KONKA (SZSE: 000016), a leading Chinese home appliance company, held an unveiling ceremony at the Four Seasons Hotel Cairo, Egypt earlier this month. The company announced the establishment of a joint venture with HOHO, an Egyptian local electrical appliance company, marking that KONKA is further opening up the African market. Prior to that, KONKA already joined hands with JUMIA, the largest e-commerce platform in Africa, and enjoyed a good reputation in the local markets.
As a populous country in the Middle East and Africa, Egypt ranks on the forefront of the region in terms of GDP growth rate, with a high demand for color TV products. According to statistics, the capacity growth of Egyptian domestic color TV market and the capacity of its radiation market in the Middle East and Africa market has exceeded 20 million units per year. This fast-growing market demand and low labor costs have drawn the attention of many Chinese home appliance companies.
Different from the traditional simple trade form, KONKA adopted an altogether new strategy of brand localization operation to develop African market. It aims to realize the differentiated layout of the market and channels by establishing a local supply chain system. Industry insiders point out that China’s color TV industry is facing a critical period of transformation, and the trade form employed by KONKA is expected to become a reference for expanding overseas operations.
According to Chang Dong, Assistant President of KONKA Group Co., Ltd and President of KONKA Electronic Technology Co., Ltd., the joint venture company is now capable of manufacturing more than 50% of featured products locally. To be in line with the operation and market development, the company will increase its production capacity in the future, deploy more lines for home appliance business, and further expand its business to the markets in the Middle East, Africa, and Euro-American region.
Last year, KONKA released its new strategy of transformation, covering multiple emerging industries, in the hope to become a global platform-based company. Undoubtedly, home appliances are still the main focus of its development, with expanding overseas markets being one of its moves.