Skyworth's Southeast Asia Manufacture Base Plaque-unveiled, Targeting at Southeast Asia Market

May 26,2016

    On May 24, 2016, Ma Xingrui, a central committee member, deputy party secretary of CPC committee of Guangdong and party secretary of CPC committee of Shenzhen, under the company of Mr. Huang Hongsheng, the founder of Skyworth, Ms. Lin Weiping, the chairman of board of directors of Skyworth Group, attended a short but grand plaque-unveiling and commencement ceremony for "Skyworth's Southeast Asia Manufacture Base" in Indonesia.

    After carefully visiting the factory, Ma communicated friendlily with the staff of the base, hoped the best for the future and encouraged the staff to work hard and blend into local culture to set up a benchmark for development of Chinese enterprises in Indonesia.

    At the seminar, Skyworth raised several requests for support from the government of Shenzhen for its development, such as setting up an office for Shenzhen's businesses in Djakarta; the government's bolstered policy support for the export of businesses; applying for a land at Qianhai Free Trade Zone for expanding import and export. All these requests had been arranged by Secretary Ma to the governmental officials in the delegation for implementation, which fully reflected the efficiency and pragmatism of the government of Special Economic Zone, and its strong support for the enterprises of Shenzhen to go abroad, and infused a great impetus and confidence into the internationalization strategy and future development of Skyworth.

    Riding on the Wind of "One Belt One Road", Speed up Expansion of World's Market

    The predecessor of the base is Toshiba Indonesia Consumer Goods Manufacture Corporation which was established in 1996 as a standard Japanese enterprise. In recent years, due to the problem of costs and profits, plus the strong rise of Chinese home appliance enterprises, Japanese brands have begun to withdraw from the home appliance industry.

    Since Skyworth Group officially launched the overseas internationalization path for its own brand in 2010, it has set up seven overseas branches for its own brand. In September 2013, President Xi Jinping advocated the concept of "One Belt One Road", which provided Chinese enterprises with a guide of strategic theory and tactic implementation for their overseas development and bolstered the confidence of Chinese enterprises in expanding business overseas.

    Skyworth grasped the chance based on the needs of its own development strategy and took a decisive action under the guide of "One Belt One Road" by integrating its overseas supply chain systems and providing its overseas business with a solider service platform and guiding thought. Meanwhile, it also tried to achieve mutual trust and win-win cooperation with local governments, enterprises, distributors and customers to the largest extent. Therefore, it managed to purchase Toshiba's TJP factory in Indonesia after it purchased Sinotec, a famous home appliance brand of South Africa in September 2014 and purchased a German high-end home appliance brand Metz in June 2015. With these purchases, it has sped up its steady pace towards the world's market. So far, Skyworth's Indonesia factory has become the first overseas factory independently operated by itself in the real sense and a manufacture base of Skyworth in Southeast Asia and a supply chain hub for its overseas market.

    Sun Weizhong, general manager of Skyworth's marketing headquarters for its overseas markets, expressed, "China is now implementing the strategy of One Belt One Road. The trip of Secretary Ma to Indonesia this time is an encouragement for Chinese enterprises to go abroad. He has unveiled the plaque for Skyworth's Southeast Asia Manufacture Base, which is not only a recognition of the path of Skyworth's own brand, but also a milestone event for the TJP factory itself."
    To Be the Best Chinese Color TV Brand in Indonesia with Steadfast Efforts

    It was reported that after Skyworth purchased the TJP factory, it has significantly boosted the confidence of local distributors. Many excellent clients have begun to offer to cooperate with Skyworth. Under the good beginning, Skyworth's Indonesia Branch displayed a strong momentum and achieved business profit for three months in a row and its monthly sales volume of products was above three times that of previous year. "Currently viewed from the orders, the first year after the purchase should be able to witness a breakthrough of the threshold of a million sets."

    What's worth mentioning is that among the several major brands of China that entered Indonesia, Skyworth has become the Chinese color TV brand with the best performance.

    On this, Sun Weizhong believes, the steady business strategy and consistency and continuity of implementation of strategy and direction have enabled Skyworth to devote itself to cultivating the market patiently under the circumstance where it witnessed pressure and loss at the beginning in Indonesia. Therefore, it has gradually taken its foothold and become bigger and stronger. Besides, the smooth purchase of TJP factory was just like a stimulant for the local distributors, who are full of confidence and expectation in cooperation with Skyworth.

