Chinese-Brazilian home appliance firm sets up paradigm for bilateral business cooperation

Date: 24 Sep 2021

Making a profit in the first year of its establishment and retaining a top three market share in five years, Chinese-Brazilian home appliance joint venture SEMP TCL is setting a paradigm for business cooperation between China and Brazil.

Jointly established by Chinese electronics giant TCL Technology and time-honored Brazilian home appliance manufacturer SEMP in 2016, SEMP TCL had a win-win pattern embedded in its gene from day one.

"At that time, it was very clear to us that TCL was going to position itself in the short term as a leader in this industry, and this has happened," Felipe Hennel Fay, vice-president of SEMP TCL and also grandson of the founder of SEMP, told Xinhua in a recent interview while recalling the early days of the partnership. "We were very pleased with this joint venture."

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

Yue Haiping, vice-president of SEMP TCL, said that TCL's advantages in technologies, supply chain and vertical integration capacity, as well as SEMP's knowledge and expertise about the local market contributed to the success of the joint venture over the past five years.

Fay agreed with Yue. "The beauty of our joint venture is to combine local tradition, knowledge, expertise, and deep understanding of the Brazilian market with a worldwide expert, which is TCL, in terms of providing the right products with high-end technology at affordable costs," he said.

Since the outbreak of the COVID-19 pandemic, global supply chain has suffered significant impacts. A short supply and price hike of key materials crucial to electronic appliances lasted over a year, while shortages of containers and cargos, as well as skyrocketing shipping fees threatened the operation of the SEMP TCL's manufacturing base in Manaus, Amazon state.

Nevertheless, the company managed to overcome all the difficulties and outperformed other players in the flagging industry.

In 2020, SEMP TCL obtained a 11.2-percent share in Brazil's TV market, up 47 percent year-on-year. In the first seven months of 2021, its market share rose further to 15 percent, and it even acquired over a 20-percent market share in a single month. Today, the company ranks the third in Brazilian TV market and its growing momentum is still robust.

"We are all leaving this pandemic stronger than we entered it," said Fay, who believed "the combination of forces" was key for the joint venture to gain market share during the pandemic.

"I think the example of the cooperation between SEMP and TCL could be easily replicable for several other industries in Brazil," he added.

The success of the joint venture increased TCL's commitment to the Brazilian market. The Chinese multinational purchased a 40-percent stake of SEMP TCL in 2020, becoming the controlling shareholder of the joint venture with a total stake of 80 percent, while SEMP held the remaining 20-percent stake.

Besides its core products, televisions and professional air conditioners, SEMP TCL plans to bring more electronic appliances to Brazil, and to create a smart ecosystem connecting TV with air conditioners, HiFi devices, refrigerators, washing machines, and other smart appliances of TCL to Brazilian consumers, said Chen Lei, marketing director of SEMP TCL.

Echoing Chen, Yue said it was "natural" to extend the smart family from TCL's flagship product TV to other appliances in Brazil where the concept of smart family is still new.

Source: China Daily

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