Wed, Dec 08, 2004 - Page 10 News List

BenQ aims to double brand sales

EXPANSION After tripling sales in Europe this year, the company now plans to expand further in South Asia, emphasizing sales of its own-brand products

By Lisa Wang  /  STAFF REPORTER

BenQ Corp (明基電通), a leading Taiwanese consumer electronics vendor, aims to double its own-brand sales next year after muscling into more overseas markets, a company executive said yesterday.

Three years ago, BenQ, which now makes handsets for Motorola Inc and Nokia Ojy, decided to branch into the brand-name business to fend off the shrinking gross margins faced by most local electronics manufacturers.

Most industry peers, however, doubted BenQ would be able to secure outsourcing orders from international vendors.

"Now, BenQ has proved that Taiwanese companies can own a brand. Owning a brand gives us an edge in winning more orders ? Now we're entering a new phase of fast growth," said BenQ chairman Lee Kun-yao (李焜耀) at the company's third anniversary.

BenQ's brand-name business will double from this year, Lee said.

That is, BenQ will have to make US$4 billion from its own-brand business, up from US$2 billion it expects to earn this year.

BenQ has made significant progress in Europe, with sales tripling this year to account for a hefty 40 percent of total sales, according to Lee.

The company is now shifting its focus back to South Asia, where it is a latecomer, Lee said, adding that BenQ will add two new branches in Vietnam and Indonesia in the first quarter of next year, building on current branches in Thailand, India and Singapore.

The expansion will bring the branded business' contribution to well above 40 percent next year. Its contribution exceeded the 40-percent threshold in the current quarter, Lee said.

He declined to reveal the company's overall sales forecast for next year.

By 2008, BenQ aims to have own-brand sales make up half of the company's total sales.

"We are already ahead of that schedule," said Jerry Wang (王文璨), vice president of BenQ's sales operation division.

Take mobile phones, own-branded handsets will make up around 70 percent of BenQ's total handset sales next year, said Irwin Chen (陳盛穩), a BenQ vice president.

Sales growth will be 30 percent year-on-year, Chen said. BenQ is expected to ship 16.8 million cellphones this year.

Despite the upbeat outlook for next year, BenQ said visibility for the first quarter is low, due to concerns over oil prices and the strength of the US dollar.

"As a result, our customers decline to give a long-term perspective, which means they will keep inventory at a low level," Lee said. But, the strategy means they'll be unable to meet demand when it spikes, he added.

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