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Q&A: Konka, in Partnership-Building Mode

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Konka's U5 Series

Konka North America’s Senior VP, Sales & Marketing, Scott Ramirez, chats with Dealerscope on the progress of the U.S. brand rollout

Dealerscope: In August, when you announced Konka’s U.S. debut after your introduction at CES 2020, you announced three Android TV series – all high-value models with many desirable smart TV features and a few that set the line apart across the board – such as edge-to-edge screen real estate and a free voice remote control. What else can you say about how you are positioning this brand, which enjoys a 40-year company history?

Scott Ramirez: We are just getting started in the U.S., and everything we’re manufacturing so far has been spoken for. Demand is way high. It’s a good problem to be sold out… based on everything that’s going on, especially with panels, supply chain [is challenged]. So we have to sell what we can for this quarter and ramp up the supply chain for next year, hopefully, when the business is also a little more stable [for everyone].

When we decided to bring Konka into the U.S., we looked at what Konka was in China, and their main competitors, and how customers look at it there, and how to bring it into the U.S. We’re a top five brand in China, you know, with our competitors. We’re right next to them on the floor.

In the U.S., those are Tier Two, and we’re excited to be delivering a new level of quality, technology and value in the growing and high-volume Tier Two TV space in the U.S. That’s part of how we’re deciding the brand positioning [vis-à-vis] our key competitors.

In the U.S., consistently, Tier Three is price-based product – not about quality, features or brand names. Then, Tier One, at the other end, is about the product features, quality and brand name. Tier Two are the people who can bring quality product to market but maybe they don’t have the brand name or history [in the U.S.] of Tier Ones.  That fits; that’s where we are right now. Tier Two, it happens, is really the key volume area there is in our business right now.

Not only do Tier Two sales incorporate all Tier Two brands, but that area also spans entry-level products in Tier One.  

And that’s really the meat of the market – it’s the highest value product for the consumer; they’re getting a lot for their money, and way more than a few years ago. If you look at the Tier Two space now, at amazing price points, it is literally the very high end of just a few years ago – QLED, color levels, brightness, wide color gamut, thin bezels – these were all [Tier One] high-end features just a couple of years ago.

It’s a great combination of quality plus technology plus value. We want to stand out in that Tier Two space.

Our U5 series is a noticeably better TV with demonstrable features. These are things you can see when you walk up to the TVs – and at that value price point. With the zero-bezel design, you can see the difference when it sits next to other products at its price point. Our brightness level and wide color gamut really pop. And we added Android TV – and voice remote control, as well as a fourth HDMI input. It’s true high value that resonates with the people we’re selling through this year. These are easy things to talk about [for retailers].

Demand has been great. And we step up from there to our Q7 QLED series, at a great price point. It’s the Tier Two version of QLED with spectacular quality at a great price. We’re giving the mainstream customer more for their money in quality and features. We’re on the right track; we’re doing it.

Dealerscope: Your most recent announcement was about the Nationwide buying group relationship. Is that exclusive for buying groups or are you going to broaden and work with other groups?  Also, the relationship with O’Rourke was announced – what special programs are they making available to their dealer customers relating to Konka?

Ramirez: O’Rourke is our national distributor. We’ve made our direct relationship with Nationwide, and it’s a three-way relationship with us, them and Nationwide.  Nationwide will soon have their first virtual show, and we’ll be there. That being said, demand is amazing. The first month’s goods that were earmarked for the group were sold out before we shipped them. For that type of large independent retailer group, it’s exclusive, but we sell to many of the individual NATM members, and through Amazon; and Conn’s HomePlus is also a key partner for us.

Dealerscope: Full HD, 4K, and QLED models will populate your initial series. Are OLED, 8K and, for the custom installation market, products like ultra-short-throw projection in your developmental plans?  How about Micro LED technology, which we understand Konka has invested in?

Ramirez: Plans for Konka as an organization and plans for the U.S. market will be different. Right now, in China, we sell 8K and OLED, and Micro LED for commercial use, and Mini LED. All of those products from Konka are for sale there. As far as the U.S. market is concerned, we have not yet decided. Right now, we just want to get the supply chain perfected, so that we are able to fulfill the needs of all of our partners, probably expand some of those partners, especially to more selling floors, and then we’ll look at when it makes sense to bring in those other technologies.

We have been building our infrastructure, and it’s working well. What we don’t want to do is rush to do too much too soon. We want to get everything working, with all that mainstream product, which includes QLED, and then once that’s up and running and flowing, we’ll decide what are the next steps to bring in from this palette of products available to us.

And we can take from a menu of Konka’s technologies and features and curate our own lines for the U.S. market. The U5 and Q7 series are not for sale in China, but we have taken [features and technologies] to create these U.S. models.

They have such a broad list of technologies that we looked at for what the needs are for our market… and they’re customized for our market. We’ll continue that as we move forward. 

We’re still targeting those areas where most people are buying. This is our first year, and don’t need to rush to 8K. We’re going to make sure that what we make, we make really well, and that it provides quality and value to the consumer, and just do all the right things with the areas that we chose to attack.

Dealerscope: Any other product categories we haven’t talked about that make sense for the American market that we have not talked about that Konka may be thinking to launch here?  The company has manufacturing expertise including in audio, appliances, smart home products, and mobile.

Ramirez: I don’t want to be too specific. I can say that the second category you’re likely to see would be something in the smart home area. There’s no timing to announce, or the exact product area, till we move closer to launch. But it won’t be that far away.

Dealerscope: Looking beyond the monumental challenges of launching a TV brand in the U.S. this year due to COVID-19, the challenge in 2021, I would guess, would be establishing the brand in a “splashy” way – particularly because you won’t have the huge stage of an in-person CES, at least not next year. How do you plan to bring your brand to the fore in a big way with dealers and consumers, given these very unusual circumstances?

Ramirez: Great question. As far as “splashy,” I’m not sure how anyone can be that now. We’re looking at different things right now. What we’ll do for sure is make sure each partner understands what we’re bringing to market, the value of it, how we’ll promote it and how we’ll work with them, and we’ll look to be a good, long-term partner.

We’re not just trying to sell a box here. We have the [personal] relationships, but now we’re building the relationships with the company. We will use digital as much as we can – in things like training. I just did [a virtual] one with Animoji, to make it a bit more personal and fun. We’re coming up with ways to be unique.  And we are going to continue working on it.