How many stormy waves must a Chinese company navigate to embrace globalization?

To answer this question, one cannot avoid mentioning TCL.

On September 6, the 2024 Internationale Funkausstellung (IFA) Consumer Electronics Fair in Berlin, Germany, opened its doors, with top global electronic brands competing on the same stage.

The IFA, which has a century-long history, is like a condensed history of human technological development.

From radios, phonographs to the first "television receivers" to remote controls, video cassette recorders, HDTV, TV satellites, to consumer electronics, smart homes, smart wearable devices, and more, all kinds of cutting-edge technologies and innovative products have led the trend on the IFA stage.

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TCL, which has been participating in IFA for 14 consecutive years, this year "booked" a total exhibition area of 2,662 square meters, setting a new historical record.

Through its two main entities, TCL Industrial and TCL Technology, it showcased three major industries: smart terminals, semiconductor displays, and new energy photovoltaics.

For example, the world's largest 115-inch QD-Mini LED high-end TV with tens of thousands of backlighting zones.

In addition, there is the world's first 57-inch 8K curved MLED gaming display and the world's largest G12 photovoltaic monocrystalline silicon wafers, among others.

Many of these products have been tested by users in the global market.

For instance, at the beginning of this year, a tech blogger named Linus went to great lengths to "smuggle" a 115-inch TV from China to the United States, filmed an unboxing experience video, and posted it on his YouTube channel, which has garnered over 8 million views.

This 115-inch seamless QD-Mini LED TV, the largest in the world, is from TCL, and its price is significantly lower than that of a similar-sized 110-inch Micro LED TV from other brands, causing American netizens to exclaim "crazy."

Similar user experiences happen every day in every corner of the world.

In 2023, TCL's TV sales reached 25.26 million units, ranking second in the world, and in the first half of 2024, its shipments in the European market increased by 40.1% year-on-year.

In 2023, TCL's Huaxing gaming panel market share remained the world's first, and TCL Zhonghuan photovoltaic crystal wafer market share also remained the world's first.

Today, people are accustomed to seeing TCL active on the global stage.

However, many people have not yet realized that all of this actually began with a bold "going out": in 2004, TCL acquired the color TV business of French Thomson, completing the first "feat" of a Chinese company's merger with a "Fortune 500" company.

Subsequently, TCL became the world's top-selling color TV, but soon suffered a sharp decline in performance, experiencing a "Waterloo" in its business.

Some business schools even regarded this international merger as a "failed" case.

However, looking back on this historical process from another angle 20 years later, its long-term value has fully emerged.

Steve Jobs, the founder of Apple, once said that one cannot see the future from the present point, only by looking back can one see the whole picture.

"Most of the things I did out of curiosity and intuition turned out to be invaluable."

In fact, without the "struggle" to face globalization 20 years ago, there might not be a TCL today.

In the past two years, many business schools have gradually realized this and have re-examined this case.

However, the story of TCL and its subsequent evolutionary path is far from over.

In the "blood and fire" journey of Chinese companies' globalization, it will continue to be re-evaluated, bringing new inspiration to people.

In 2004, TCL Group, which had just gone public, successively acquired the color TV business of French Thomson and the mobile phone business of Alcatel.

Both companies were giant players in the global business world at that time.

Thomson even had a 12% share of the American market and an 8% share of the European market, an absolute industry giant.

This cross-border merger directly transformed TCL from a company mainly focused on the Chinese market to a global player, making it the world's largest color TV manufacturer.

However, the synergistic effects brought by the cross-border integration as imagined did not appear as expected, but instead led TCL into unexpected losses.

Looking back now, the reasons for the losses are complex.

For example, the difficulties of the merger were underestimated, and cross-cultural conflicts, among other issues.

But the most unforgettable lesson for Li Dongsheng and TCL was the decisive impact brought by technological iteration.

The timing of this merger coincided with the transition from CRT cathode-ray tubes to LCD flat panels.

TCL greatly underestimated the speed of the new and old technology transition, thinking it would take 5 to 10 years to complete the replacement, but in reality, it only took 3 years.

In such a period of drastic technological change, TCL's advantages in CRT and rear projection technologies were nullified, leading to huge losses for two consecutive years, on the brink of life and death.

