer founded in Guangdong in 1981.
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Li Dongsheng, Chairman of TCL. Photo: Bloomberg . |
Li Dongsheng, the company's 43rd employee and chairman since the late 1990s, actively promoted TCL's expansion plans. According to Nikkei , it was one of the first Chinese companies to venture into overseas markets, including Vietnam in 1999.
Li once shared the view that Sony was TCL's "senior" in the field of home appliance manufacturing and overseas expansion.
In 2021, Li quoted Nobuyuki Idei, the late chairman of Sony, as saying that owning the Chinese market is an advantage for domestic companies, but it can also hinder expansion overseas.
This isn't the first time Japanese TV brands have been acquired by Chinese companies. In 2018, Toshiba sold its Regza brand to the Chinese home appliance conglomerate Hisense.
Since then, Hisense has leveraged Toshiba's development capabilities, combined with competitive pricing, to revive sales of its Regza TV line.
Source: https://znews.vn/tcl-muon-vuot-mat-samsung-post1622947.html
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