    "Originally some excellent distributors we have negotiated with for several years were unwilling to cooperate with us because they have seen too many Chinese enterprises come and go, and thus have developed an impression of instability of Chinese enterprises.. However, since we purchased TJP, our performance has risen all the way, and they soon began to cooperate with us." Sun Weizhong has compared the purchase of TJP factory to a "heavy weapon" that can bring a lot of hope to the distributors.

    It's noteworthy that though most local distributors of Indonesia are Chinese who understand Chinese culture and have advantages in communicating with Chinese enterprises, they seldom choose to cooperate with Chinese brands, but incline to choose brands of Japan and Korea. It's difficult to change their idea and make them offer to cooperate with Chinese brands. This indicates the adequate efforts and sincerity Skyworth has made and displayed.

    Besides, since currently Indonesia market is still in the era of "network talks", local distributors play a significant role to Skyworth. In the allocation of interest, it has always been a policy insisted by Skyworth Indonesia to try every means to guarantee the interest of the distributors, and keep communicating with them ceaselessly for years, actively seek a win-win mode and touch them with sincerity and performance.

    Purchase of TJP Significant for Overseas Business of Skyworth

    The purchase of TJP factory is of great significance to the development of overseas business of Skyworth. Firstly, as one of the ten countries of ASEAN, Indonesia is an important partner of China-ASEAN (10+1). By establishing a Southeast Asia supply chain base here, it can make a better use of related governmental policies to provide a stronger support for the backstage service of Skyworth to the Southeast Asia market. Secondly, Indonesia is the country with the fourth largest population in the world (with a population of near 250 million), where the color TV market is also growing rapidly. It is the country with the most potential of home appliance market among the ten ASEAN countries, so Skyworth can better serve this market by establishing a supply chain in Indonesia. Thirdly, the labor cost of Indonesia is relatively low and thus the processing and manufacture cost is more advantageous. Fourthly, TJP has the excellent gene of Japanese brands. Through the purchase, Skyworth can better learn and draw experience from the advanced management philosophy and production technologies of Japanese enterprises, which has infused a stronger impetus to the manufacture of Skyworth.

     The ten countries of ASEAN are mutually exempt from customs duty. Indonesia is one of the ASEAN countries, which can presents advantages in tariff. According to Sun Weizhong, if the factory of Indonesia can radiate to the ASEAN, there will be a supply chain. So the whole machines manufactured by Skyworth in Indonesia can be sold to each country of the ASEAN without any customs duty, so the efficiency cost will be optimized. And brand agents can be developed in the ten countries to speed up the deployment of Skyworth in the whole market of ASEAN. On the other hand, it can also enhance the front-end advantages and threshold of Skyworth, make the rivals lag behind and achieve a breakthrough in the mode. Besides, with the experience of overseas factory, it will also internationalize the operation mode and talents of Skyworth.
    Southeast Asia Market: Outlet for Skyworth to Go Abroad

    The plaque-unveiling ceremony of the base this time is not only a memory for Skyworth to purchase the TJP factory of Toshiba and finishes the stock right transfer, but also carries the ambition of Skyworth to explore the Southeast Asia market.

    Sun Weizhong expresses that the population of the ten countries of ASEAN added up to about one billion, which is equal to 40-50% the market capacity of China. If the Southeast Asia market can be developed well, it is equal to half the market of China. Southeast Asia is not only relatively near to China, and its consumption habit is also similar to that of China, so it is an outlet for Skyworth to go abroad. He believes, once success is achieved in Southeast Asia, it may form a niche market. For example, the successful operation of Indonesia factory and the smooth development of its own brands in Southeast Asia will drive a rapid development of Skyworth in other markets of Southeast Asia. It will undergo a long time of training and reserve in the areas such as supply chain, talent reserve and cultivation and product adaptability, which will support Skyworth to build supply chain and manage factories in the emerging markets in the future.

    For the planning in Southeast Asia market, Skyworth will adopt four major directions: Firstly radiate to the whole Southeast Asia market with Indonesia as the stronghold and unify the supply chain; secondly, in operation strategy, its products will shift from medium and low end to medium and high end; thirdly, it will try double brand operation of "Toshiba" and "Skyworth"; fourthly, it will try to expand market share through online operation.