‘Vestel is fearless in its pursuit for growth’
In his first interview since taking over as managing director of Vestel UK, Matthew Lang tells us about the company’s plans for the Toshiba TV business and Sharp Home Appliances and why the Internet of Things is a game-changer
Over the past two years, Turkish OEM and ODM giant Vestel has diversified its business and launched into the branded, consumer product sector with not one, but two pan-European licensing agreements. It’s rolled out an extensive range of home appliances under the Sharp name, and recently embarked on a TV brand licensing partnership with Toshiba.
Matthew Lang was appointed managing director of Vestel in July 2016. Based at the company’s new brand licensing headquarters in Langley, Berkshire, Mr Lang’s previous positions include several senior international roles at Sony.
In his first interview since joining Vestel, he talks about his plans and long-term ambitions for the company.
Q: Can you give us some background on why Vestel has decided to enter into a brand licensing agreement with Toshiba?
Matthew Lang: Vestel and Toshiba have been successfully working together for over a decade now.
As Toshiba’s go-to manufacturing partner, we have been able to develop a formidable relationship with the brand, helping to produce the TVs that made Toshiba a household name. This brand licensing partnership is simply an extension of what has already proven to be a brilliant collaboration.
We’re combining our strengths and our efficiencies, pairing together Toshiba’s design and engineering capabilities with Vestel’s colossal manufacturing might and expertise.
While building on Toshiba’s incredible brand heritage and reputation, we will be leveraging our own expansive supply chain to create a greater range of commercial opportunities.
To extend Vestel’s reach across the market, we’ve taken a natural next step in our relationship with Toshiba. The upshot is that we now have the brand credibility to generate higher-margin sales opportunities with more premium TV designs, including our big-screen UHD and smart models.
Q: How do you begin to go about rebuilding the Toshiba brand, especially in such challenging times for the TV sector?
ML: With this licensing arrangement, we not only intend to return the brand to form, but also to build upon Toshiba’s past success. Yes, the TV sector might be tough, but the reality is that it is precisely because it is so challenging that there now lies a perfect opportunity for Toshiba. The top of the market may be monopolised by two or three brands, and the entry level is dangerously close to saturation, but in the middle, there is a gap – a position that Toshiba is designed to fill.
The depletion in number of mid-tier brands will enable us to play on exactly what Toshiba is known for – top tech at affordable prices from a reputable brand.
As well as using our manufacturing scope and scale to drive down production costs and offer the incredible value for which Toshiba owes much of its original mid-market success, we will be investing in smart marketing to build upon the brand’s position.
Drawing on my own brand experience, I’ll be driving marketing initiatives that can deliver real return on investment. Rather than spend time and resources on generic, above-the-line campaigns, we’ll take a more targeted approach, combining our resources with the power and the reach of strong retail partners, so that we can create genuinely compelling trade promotions.
‘Yes, the TV sector might be tough, but the reality is that it is precisely because it is so challenging that there now lies a perfect opportunity for Toshiba’
Q: Which retail channels do you think will be most critical for Toshiba?
ML: National mass-market chains will be very important to our distribution strategy, giving us the opportunity to achieve both volume- and value-driven sales.
We also see opportunity in the high street via independent retailers, where we can work with partners to display and demonstrate our premium TV technologies in-store.
However, although we’re open to all business opportunities, we will be strategic, focused and selective when it comes to choosing the right retail partners. Our success depends upon correctly positioning and marketing the brand, so that we can continue to trade and build on Toshiba’s name and heritage.
Q: With Sharp and Toshiba, Vestel now has two pan-European brand licences. How can these be run successfully alongside Vestel’s ODM business?
ML: In addition to building shared platforms of expertise for product management, operations and finance, we will be developing separate, brand-conscious, sales teams for both Sharp Home Appliances and Toshiba.
The technologies and the design of our Sharp and Toshiba ranges will also remain distinct, bearing all the hallmarks of their own separate brand identities. We are closely collaborating with the Japanese engineering teams of both Sharp and Toshiba, not only to build on existing designs, but also to develop new and exciting technologies that can move the brands forward.
Q: Long term, what impact are both brand licensing deals likely to have on Vestel ODM? Are we seeing a shift away from ODM in favour of a branded approach to business?
ML: Vestel remains committed to its ODM business. The creation of such a strong portfolio of brands should by no means be taken as a sign that we will be scaling back our plans to develop and extend our lead in the ODM market. Quite the opposite, in fact.
Integral to the development of a more profitable and self-sufficient overall business, the acquisition of our brand licences will actually have a positive knock-on effect on Vestel’s ODM division.
