TV Price War Impact

Yesterday, the reporter learned from the agency that in the third quarter of this year, the retail sales of domestic color TVs fell 6.4% year-on-year, and retail sales fell 0.5% year-on-year. Coincidentally, in recent days, a number of color TV companies in the third quarter reported that the third quarter net profit fell. Analysts pointed out that the main reasons for the decline in net profit are the sluggish consumption environment, the withdrawal of energy-saving subsidies, and the “price war” set by Internet companies.

TV sales rose first and then suppressed yesterday. The reporter learned from AVC that the sales volume of domestic color TV reached 10.84 million units in July-September 2013, down 6.4% year-on-year, and retail sales was 39.4 billion yuan, down 0.5% year-on-year. %. Among them, LCD TV sales were 10.38 million units, down 3.8% year-on-year, and sales were 37.5 billion yuan, up 3.1% year-on-year. Plasma TV sales were 420,000 units, down 37.8% year-on-year, with sales of 1.8 billion yuan, down 40.9% year-on-year.

Coincidentally, a number of color TV companies reported in the third quarter recently that the third quarter net profit fell: Hisense’s net profit for the quarter in the third quarter of this year was 316 million yuan for shareholders of listed companies, down 4.7% year-on-year. In the first three quarters of TCL Multimedia's continuing operations, net profit after taxation was approximately HK$45 million, a year-on-year decrease of 91.9%, and the net profit margin was 0.2%, with the Group’s loss in the third quarter of HK$140 million, compared to a profit of 200 million in the same period last year. In the third quarter, Konka Group’s net profit attributable to shareholders of listed companies was 1.026 million yuan, a year-on-year decline of 80.99%.

Su Liang, brand director of AVC Consulting, pointed out that the overall trend of the TV industry this year is to rise first and then decline, with high growth in the first half of the year and decline in the second half of the year. In the third quarter, sales of LCD TVs decreased but sales increased, mainly due to large-screen and high-definition, ultra-high-definition. The reporter read the financial report to see that, for example, Konka Group, the group's color TV business revenue growth of 45.07% in the first half, year-on-year growth in total operating revenue of 33.85%, net profit growth of 253.59%.

Can not rely on policy withdrawals A number of industry sources pointed out that the exit of the energy-saving subsidy policy had a negative impact on TV sales in the third quarter. "The previous subsidy policy overdrawn the market demand. As far as I know, some consumers who plan to purchase color TVs in the second half of the year will rush to buy before May 31st," said an insider of a home appliance manufacturing company.

However, some industry experts also expressed different opinions. Liu Buchen, an expert in the home appliance industry, believes that although the energy-saving subsidy policy has withdrawn, the third-quarter performance of white-living companies is increasing. It can be seen that the main reason for the decline in the earnings of TV-based companies is not that Policy, but because Internet companies enter the television industry as "price challengers", lowering prices has resulted in lower profits. "Traditional TV producers must be more confident in their own price system. To avoid falling into the quagmire of price wars 10 years ago, we must devote more efforts to product functions and user experience," said Liu Buchen.

For the fourth quarter of the television market, agency forecasts are still not optimistic. Ovid Consulting (AVC) expects that the overall market sales in the fourth quarter of 2013 will reach 12.72 million units, down 2.8% year-on-year, with overall sales of 48 billion yuan, a year-on-year increase of 5%.