Chen: It's true that there are barriers for IT companies like BenQ to overcome when expanding to the consumer electronics market. Samsung Electronics Co is one of the few that has successfully expanded from the IT sector to the consumer electronics area. To achieve that goal, we need to develop a distributing network including after-sales service, and that is expected to take time for any progress to be made. Home appliance makers have long developed a distributing network which provides consumers with a convenient way to fix any problem they could have. For that convenience, consumers may still prefer buying TVs from home appliance brands such as Taitung (
So, what we are doing now is outsourcing the maintenance work to get faster services for our customers and to keep costs down at the same time. They are doing quite well, actually, although they are not doing the job for the name of BenQ. It [outsourcing maintenance jobs] will not be a long-term strategy as long as BenQ is focusing on its own-branded products. We'll continue to pursue a better solution to this problem.
TT: Is it difficult to change consumers' deeply-rooted buying habits?
Chen: People usually go and buy a TV set from the familiar home appliance brands' dealers in the neighborhood, rather than go to the bigger consumer electronics chain stores, or the so-called 3C [computers, communications and consumer electronics] stores. Targeting the potential elite buyers, we have our LCD TVs shelved in 3C chain stores in northern Taiwan.
I strongly believe those 3C chains -- with transparent price tags and more choices for products -- will replace the traditional distributing outlets managed by home appliance makers. Just look at what 7-Eleven convenience stores did to the traditional mom-and-pop stores. I believe the expansion of those 3C chains will outpace the demand for flat-screen TVs. Such replacement will occur within the next five years.
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