A technology breakthrough, ultra light-emitting diode, is boosting company's outlook

Hisense Electronics Co Ltd, China's largest TV maker by market share, is banking on more investments in innovation and smart factories to gain an advantage over global rivals such as Sony Corp and LG Corp.

To achieve its goal, Hisense has formed an expert team of researchers from Japan and South Korea to update its TV technologies. It also plans huge investments for its smart factory to increase productivity.

An employee at a Hisense factory in South Africa. The company also has manufacturing operations in Algeria and Egypt. Provided to China Daily

"Advanced technology is the key to business success no matter how the market is changing," says Zhou Houjian, the company's chairman.

In 2011, many TV manufacturers from Japan and South Korea launched models of organic light-emitting diode TVs, which are thinner and lighter, posing challenges to Chinese TV makers.

Cao Jianwei, deputy general manager of the Qingdao-based TV maker, says that once the OLED technology was widely used in the TV industry, the Chinese market would be dominated by foreign competitors, leaving no room for domestic TV producers.

"We had no choice but to compete with them and upgrade our technology with better products," he says.

Hisense's years of effort paid off this year, with a breakthrough made in a new technology called ultra light-emitting diode, which features a high degree of color accuracy and wide viewing angles. It is also an environmentally friendly technology.

"ULED is better than any current technology, and its contrast ratio can reach a million-level scale while the old technology is only a thousand-level," says Cao.

For Hisense, innovation is not only something that helps the company stand out in the competition at home, but has also brought international recognition.

Its products have been sold directly to North American retailers such as HH Gregg's parent, Gregg Appliances Inc, Best Buy Co, Wal-Mart Stores Inc, Costco Wholesale Corp, and Canadian Tire Corp through online sales.

In 2014, the company's export value rose to $2.6 billion, and the value of products with its own brand Hisense achieved 18-fold growth in seven years, the company said.

Despite the decline in China's exports of televisions, Hisense reaped an 18 percent growth in exports in the first two months of this year.

The company, which also produces refrigerators and airconditioners, has sped up efforts to grow in key overseas markets including Africa, the United States and Europe.

"Currently our business growth is mainly boosted by the domestic market, but in the long run, Hisense's development lies beyond China, so we need to keep exploring the foreign market," says Zhou, the chairman.

For most Chinese companies, entering established markets like those in the US is proving a challenge. But the company is progressing in the goal.

To make that happen, Cao says that the company needs to produce the best products and react quickly to the market.

Hisense is converting from being a follower of Western technology to one that is guided by innovation and leadership.

The company plans to invest 200 million to 300 million yuan ($32 million to $48 million) every year in a smart factory that it built last year to boost production and efficiency.

More than 1,000 robots will be used in the factory to replace human workers this year, the company said.

"It will help enhance our competitiveness in the global market," Cao says, adding that the annual output has increased from 8 million to 11.1 million thanks to this new type of manufacturing intelligence in the smart factory.

With about 70,000 employees worldwide, Hisense has manufacturing operations in South Africa, Algeria and Egypt, with sales offices in the US, Europe, Australia, the Middle East and Southeast Asia. Hisense products are available in more than 130 countries and regions.

Contact the writers at xiechuanjiao@chinadaily.com.cn and lvchang@chinadaily.com.cn

(China Daily Africa Weekly 06/05/2015 page21)