In­dus­try: TV sales hurt by end of sub­si­dies, weak prop­erty mar­ket

China Daily (Canada) - - FRONT PAGE -

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 zhuo­qiong@chi­nadaily.com.cn

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