Increase the amount of color TV market price wars who are the first to loosen up?

Looking at the overall trend of the TV market this year, it has basically remained stable. Q1 to Q3 quarter, China's television sales reached 3.546 million units, an increase of 7.6%. But on the other hand, under the influence of price warfare and other factors, the TV market has always had the reality of “increasing revenue without increasing revenue”, which has become one of the industry’s problems. In the third quarter, TV prices finally showed signs of recovery. This recovery can break the industry's "increase in income," the predicament of the TV company can really get out of the price war quagmire?

Sales Analysis: Over 50 Million Units in the Year!

The growth of the TV market has touched the ceiling, but this year, under the influence of multiple factors, the sales volume of the TV market in China has maintained a steady growth.

According to data released recently on the Internet, in the first three quarters of this year, TV sales reached 3.546 million units, an increase of 7.6% year-on-year, of which, in addition to the seasonally-declined sales decline in February, sales in the other months showed year-on-year growth. Among them, the third quarter, the color TV market sales also maintained this growth. The data shows that in the third quarter of 2016, the retail volume of the color TV market was 11.95 million units, an increase of 8.9% year-on-year.

Industry analysts believe that the year-on-year increase in retail sales in the TV market in the third quarter benefited from property recovery, consumer sentiment rebound and frequent end-market promotions. Take terminal promotion as an example. In the third quarter of this year, there were approximately 27 promotions from brands and channels.

Especially in September of “Jin 9 Silver 10”, there are frequent promotions in the industry this year. In terms of brands, whether it is Internet brands KKTV, PPTV, micro whale, genre, storm, music, or traditional brands Changhong, Skyworth, TCL, Konka, Hisense, Philips have participated; in terms of channels, Suning, Gome are also active . An industry insider who works for an Internet TV brand told the China Business Daily: "There are too many festivals this year, and sales promotions are happening everywhere."

These centralized large-scale promotions further reduced the amount of gold in the “Silver 10”. According to online data, during the “11th” period, TV sales accounted for 10% of the sales volume of the National Day promotion. Such a large number of promotional activities, although on the one hand, are related to brands and channels attempting to pre-empt the National Day promotion. On the other hand, they also reflect the industry's intention to focus on the promotion of consumer consumption by pursuing the growth of the industry.

Since the fourth quarter is also the peak season for promotion, with sales nodes such as Double 11, Double 12, and New Year's Day, TV sales will continue to grow in the fourth quarter, and retail sales are expected to reach 15.29 million units, an increase of 7.2% year-on-year; sales will be exceeded in 2016. 50 million units reached 50.75 million units, an increase of 7.5% year-on-year, which was higher than the previous forecast of 49.93 million units sold in the year and a 5.7% year-on-year increase.

Although the overall market is positive, there is a reality that cannot be ignored in the television industry. That is, “increase does not increase income”. Recently, in the first three quarters of the year, TV production in China increased by 11.3% year-on-year, and exports rose by 17.6% year-on-year. However, neither domestic sales nor exports experienced the phenomenon of “increasing sales without increasing revenue”. Television exports amounted to US$8.99 billion (approximately RMB 60.94 billion). Yuan), a year-on-year decrease of 2.7%.

At the same time, on the domestic sales side, according to online data, in the third quarter, China's TV retail sales amounted to 35.3 billion yuan, a year-on-year decrease of 5.9%, and the retail sales of the TV market in the first half of the year also fell by 4%.

Behind the problem of “increasing revenue without increasing revenue” is the decline in the average price of TV products, which is a fierce price war in the industry. According to the relevant person in charge of a television company's products, the market scale of the TV industry and the mobile phone industry has been continuously expanding in the past 10 years. However, while the average price of mobile phone products continues to rise, the price of TV products has been falling all the way. On the one hand, it erodes corporate profitability. On the one hand, it is not conducive to the healthy development of the industry.