At the critical moment, Li Dongsheng led TCL to conduct a deep reflection, and he personally wrote "The Rebirth of the Eagle," encouraging everyone to overcome difficulties together.

It was not until 2007 that TCL gradually emerged from the trough.

Just after emerging from the storm, someone asked Li Dongsheng if he would still choose this international merger project if he had the chance to do it again.

His answer was: "Definitely.

But if I had the opportunity to do it again, we would do it better than now!"

This is because globalization is the inevitable path for Chinese companies.

After China joined the WTO in 2001, the domestic and international markets for the electronics industry quickly unified, and Chinese companies inevitably faced global competition.

Li Dongsheng said, "This strong sense of crisis drives me to go out and open up markets overseas.

Only by combining internal and external operations can we establish an advantage in the future competition of economic globalization."

The international merger 20 years ago made TCL experience a cycle of life and death, but looking at it from another perspective, globalization itself is not a problem.

The "failure" of the merger brought insights to TCL, which played a key role in its subsequent transformation and upgrading process.

First, TCL, which was the first to enter the mainstream markets of Europe and America, quickly completed the layout of global operations, laying the foundation for further in-depth local operations.

The extreme importance of this matter has always been greatly underestimated.

In fact, for Chinese brands, it is extremely difficult to enter the mainstream markets of the United States and Europe.

TCL took the lead in taking root in the European and American markets through the merger of Thomson's color TV business, taking the lead in achieving local production and management, creating taxes and employment, and "embedding" into local society.

For example, the TCL manufacturing base in Poland was originally taken over from Thomson.

After years of development, the factory's annual production capacity has exceeded 5 million units.

On average, a TV comes off the production line every 5 seconds, and the products can be delivered to all European countries within 3 days.

The factory creates substantial taxes for Poland every year, and the stability of local employees is also very high.

The Mexican manufacturing base MASA factory is similar, which was acquired from Thomson at that time.

MASA factory is located in Ciudad Juarez, adjacent to the Texas city of El Paso in the United States, where it mainly assembles large-screen TVs of 65 inches and above, supplying the American market.

With the expansion of production capacity, TCL's market share in the United States has gradually increased to the second position.

At present, TCL has established 46 R&D centers and 33 manufacturing bases in countries such as Vietnam, Mexico, and Poland through its two main entities, TCL Industrial and TCL Technology, and its sales organizations are spread across more than 160 countries and regions.

With the rise of "anti-globalization" trends in recent years and the rise of market protectionism in various countries, such experience and layout are increasingly highlighting great practical value.

It not only helps TCL break through tariff barriers but also forms a strong community of interests due to local factories, local employment, and local taxation, with strong resilience.

In recent years, the global macro environment has continued to change, and TCL's production and business have not been greatly affected, mainly because globalization and localization are well combined.

Globalization is localization, which is a profound experience of TCL's deep cultivation in Europe and America over the past 20 years.

Such a far-reaching layout would be much more difficult without the foundation formed by the Thomson merger, with greater variables, longer time.

The more profound value of technological breakthroughs lies in the fact that this international merger provided solid market support and necessary technical knowledge for TCL to make up its mind to enter the upstream higher-end fields and establish TCL Huaxing.

It is precisely with TCL Huaxing that TCL has truly systematically improved its technical capabilities, from a terminal electronic product manufacturer based on cost efficiency and marketing to a technology-driven manufacturing company.

It should be noted that one of the important reasons for acquiring Thomson's color TV business was TCL's focus on its strong technical accumulation, including 34,000 patents in color TVs, color tubes, and display technologies.

However, in the face of the rapid technological iteration wave, the original technical path and accumulation quickly turned into nothing.

The replacement of CRT by LCD dealt a heavy blow to Li Dongsheng, but it also strengthened TCL's determination to enter the upstream core component industry.

Li Dongsheng once summarized that without the two major mergers, there would be no big pattern of TCL's accelerated globalization, nor the foundation for developing the semiconductor display industry, which is the biggest strategic value brought by the merger.

In 2009, Li Dongsheng made a decision, against all odds, to launch the TCL Huaxing project.

