T C L TA K E S O V E R T H O M S O N 81 By 2003, TCL was shipping 11.5 million televisions. It had cap- tured 18 percent of the market in China, 14 percent in Vietnam, 8 percent in the Philippines, and significant shares in India and Pakistan. 1 Aggressive expansion through mergers and acquisitions had enabled TCL to balance its phenomenal growth with profitabil- ity. It emerged as the only Chinese television manufacturer to be consistently profitable from 1998 to 2003. For the first three quar- ters of 2003, TCL reported profits of $169 million on sales of $4.2 billion. By then, TCL ranked as China's first television and mobile phone producer and its fourth largest electronics company. But TCL wanted more. The company's ambition was to become a "world-class enterprise." Li realized that this was not going to happen unless TCL became a genuinely market-oriented company. In January 2004, to fuel further expansion, TCL announced its A- share listing on the Shenzhen Stock Exchange and raised another $330 million. (In addition, the Huizhou city government reduced its ownership to 25 percent. At least 38 percent of the remaining shares were held by the public. Strategic investors held 14 percent, and Li himself 6 percent.) Li realized that if he could make TCL's model work, it would very likely establish a model for other state- owned enterprises. He was beginning to feel the pressure to grow faster with even more profits. The TV Market in China The Chinese television market had experienced high demand in 1978, but by 1995, it was turning into a buyer's market. In the early 1980s, the typical Chinese family owned a nine-inch black and white set. Everyone wanted a TV, but to even be able to buy one, you needed to have guanxi (special connections). By 1985, television had switched to color in China, and the number of companies manufacturing sets had skyrocketed. More than 300 television manufacturers competed across the country. Foreign brands, American Management Association / www.amanet.org