| BUSINESSWEEK ONLINE : NOVEMBER 29, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
The Deal Makes Konka's Picture Much Brighter (int'l edition) Konka Group, China's No. 2 maker of TV sets, is on a bold mission. ''We are already a famous brand in China, but we are not content with that,'' says Chen Weirong, general manager of the Shenzhen manufacturer. ''Our goal is to be a global brand.'' In his drive to make Konka as well known as Sony or Samsung, the 40-year-old Chen sees no better place for the government-owned company to start than U.S. living rooms. How well Chen does with U.S. consumers will say a lot about China's ability to adapt to a global free-trade regime. With China entering the World Trade Organization, its state sector will face shocking new competition at home. But for the well-managed Konkas of China, WTO membership may not only open export markets but turn the companies into global players. Even before the WTO deal, Chen was confident that Konka could crack the U.S. market. The company started exporting 19-inch analog TVs to the U.S. a year ago and has since added flat-screen 27-inch sets, comparable to the Sony Vega, that start at $699 and come in distinctive colors, including pink and blue. Overall, Konka expects to sell 250,000 TVs in the U.S. this year, equal to 1% of the market, says Wendy Wu, executive vice-president of Konka USA. Thinking bigger, the company has opened a research and development center in San Jose, Calif., for high-definition TVs and is building a $10 million factory in Tijuana, Mexico, to produce them. The plant will have a capacity of 300,000 HDTVs when it opens early next year. Its first model will be a 30-inch set, selling for $3,499, slightly less than its Japanese rivals. Overall, the company wants 3% of the U.S. market next year. Investors seem to like what Chen has done at Konka, which earned $25 million on sales of $430 million in 1999's first six months. The stock price for its ''B'' shares, which foreigners can trade, is up 60% this year. To survive in China's intensely competitive TV market, Konka has put an emphasis on new products, such as a 14-inch portable TV for kids. Priced at $150, it comes in a clear casing with pastel trim, a la Apple Computer Inc.'s iMac. WTO entry is not uniformly good news for Konka. It has benefited from preferential government policies, on everything from bank loans to its cell-phone venture with Lucent Technologies Inc. With China joining the WTO, such treatment may be harder to come by. But if Chen succeeds in getting his TV sets into American living rooms, Konka may not need the help. By Bruce Einhorn in Shenzhen, with Sheri Prasso in New York _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS China: Open for Business (int'l edition) ASIAN COVER IMAGE: China's Opening TABLE: Worth the Wait? A Flash Flood of Japanese Goods? (int'l edition) The Deal Makes Konka's Picture Much Brighter (int'l edition) Commentary: How Beijing Can Learn from Its Neighbors' Blunders (int'l edition) Plus: Video: A WTO Deal at Last BW Asia Editor Sheri Prasso examines the agreements details INTERACT E-Mail to Business Week Online | |||