The higher-quality Japanese technologies developed for Sharp and Toshiba’s specific use will eventually be integrated into our ODM line-ups, enabling us to differentiate and add value to these ranges.
Q: Historically, Vestel has always been considered a TV producer. With the Sharp brand licensing deal up and running, how is this now changing? What retail channels are you targeting for the future growth of the brand?
ML: Vestel’s fast and meteoric rise to the top of the global AV market is what first put us on the map and it has consequently defined how the electronics industry perceives us. However, in recent years, we’ve actually grown and metamorphosed into a far larger enterprise. Vestel has made enormous strides in the ODM white-goods sector, achieving sales of over €300 million and becoming a branded front-runner in Turkey itself.
With the roll-out of Sharp Home Appliances across Europe, we now have the opportunity to showcase this incredible technological progress. We have been building up and investing in our R&D, as well as our production facilities since 2002.
The development of our own consumer-facing brand across Europe will give us the right channel to show the full extent of our manufacturing power.
Few will be aware of the scope and scale of our premium home-appliance ODM business or our heavy investment in the design and development of complete built-in ranges.
For Sharp Home Appliances, our strategy is clear. Having successfully launched into the major domestic appliance market, building traction with the largest national, mass-market electrical chains and superstores, we will now be targeting kitchen specialists over the course of the next 12 to 18 months. Closer to Europe than most other major manufacturers, we’re in touch with the trends that are defining kitchen design, having the resource required to bring them to market first.
‘Vestel remains committed to its ODM business. The creation of such a strong portfolio of brands should by no means be taken as a sign that we will be scaling back on our plans to develop and extend our lead in the ODM market’
Q: Will Vestel itself ever become a consumer-facing brand?
ML: Already a household name in Turkey and some parts of the Middle East, Vestel has huge potential as a consumer-facing brand in Europe. We’re entirely open to the use of the Vestel name and are actually currently exploring this possibility for some product categories.
Q: Vestel is diversifying, but what areas for growth are you looking at?
ML: What makes Vestel such an exciting company to work for is that it’s fearless in its pursuit of new avenues for growth. With Turkish government backing, it has the support to realise its limitless potential, making the investment and changes required to attack new markets. Our immediate focus is the development of our IoT and smartphone businesses.
Smart technology is a game-changer, offering us the opportunity to power life at home with expansive, convenience-driven ranges that encompass multiple product categories. We’re already selling smart home appliances and now plan to expand this line-up with countless new products including electrical car chargers.
Q: What about the UK electrical market? Will Brexit help or hinder your plans?
ML: In the short term, Brexit has certainly complicated business, weakening the pound and making imports more expensive. So far, there has been no obvious slump in retail sales, but I guess the true test when it comes to consumer confidence will be when these price increases actually start to hit home. In any case, whatever impact Brexit does ultimately have, we’ll adapt and push forward. It’s our agility and speed of response that have defined our success. And it’s this very same fast-paced and flexible approach that will enable us to acclimatise to any new set of socio-economic conditions.
Q: What is your vision for Vestel?
ML: As with any business, success will be measured in terms of our growth and profitability. For me, this kind of progress can only be made with the set-up of high performing teams and efficient platforms.
Fostering a commercial culture across every area of the business will also be key if we are to keep our competitive edge. Meticulous management will be equally important. If you’re to maximise efficiencies and catch any potential challenges early on, then you need to keep a close eye on everyday trading decisions.
Of course, critically, we will need to stay on-trend when it comes to the design and build of all our products. While we’ll be guided by consumer and market research, we’ll also liaise with our customers to ensure that we create competitively positioned product ranges that have specific appeal for their end consumers.
For us, it’s not only about offering the product of choice. It’s about becoming the customer partner of choice, too.
Q: How does your role at Vestel compare with working for Sony?
ML: Working for Vestel is every bit as demanding as working for a company like Sony. The challenges might change, but, ultimately, you still have to negotiate and collaborate with many different and often competing factions. You have to be culturally adept. At Vestel, I’m managing sales teams from all across Europe, while also liaising with the Japanese teams for both the Sharp and Toshiba brands. I’m also spending a lot of time in Turkey – an experience that’s taking me back to the six years that I lived there.
Q: Is there anything that you’re learning from working at Vestel?
ML: Vestel has certainly opened my eyes to a whole new commercial approach. A forward-facing company, it has broken the mould, flatly rejecting the old ways of doing business if they don’t make any commercial sense.
The company owes its incredible success to the development of its own efficiencies, its own fast-paced business model. Refusing to be bound by any inflexible processes, we have the power to react quickly to market conditions. I am seeing first-hand how this flexibility and speed of response can still work within a cohesive and highly-organised business structure.
