Huang Ruiren was very happy when he saw the reporter's voice recording with the words Philips. Goodchoice. The CEO of the Greater China Life Department of Philips' Quality Life Department hopes that the products will run through most of the time when people go to bed late, and they will achieve the market share first or even the recorder with no advantage.
In the difficult times of Wall Street, the importance of Philips in China is self-evident: 12 of the 22 products of Philips Quality Life are the first in the Chinese market, such as male razors, home audio and juice. Machines; but globally, only five categories occupy the first position in the sales charts.
In the past three years, Philips' annual sales in China have increased by more than 20%. However, when the global economy suffered a recession, Philips China also lowered its growth forecast and set its target for super GDP growth above 8%. Philips China also revealed that Shandong and Sichuan will be the next key breakthrough provinces.
Shandong and Sichuan are pilot projects
In the last quarter, Philips had a net loss of 1.5 billion euros ($1.9 billion), which was its first quarterly loss since 2003, mainly because Philips devalued its assets by 1.3 billion euros ($1.714 billion). At the same time, it announced that in order to speed up the restructuring process, it will start layoffs of 6,000 people in the second half of 2009 and will stop the stock repurchase program.
In the past three years, Philips' annual sales in China have increased by more than 20%, twice the growth rate of China's GDP. However, when the global economy suffered a recession, Philips China also lowered its growth forecast and set its target for this year. Growth, that is, a level above 8%.
However, we are still very confident about China's development. By contrast, China's economic situation is much better than many countries around the world. Philips is not the first time it has encountered an economic crisis. We focus on two points. One is to focus on increasing market share rather than blindly expanding scale. The second is to focus on retail terminals and adopt more promotions to increase single-store sales. Huang Ruiren revealed that while consolidating coastal and first-tier cities, Shandong and Sichuan will be the next key provinces to break through. Philips even customized special commercials for the two provinces. This is a pilot project.
Shandong and Sichuan account for 15% of China's total retail sales, but Philips' Quality Life Division's sales share in the two provinces only accounts for 9% of total national sales, and Philips Lighting is only 8%. Philips Greater China Vice President and Chief Marketing Officer Liang Hanfeng It is revealed that the next firepower point will be placed in the six most important cities in Shandong Province, as well as Chengdu and Chongqing.
Want to fill the shortcomings of color TV in 3 years
Liang Hanfeng said that at present, Philips Quality Life Division has 22 types of products, 12 are already the first in the market, 6 are the second or third in the market, and the TV business is only the top five in the market. Philips' razors cover more than 600 cities across the country, but color TVs cover more than 200 cities. Color TV is an important part of our growth platform.
When domestic manufacturers quickly expand their market share at low prices, Philips still insists on its high-end route. However, Liang Hanfeng said frankly that it will take about three years to make the color TV business a leading brand in China.
At the same time, Liang Hanfeng stressed that Philips had carried out drastic reforms before the economic crisis. Philips is no longer a producer of high-volume electronics and equipment products, but a high-value, total customer solution-centric solution provider.
Since 2002, Philips has sold communications, security and graphics businesses, healthcare product branches, and mobile phone divisions. In May 2007 and January 2008, nearly one-third of the shares of STMicroelectronics were sold, and the rest were planned to be sold in 2010, and there is no direct contact with the semiconductor.
At the same time as the subtraction, Philips has rapidly expanded in vertical business areas such as lighting and medical equipment through a large number of acquisitions. Since December 2005, Philips has made more than 20 acquisitions of large and small, investing more than 10 billion euros.
By January 2008, Philips officially built a three-part structure for quality life and lighting of medical insurance ships. The quality life department was formed by the integration of consumer electronics and small household appliances. It is not easy to successfully integrate two large departments with 2007 sales of 13 billion euros. Huang Ruiren said that the consumer electronics team's strength lies in rapid market response, cost control and strong supply chain management capabilities; while the Small Appliances Division is good at controlling a wide range of products and has a deep understanding of consumers.
Huang Ruiren said that before the merger of consumer electronics and small appliances, the market faced about 500 billion euros. After the merger, the market tripled to 1.40 billion euros. The newly established Quality Life Department has set up four growth platforms for healthy living, personal care, home life and connected experiences. We are also looking for suitable M&A opportunities.
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