In­tel­li­gent tele­vi­sion

Man­u­fac­tur­ers shift fo­cus to smart TVs, over­seas mar­kets

China Daily (USA) - - FRONT PAGE - By FANFEIFEI fanfeifei@chi­nadaily.com.cn

Slow­down-scarred, growth­seek­ing Chi­nese tele­vi­sion man­u­fac­tur­ers are shift­ing their fo­cus to in­tel­li­gent TVs and over­seas mar­kets.

Five key rea­sons char­ac­ter­ize the trend: fall­ing sales, the rise of smart­phones and per­sonal com­put­ers as view­ing de­vices, over­ca­pac­ity, high in­ven­tory and fiercer com­pe­ti­tion in the do­mes­tic mar­ket.

For long, China has been a ma­jor base for pro­duc­tion and sale of TVs. But sales rev­enue slipped to 71 bil­lion yuan ($10.7 bil­lion) in the first half of the year, down 4 per­cent year-on-year, ac­cord­ing to All View Cloud, a Bei­jing-based home ap­pli­ances con­sul­tancy.

One of the fac­tors that caused the rev­enue fall is TV mak­ers’ low-price strat­egy. The av­er­age price of a TV set fell 10.2 per­cent to 3,020 yuan in the first six months.

The ex­plo­sion of mo­bile in­ter­net, and the lim­it­less con­tent it of­fers, have also made the tra­di­tional TV al­most ob­so­lete. The ad­vent of cloud­com­put­ing and big-data tech­nol­ogy has given view­ers new ways of stor­ing and re­triev­ing con­tent for con­sump­tion at their con­ve­nience.

In­ter­net com­pa­nies such as PPTV Me­dia Tech Co Ltd and Baofeng Tech­nol­ogy Co have for­ayed into high-end TV man­u­fac­tur­ing, in­ten­si­fy­ing com­pe­ti­tion in the do­mes­tic mar­ket, said DongMin, gen­eral man­ager of AVC’s TV de­part­ment.

So, Sichuan Changhong Elec­tronic Co Ltd has switched gears and be­gan man­u­fac­ture of in­tel­li­gen­tTVs it­self. It­sChanghongCHiQTV model boasts fea­tures like in­ter­ac­tive voice sys­tem and self-learn­ing ca­pa­bil­ity. Users can “com­mu­ni­cate” with the TV — and the TV will un­der­stand their pref­er­ences and ad­just it­self to beam what they need.

“We’re al­ways seek­ing to en­rich liv­ing spa­ces as well as de­velop the in­dus­try with tech­no­log­i­cal ad­vance­ments and in­no­va­tion,” said Guo Dex­uan, chair­man of Changhong Multimedia Group, a sub­sidiary of the Sichuan­based Changhong Elec­tronic.

That ap­proach seems to be work­ing — net profit of Changhong Elec­tronic reached 765 mil­lion yuan in the first half, up 695 per­cent year-on-year.

Ac­cord­ing to IHS Inc, a TV mar­ket con­sul­tant, de­mand for TVs in the China mar­ket is gen­er­ally sta­ble, but in­tel­li­gent TVs are gain­ing ground, with their pen­e­tra­tion rate among Chi­nese fam­i­lies es­ti­mated to reach 46 per­cent in 2019.

Be­sides the tech­nol­ogy push, TV mak­ers are step­ping up ef­forts to go global.

Ex­pan­sion into over­seas mar­kets could not only re­lieve the pres­sure of high in­ven­tory in the do­mes­tic mar­ket but in­crease Chi­nese com­pa­nies’ in­ter­na­tional in­flu­ence, said Dong of AVC.

One more strat­egy be­ing adopted is brand pro­mo­tion out­side China.

For in­stance, Hisense Group has been in­creas­ing the aware­ness and sales of its brand glob­ally by as­so­ci­at­ing with ma­jor sport­ing events.

Hisense was one of the spon­sors of the UEFA Euro 2016 soc­cer cham­pi­onship in June, the first Chi­nese com­pany to do so in the 56-year his­tory of the tour­na­ment.

The spon­sor­ship, which cost Hisense at least 50 mil­lion eu­ros ($55.84 mil­lion), boosted its sec­ond-quar­ter sales in Europe by 56 per­cent year-on-year, and is ex­pected to hold the brand in good stead in Europe in the years to come.

Sales of the high-end 70-inch Hisense TV model reached 500 units in Ger­many as soon as the soc­cer tour­na­ment kicked off on June 10, said Lin Lan, vice-pres­i­dent of the Shan­dong-based com­pany.

“It (spon­sor­ship) helped us build our brand (in Europe) and ac­cel­er­ate our over­seas growth. In the next three to five years, our over­seas sales are ex­pected to reach $4 bil­lion and ac­count for 50 per­cent of our over­all rev­enue,” Lin said.

Hisense also plans to es­tab­lish two re­search and de­vel­op­ment cen­ters in Ja­pan and Is­rael this year. So far, the com­pany has set up 17 over­seas sub­sidiaries and nine R&D cen­ters in Europe and the United States.

Af­ter the UEFA event, Hisense turned to the op­por­tu­nity pre­sented by the Rio 2016 Olympic Games.

It pro­moted its ul­tra-LED TV and 4K laser TV through its of­fi­cial part­ner­ship with the Chi­nese na­tional gym­nas­tics team.

Like Hisense, other TV man­u­fac­tur­ers are in­creas­ingly pay­ing at­ten­tion to over­seas mar­kets.

Li Dong­sheng, chair­man and CEO of TCL Cor­po­ra­tion, said the com­pany’s over­seas rev­enue ac­counted for 47 per­cent of the to­tal last year. The ex­pec­ta­tion now is that its over­seas rev­enue will reach 50 per­cent in the next three years.

Li said in or­der to ex­pand its in­tel­li­gent TV busi­ness glob­ally, TCL will forge co­op­er­a­tion agree­ments with United States on­line video-stream­ing firm Net­flix Inc, stream­ing me­dia box mar­ket leader Roku Inc and other in­tel­li­gent TV op­er­a­tors in Europe.

“This is the era of in­tel­li­gent TVs. Only man­u­fac­tur­ers that have the nec­es­sary ca­pac­i­ties and ca­pa­bil­i­ties to build ecosys­tems will sur­vive,” said Dong of AVC.

This is the era of in­tel­li­gent TVs. Only man­u­fac­tur­ers that have the nec­es­sary ca­pac­i­ties and ca­pa­bil­i­ties to build ecosys­tems will sur­vive.” Dong Min, gen­eral man­ager of the TV de­part­ment at All View Cloud, a Bei­jing-based home ap­pli­ances con­sul­tancy

Xie Chuan­jiao and Gao Songya con­trib­uted to this story.

SHI YAN / FOR CHINA DAILY

A TV sec­tion at an RT-Mart store in Haikou, Hainan prov­ince. China’s TV sales rev­enue slipped to 71 bil­lion yuan ($10.7 bil­lion) in the first half of the year, down 4 per­cent year-on-year.

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