Selling a loss to a TV market has not been cold for 10 years

In mid-2017, the home appliance industry has released related performance reports. In all categories, the television industry has seen profits that have not been seen for many years or even losses. What are the reasons for the shrinking profits of the television industry? How long will this state last? How is the person in charge of domestic TV leading enterprises to respond? Look at the survey of Financial Channel reporters.

TV sales growth downline on the sales line

Zhu Xigui is a salesman in a home appliance store. He has sold domestically-branded TVs for more than four years. At 4 pm on Sunday, July 30th, this should be the busiest time, but few customers come to the empty store.

TV sales clerk Zhu Xigui: In July, it sold 33 units. In July last year, it sold more than 50 units in the whole month. From the second half of last year, it felt a little pressure, after October.

The television sales industry is not as good as one year in a year. The hard work has become the same as the sales staff under the TV line. The reporter observed that in the store, during the weekend from 3pm to 4pm, only 4 customers entered the store, and two of them consulted with the salesman but did not reach an order. The cold sales situation in the TV industry not only appears online and offline, but is also similar on the Internet. On a large home appliance sales platform, the number of sales of TV sets also fell.

Yang Zisheng, general manager of the Black Power Business Department of the Home Appliances Business Unit of Jingdong Mall: Sales volume decreased, and sales increased slightly. Compared with our air-conditioning and other categories, it can be said that growth is very weak.

According to data from the third-party market research company Yikang monitoring, in the first half of 2017, China's color TV market shipments were 22.51 million units, a year-on-year decrease of 10.8%; retail sales were 75.4 billion yuan, a slight increase of 0.8%, as a whole. Depreciation increases.

Peng Xiandong, general manager of China Consumer Electronics Co., Ltd., said that in the first half of this year, the color TV industry was not difficult in history, and sales data fell overall.

The rise in the price of the Waterloo panel in the TV industry is the main reason!

In the first half of this year, the dismal sales of online and offline companies are just a microcosm of the survival of TV companies. Recently, several major TV manufacturers in China have released their sales in the first half of the year. It can be said that the entire industry has encountered Waterloo in the first half of 2017.

Chairman of Skyworth Digital’s Board of Directors Lai Weide: In the first half of this year, the situation in the first half of the year was somewhat lower in terms of volume, but it was basically the same in terms of income. This is basically the same situation as this TV market across the country. It is not particularly good. The growth slowed down.

Chang Dong, the assistant chairman of the board of directors of Konka Group, said that color TV is still the main business of Konka Group so far and faces great industry difficulties.

The sales of major TV companies in China in the first half of 2017 were all worse than before. Shenzhen Konka A said in the mid-year performance forecast that the company’s net profit was about 26 million to 32 million yuan, and the main business suffered a certain amount of losses; Hisense’s net profit for the first quarter of 2017 was 91 million yuan, down 74.4% year-on-year. Sichuan Changhong posted a loss of 176 million yuan in the first quarter of 2017, a year-on-year increase of 248%. Skyworth Digital’s sales decreased during the first seven months of this year, and TV sales decreased by 31% in June from the same period last year. Only TCL Multimedia's net profit for the first half of this year was RMB 144 million, which was a 63.9% increase over the same period of last year. However, as the only company with profitable growth, TCL also deeply felt the industry's downturn.

Li Dongsheng, Chairman and CEO of TCL Group, said that the current business situation is still more difficult because the entire domestic market of the market is declining, and the global market is also growing slowly. This decline in growth will bring more intense price competition. From the perspective of the entire industry, this year is a very difficult first half.

So, what is the reason for the slump in the industry in the first half of this year?

The panel, which accounts for more than 40% of the cost of all television raw materials, has caused panel prices to rise, which will inevitably lead to TV prices rising. According to the data from Zhong Yikang, from the second quarter of 2016, TV panel prices have increased by nearly 45%, the biggest increase has been like 65 inches, and the price has risen more than 60%. In contrast with TV companies, the first half of this year has become a very good one for panel companies. The overall industry's profit margin has reached 30%. Both have realized losses and even profits.

Peng Xiandong, general manager of China Consumer Electronics Co., Ltd.: One is larger in size and larger in consumption; the second is in international companies, which shut down the production lines used to produce large-size LCD TVs; That is, Japan Sharp has made great changes in its supply structure. It no longer supplies and sells to Samsung and China these big machine factories. It is only used for its own internal supply. This has caused a change in supply and demand. The price rose.

In addition, industry analysts said that the slump in the industry this year was not seen in the past decade. China's TV companies have experienced a very tormented situation for six months. The main reason is the rise in panel prices. In addition to the increase in panel prices, the impact of mobile phones such as mobile phones and notebooks on television has also caused a significant impact on the industry. In addition, the recent cooling of the real estate market has also had a certain impact on the television industry's sales in the first half of this year.