Indeed, the prices of television products in China have been declining. At present, the prices of TV products in China are low. Compared with 2013, at the same price level, we can now buy 8 inches more. For example, the average price of 40-inch products in 2013 was 2,979 yuan, and the average price of 48-inch products in 2016 was only 2817 yuan. yuan.

However, in the third quarter, the price of the whole machine showed a warming trend. At present, the average selling price of 32-inch HDTVs has risen to 1,235 yuan from 1,094 yuan in April. The 40-inch full HD TV has increased from 1,632 yuan in June to 1,749 yuan in October. The average price of 55-inch ultra high-definition televisions has risen from July's 4,477 yuan rose to 4,620 yuan, the average price of 65-inch ultra-high-definition television rose from 9,980 yuan in August to 10,100 yuan.

Strategic Analysis: How to get out of the price war

At present, one of the major backgrounds for the rebound in the prices of TV products is the rebound in panel prices. According to AVC's total sales data, the prices of 32-inch, 40-inch, 55-inch and 65-inch panels in the third quarter of 2016 all rose to varying degrees. For example, from June to September, 32-inch high-definition panel prices were set at 59. The dollar rose to 75 US dollars, or 27.1%; 40-inch ultra-clear panel rose from 93 US dollars to 116 US dollars, an increase of 24.7%.

In September, LeTV raised the price of some products on the grounds of rising panel prices. The increase ranged from RMB 100 to RMB 200. At the same time, the China Daily News reporter was also informed during the interview, in addition to LeTV, there are other brands to reduce the price reduction, or also raised the price of some products, such as 40-inch, 43-inch product prices rose 100 yuan.

The panel that accounts for nearly 70% of the TV cost does affect the TV product price to a great extent. Previously, the continuous decline in the price of the panel has strengthened the confidence of many TV brands in their price wars, providing them with a certain price reduction space, and even the final product prices even lower than the ex-factory price. The rebound of the panel price also affected the TV price of the terminal.

The industry insiders mentioned to the China Business Daily that the cost of TV itself is not low, especially if there is a certain requirement for hardware. But now many brands have made their prices extremely low, and they have even been pressured within a thousand dollars. There is no premium at all. Although there is content to support and obtain certain revenue, there are not many brands that actually achieve full profit in terms of content. Many brands are under greater pressure. If you really want to be a TV, in fact, it is still necessary to ensure the healthy operation of the entire model, at least to ensure that the hardware does not lose money. "We have completed the price adjustment in order to achieve the company's healthy operations."

However, the panel prices have risen, and the price of TV products has risen. More TV companies have been forced to act. Television companies have not gained much in this round of rising prices, and more is to further reduce their profit margins.

In addition, there are institutional analysis, this year, the panel makers gradually shut down some of the traditional production lines, the layout of new technologies, but the early stage of new technologies, lower yields, low shipments, leading to panel supply, prices rose, and is expected to large size next year The increase in panel production capacity is limited, and the price of the main product may be maintained. However, in the long run, the panel industry is still oversupply, and panel prices can keep rising?

Then, how can TV companies really get out of the quagmire of price wars? Insiders believe that product upgrades, large size, high-end products, new technologies are all options.

From a quarterly perspective, in the first three quarters of this year, the average global panel size was 40.1 inches, 41.1 inches, and 41.3 inches, respectively, and the forecast for the fourth quarter was 42.2 inches. At the same time, the average size of Chinese TVs also increased from 45.3 inches to 46.6 inches to 46.6 inches, while the average size in the fourth quarter is expected to reach 47.2 inches.

In the face of the erosion of low-end and mid-range brands by Internet brands, traditional brands have started to tap the mid-to-high-end market. TCL and Hisense have all increased their presence in the high-end market. In the Q3 quarter, the penetration rate of traditional brands in the price segment from 6,000 yuan to 7,999 yuan was 65%, an increase of 7 percentage points over the same period of last year, and the penetration rate of Internet brands from 8,000 yuan to 9,000 yuan in the price segment was 3%, which was a drop from the same period of last year. 5 percentage points.