The project invested 24.5 billion, equivalent to the total asset scale of TCL, and went straight to the 8.5th generation line of the LCD industry, relying on its own team and independent construction, which was extremely difficult.

If it is not successful, then it will be a failure.

At this time, the global market share obtained through international mergers and acquisitions has become a key "trump card" in TCL's hands.

Li Dongsheng judged that TCL Huaxing had a 70% chance of winning this battle because "TCL's color TV sales could digest the capacity of an 8.5th generation LCD factory, and the market risk is controllable."

In other words, even if TCL Huaxing had no customers to pay, just the orders of TCL could survive.

In fact, TCL Huaxing achieved production and profit in the same year, which can be called a "miracle.

"Li Dongsheng stated in an interview with Caijing that after founding TCL CSOT, he realized that only by delving into high-tech, capital-intensive, and long-cycle industries can one cultivate core technological capabilities.

Such capabilities cannot be obtained merely through investment; they must be honed gradually in fierce market competition.

"The success of TCL CSOT has propelled TCL's terminal business to break away from the model that solely relies on cost-efficiency competition, adding a new engine driven by technology."

After fully mastering LCD and forming a global leading competitiveness, TCL has been forging ahead on the path of technological breakthroughs, overcoming all obstacles.

Especially in the industrialization process of Mini LED technology, significant breakthroughs have been achieved, defining the current mainstream display route.

Exploring the printing OLED technology route, it has taken on the mission of the Chinese display industry facing the impact of technological iteration.

TCL's Industrial Research Institute began theoretical research on Mini LED technology as early as 2006.

In 2014, it officially started the development of applied landing.

In 2016, the phased result, the X1 product, was launched.

In 2019, TCL introduced the world's first Mini LED TV.

In 2020, TCL captured 90% of global sales of Mini LED products, securing a leading position in global display technology.

In the exploration of OLED display technology, TCL CSOT has taken a unique path by pioneering the printing OLED production process.

Compared to the mainstream evaporation process with less than 30% material utilization, printing OLED can increase the material utilization rate to over 90%, while also reducing production costs.

This exploration has no precedent worldwide.

TCL's exploration of printing OLED is also of profound significance to the Chinese display industry.

Li Dongsheng proposed that "in the future, panels will be produced like printing newspapers."

Standing on the eve of another display technology iteration, TCL is no longer in the position of a follower but has taken on the role of a leader, delving into the uncharted territory of display technology.

No one can predict the future of technological change, but TCL, having experienced setbacks in international mergers and acquisitions, has a deeper understanding of global technological iteration, thereby strengthening the direction of technological innovation and industrial upgrading.

Reassessing value at the 100-year event of Berlin IFA, TCL fully demonstrated its comprehensive technological innovation strength, with a level of globalization beyond many people's imagination.

Since entering Vietnam in 1999, TCL has been going global for 25 years, serving more than 960 million users.

From 2018 to the present, TCL's color TV sales have ranked second in the world, with overseas market sales accounting for 2/3, and both revenue and profit exceeding domestic levels.

According to GfK data statistics, TCL TV retail volume ranks second in France and Sweden, and third in Spain and the Czech Republic.

To understand the past and present of TCL's globalization, one must use a historical perspective and a long-term value yardstick.

The leap into the ocean 20 years ago, struggling to learn "swimming," has brought TCL deep-seated global genes.

As Li Dongsheng said, "We almost became martyrs, but we gritted our teeth and held on, and in the end, we became pioneers"; "After going through hardships, our project has been successful."

History is the best teacher, but history often needs to go through the trials of time to be seen more clearly.

After all, the exploration of pioneers is priceless; they waded through deep and shallow waters, feeling their way across the river, and obtained experiences and lessons that Chinese companies cannot buy with money.

TCL's success has emboldened more Chinese companies to dare to dream of "being number one in the world," moving towards globalization with higher benchmarks.

Today, the globalization of Chinese companies is a must-answer question; if you don't go global, you're out.

You can't learn to swim while standing on the shore; if you want to go global, it's impossible not to "choke on water."

Reassessing the international mergers and acquisitions of the past, it can be seen that TCL's 20-year journey of globalization has proven a hard truth: only by bravely "jumping into the water" and experiencing the stormy waves can one possibly create their own era of great navigation.