TV companies are looking for survival in the crevices and expect users to return to the living room

As panel prices have risen, the profits of TV companies have shrunk dramatically. In the first half of 2017, China's TV companies have spent a very difficult period of six months. But they did not sit still, but they tried to find a living space in the cracks. Let us see what they have done.

A large-scale home appliance company in Shenzhen is conducting training sessions for national sales personnel for its newly released products. Remote voice control has become the main feature of this TV. Different from the instructions that need to be issued to the remote controller before, this TV can satisfy the user's direct voice instructions without the need of a remote controller. It can also control other devices in the living room, such as humidifiers, sweeping robots, etc. through voice.

Zhang Haoran, training manager of Konka Tianjin Branch, has a very clear product and technical characteristics. Product technology does indeed see something different. It can not only be better displayed in the terminal, but also greatly enhance the confidence of the direct sellers.

In addition to voice interaction control, face recognition and other "black technology" have begun to apply on televisions.

Fan Weiji, product manager of TCL Multimedia Product Center, introduced that through face recognition technology, TV has already presented the relevant information of the star inside the picture to us. On the right is the introduction of some movie and TV dramas that the star has also participated in. The audience can directly go to see more movies and TV programs.

In addition to hardware research and development efforts, in order to deal with the panel price increase, the rapid elimination of the original inventory, with a larger screen, higher value-added products to replace is also a direction for TV manufacturers to work hard. In the exhibition hall of a TV store, within the same area, there has been no small change in the installations this year and last year.

Not only does the average size under the line increase, online sales data also shows an increase in pin size. In JD.com, TVs sold online have more than half the 55-inch or larger size. The speeding up of the screen size by manufacturers is mainly to eliminate the inventory of low-profit products. Industry sources told reporters that at present, products with a relatively high gross margin in the market are 55-inch and 65-inch. TV manufacturers quickly update their products, which also changes the consumer's willingness to buy.

According to Zhong Yikang’s data, the main size in 2015 was still 32 inches. At that time, the 32-inch market accounted for about 30%, and the 55-inch market accounted for less than 18%. By the first half of 2017, the market share of 32-inch TVs was only 17%, while that of 55-inch TVs increased to 35%. The average size of Chinese TV sales was already close to 50 inches.

In addition to seeking innovation in many aspects such as hardware and intelligence, opening up sales has also become a direction for Chinese television companies to work hard. This is a group of 65-inch TVs that will be listed on the North American market in October. They are slightly different from the domestic ones in terms of packaging.

Zhao Li, Director of TCL Multimedia Huizhou TV Factory: In the past, like overseas markets, such as long-distance transportation, there will be individual LCD glass cracks. Here we have made improvements to add such cushions, or such honeycombs. The board plays a buffering role.

Each cushion needs to increase the cost of 1 to 3 US dollars, but in order to better develop the market, such costs must be paid. In the first half of this year, the company relied on overseas strategies to reverse the trend.

Li Dongsheng, Chairman and CEO of TCL Group, told reporters that the company’s overseas business growth this year is the most important driving force for color TV business growth. In the US market, the company made 1.76 million in the first half of this year, which is the figure for the whole year.

This kind of profit growth has been felt deeply by Zhao Dali, who has worked in the first line for 7 years. The increase in overseas orders has caused the production lines that are engaged in overseas operations to remain in full production, and the people's machine stops. In nearly 20 production lines under his jurisdiction, more and more proportions are tilted to the supply of overseas markets.

Chairman of Skyworth Digital’s Board of Directors Lai Weide: In the past two years, we have successively acquired some foreign brands. For example, we acquired Toshiba’s business and factories, which radiated throughout the ASEAN region. We acquired Metz in Germany and acquired Austria’s. Founding and so on. From the present point of view, 45% of our products are exported to foreign countries.

With the improvement of the overall quality of Chinese TVs and the increasingly saturated Chinese market, more and more Chinese companies will look to the whole world, which will also become an important pillar of the rise of Chinese TV companies.

Lin Xinyu, chief analyst of household appliance industry of CSC Securities: From now on, including North America, including Australia, including Europe, many Chinese brands have already had an obvious increase in popularity in these places, including sports penetration. Including the infiltration of culture and entertainment, the brand awareness of the entire China market and the loyalty of foreigners to Chinese brands have also greatly improved.

The plight of the first half of 2017 is not necessarily a bad thing for Chinese TV companies. How to fight back in the Jedi, in the market full of variables, leaving more to each brand or hope.