Industry: TV sales hurt by end of subsidies, weak property market
TV manufacturing industry.
Domestic TV manufacturers saw profits slump or even vanish, the result of a trio of troubles: the end of government subsidies for home appliance purchases, weak property markets (new apartments mean new appliances) and sagging consumer confidence.
The other factor seriously affecting TV sales is the rise of mobile devices and streaming video.
Sichuan Changhong Electric Co Ltd posted a net loss of 314 million yuan ($50.68 million) during the first three quarters of 2014, turning from a year-earlier profit. Hisense Group, another leading producer, said net profit slumped 18 percent to 920 million yuan in the same period.
And TCL’s multimedia
unit, which includes its TV segment, experienced a third-quarter revenue decline of 28.3 percent yearon
Last year, major brands battled to sell TVs with new types of screens. This year, the chamber’s report said, flat-screen TVs will replace traditional light-emitting diode models and become mainstream.
To attract consumers back to the living room, 4K TVs, which provide four times the resolution of highdefinition TVs on very large screens, will be key.
The market share of 4K TVs has been rising. Industry observers estimate that there are 220 types of 4K televisions in 81 series available in the market, and about 8 million 4K TV sets were sold last year, accounting for 20 percent of the market. The percentage is expected to double this year, according to the report.
Nobuki Kurita, president of Sony China Co Ltd, said the company has put priority on high-end product lines with a focus on 4K TVs. Kurita said Sony will focus on high-end televisions with bigger screens and 4K technology — an area that has not shown any signs of slowdown. Sales of its 4K TVs are expected to rise fourfold from 2013 this year and account for 20 percent of total revenue, he said.
E-commerce has played a major role in the diversification of distribution channels for TV sales. Between January and October last year, around 5.73 million sets were sold online, a 77 percent increase.
Getting viewers to watch programming on TVs rather than streams on mobile devices takes an effort. TVs have been upgraded from simple terminal products to platforms that gather messages, applications and data, said the report.
It is inevitable that many consumers will choose mobile terminals rather than sitting in their living rooms and watching TV, according to Peng Xiandong, general manager of consumer electronics at China Market Monitor Co Ltd, which specializes in market research for home appliances.
“Providing a bridge to channel what is on mobile phones or iPads back to the TV screen is the way of the future,” said Peng.
According to Can Huang, a senior analyst at Mintel Group, Chinese consumers have a fondness for large screens, so more people tend to view video content on a desktop, laptop or tablet than on a smartphone. However, no matter what screen people choose, the preference for video streaming persists, according to his research.
According to data provided by AVC-Brand, a consultancy that specializes in research on home appliances, the smart TV penetration rate in China is expected to soar from 27 percent in 2012 to 89 percent by 2015.
Smart TVs have an open-source platform, video on demand and other user interactive features such as online gaming and Web browsing.
Internet companies, such as Beijing Leshi Internet Information & Technology Corp and Tencent Holdings Ltd, dominate the market. Contact the writer at wang firstname.lastname@example.org