But after quietly entering the country with its mobile phones, BenQ is now aggressively moving in. In an interview with Business Standard, BenQ Chairman and CEO K Y Lee who was in India on a quick visit stressed the importance of India in BenQ's global strategy. Excerpts:
BenQ has been a late comer in the Indian market. Has that been a problem, especially since established companies are already here?
We got into this market only three and a half years ago. Our Indian office is two years old. So we have no choice about being late.
But it is never too late for a company to start in a country. We are targeting the young.
You entered India with mobile phones. When will you bring your large array of products to India?
We started with mobile phones as this is a booming market in India. This has helped us establish our brand. Now we are getting into the IT market and will offer consumers LCD display monitors, projectors, DVD writers and laptops "� all products in which we are strong players globally.
Our aim is to be the number one in LCD display monitors by 2008. So were does India fit into BenQ's global strategy? Will the Indian market offer you significant revenues?
Europe is largest market for us, followed by China, Hong Kong and Taiwan combined as the second largest. Asia is number three but it is growing very fast and the information technology spending is also growing.
In five years I expect the Indian market to be of similar size of what China is today for us. China and Taiwan together contribute 30 per cent of our revenues.
Five years down the line, India will contribute a minimum of 5 per cent of our revenues and will be among our top 10 markets in the globe.
The Koreans have invested heavily in the country in setting up manufacturing plants (Samsung and LG). But you seem to be wary about putting money into India. Is this due to a difference in strategic thinking?
Most of the Korean companies' investments in India have been made to produce home appliances. These are heavy products and you have no choice but to produce them locally. We make digital electronics products and these are small. So I don't think we are at a disadvantage vis a vis the Koreans. Of course, they have been here for a longer time and have a more mature team "� that is what we are building.
We have no plans to manufacture (products) today but we will keep on watching the situation.
Every mobile company, from Nokia to LG, is setting up a manufacturing base for phones in India. Won't they have a cost advantage over you?
For digital products, you need to source components globally. We have manufacturing plants in China, Taiwan, and Malaysia and are looking at eastern Europe.
We don't think manufacturing in a country is that critical anymore. I was talking to one of our partners and it said that with tariffs in India falling it found no incentive to manufacture PCs in India anymore.
That is because the key components have to come from overseas anyway. Of course, if India develops a strong component base it could be a very competitive destination to manufacture.
Do you plan to leverage India's software outsourcing potential for your products?
We have already set up an India technology centre for software development. This is the sixth such R&D centre for us globally.
We hope to hire hundreds of engineers for this centre within the next two years. BenQ has also got offers from Indian IC design centres for collaboration and we are looking at that possibility as well.
How do manufacturing costs in Taiwan and China compare? Is there a stigma attached to Made in Taiwan products? Are they seen as cheap products?
Taiwan is not cheap anymore. So we have shifted a lot of our manufacturing to China, Malaysia and Mexico. India definitely has a significant labour cost advantage over other countries but labour cost is not a significant cost in digital products, our mainstay.
Today Taiwan has similar standard of quality as Korea. I don't see any problem at all in the acceptance of Taiwanese brands.
In fact, today Asian brands are emerging and are getting accepted globally as representing good quality products. Also, Taiwan is not a low-tech destination.
Taipei is a bustling 24 hours city "� the freeway in Taipei has traffic jams even at 11 pm and we have a lot of 24-hour bookstore as no one wants to sleep.
