By Stefanie Ju
Staff Writer
With such nicknames as “Tech Dragon” and “Silicon Dragon”, in recent decades, China has proved its technological prowess to the world market. Consumers look to Chinese technology companies for products ranging from cell phones to semiconductors. Seeing and acknowledging this success, private investors also entered the stage by funneling large sums of money into technology companies. There has also been growing talk about a tech race between China and the United States. This fear has led many Americans to seek greater understanding of the Chinese technology boom. As a powerful competitor in the global technology market, China provides an array of companies that challenge global powerhouses such as Motorola and IBM. Three examples of these companies are Lenovo, the TCL Corporation, and the Shanghai Electric Group.
Lenovo is a multinational computer technology corporation and is currently China’s largest manufacturer of both desktop and notebook personal computers. These computers are highly recognizable in the United States, and are sold at such popular technology retail sites as Best Buy and Circuit City. As of July 2009, Lenovo held approximately 29% of China’s PC market. But this influence in the technology industry extends outside of China’s borders. As the fourth largest seller of PCs in the world, Lenovo competes with American companies like Hewlett Packard and Dell. Its combined sales for the fiscal year ending March, 2009 totaled $14, 901 million, showing an 8.9% growth in sales.
Lenovo has been manufacturing quality computers since the 1980s. Formerly known as “Legend”, it introduced its very first self-branded “Legend PC” to the market in 1990. In the mid 1990s, Legend was listed on the Hong Kong Stock Exchange. In 1996, approximately a decade after its inception, Legend became the market share leader in China. In 2005, Lenovo acquired IBM’s Personal Computing Division for $1.75 million. According to IBM’s website, this agreement was a marketing alliance in which Lenovo “receive[s] sales and marketing support from IBM” in exchange for its products being “integrated into IBM Global Services offerings”. This agreement gives Lenovo permission to sell IBM PCs until sometime this year. Not content with solely being a PC distributor, Lenovo issued a statement of intent to purchase Lenovo Mobile Communication Technology, a company that ranks third in China’s mobile handset market. This purchase will further expand Lenovo’s sphere of influence; not only will it be one of the largest PC sellers in the world, but it will also provide a significant amount of mo-bile phones to consumers.
The TCL Corporation is another large-scale Chinese technology company. It is an electronics manufacturer that began selling its products overseas in the 2000s. It is China’s main manufacturer of cell phones and televisions. TLC also makes household appliances, personal computers, and other technological goods, but its focus lies with the two former mentioned products. Today, these products are sold in over 40 countries, under four different brand names: TCL, RCA, Thomson and Alcatel. Its main competitors in the global market include Nokia and Haier.
Established in the 1980s, the TCL Corporation spent its time manufacturing consumer electronics such as telephones and cassette tapes during this decade. With its successful launch of a self-branded big screen color TV, the TCL brand’s popularity grew throughout mainland China and Hong Kong. In the 1990s, the TCL Corporation ex-tended its product list by creating “TCL International Electrical Appliance Co.”, “TCL Electronics” and “TCL Telecommunication Equipment Co.” With the creation of these extensions of the TCL brand, the corporation quickly expanded its influence in China, and around the world. Tin 2002, the TCL Corporation was ranked number 6 among the ‘most valuable brands in China’. Its cellular phones sales are the 3rd largest in the China market (competing against international brands, as well).
In quarters one through three of 2009, the TCL Corporation’s gross profit totaled $3,617 million. This was up from $2,987 million in the previous year. The corporation has been steadily growing in the past decade. According to its website, its global market share of LCD televisions was 8th largest in the world in 2008, as compared to 13th in the previous year. Both statistics point to the TCL Corporation’s steady growth in global influence.
The Shanghai Electric Group is a government-owned corporation based in Shanghai. As China’s largest electrical and mechanical equipment manufacturer, this corporation produces power for much of the country. According to its website, its most popular products include: elevators and air-conditioning units. In producing these products, the Shanghai Electric Group hopes to increase its global competitiveness and influence. Shanghai Electric Group’s mission statement includes three major strategies to create a world-recognizable brand include: “core business concentration, self-mastered innovation, global resource consolidation”. It has a very long history that dates back to one of its subsidiaries being established in 1880. However, the company has existed as a state owned enterprise since 1949 and has achieved a number of breakthroughs in its field since this time. This growth and Shanghai Electric Group’s positive credibility (that comes from time in the industry) allows it to retain an influential role in its industry. In the fiscal year ending December 2008, the Shanghai Electric Group’s sales totaled $8,594.5 million. As compared to the previous year, this was an 11.4% growth. In sales of specific products like fire-powered generating equipment, the Shanghai Electric Group holds a 30% market share. However, this has been a drop from previous years.
Chinese technology companies seem to exhibit great strength in terms of market share, and the three companies profiled in this article also show strong (and steadily growing) sales numbers. It seems as if the “Tech Dragon” does pose somewhat of a threat to other technology companies around the world.
