Report said domestic color TV loses price advantage

In yesterday's “2010 China Electronic Information Industry Operation and TV Industry Research Conference”, Aowei Consulting released data showing that the overall price of foreign-brand LCD TVs in 2010 dropped continuously for more than 4% of domestic brands for six consecutive months. The industry is the first time.

The aggressive strategy adopted by foreign brands has been affected by the global financial crisis. Foreign brands of TV brands have turned to the domestic market to achieve their annual performance targets. From February 2010 to November 2010, the year-on-year price of LCD TV kingpins has fallen by more than 20%. In 2010, the overall price drop of foreign-brand LCD TVs continued to surpass 4% of domestic brands for six consecutive months, which is the first time in the industry. Currently, in the CCFL backlight LCD TVs, the price ratio of foreign brands to domestic brands has been at a level of 1.1 times, and the domestic brand's price advantage has almost been lost.

The reporter found that during the May 1st and National Day last year, the price cuts of foreign brands must be significantly higher than domestic brands. Under the low-cost strategy of foreign brands, the national and international brand market share of National Day Golden Week was 56:44, compared with 71:29 in the same period of 2009. However, domestic brands have expanded their product coverage with home appliances to the countryside and other policies, strengthened channel development in the 3rd and 4th markets, improved after-sales service, consolidated the absolute dominant position of the rural market, and made up for the lack of market share in cities. The brand's pattern remains at 70:30.

Regarding price reduction reasons, Ovid Consulting analyzed that the penetration rate of LED TVs has risen rapidly, and the cost of products brought by the large-scale production of LED-backlit LCD TVs has rapidly declined. Due to the backlog of CCFL-backlit TV inventory, CCFL LCD TV prices dropped further due to inventory clearance. Foreign brands reduced product manufacturing costs through OEM and adopted offensive low-cost strategies that led to a drop in product prices.

The rural market has become the main driver. Ovid Consulting stated yesterday that it is expected that the sales volume of color TV sets will reach 43.65 million units in 2011, with sales of 181.3 billion yuan, and the volume and amount will increase by 9% and 20% year-on-year. The retail volume of LCD TVs will reach 38.16 million units and the retail sales will reach 15.93 million units, an increase of 14% and 18% year-on-year. Plasma TV retail sales are expected to exceed 2.9 million units. At the same time, the domestic sales volume of color TVs in 2015 will reach 60 million units.

In the next five years, the rural market will also become the main driving force for the growth of the color TV market. According to the reporter, in 2008-2009, the sales volume of color TVs in the rural market reached more than 32 million units, of which "home appliances to the countryside" accounted for more than 40%. After July 2009, due to the promotion of the “Home Appliances to the Countryside” policy and the layout of color TV companies, the sales volume of color TVs in the rural market has been rising. In particular, LCD TVs have also rapidly become popular. Ovid Consulting Data shows that by October 2010, the cumulative scale of LCD TVs in the rural market was 9.898 million units, accounting for 36.4% of the total market size, and the proportion of “home appliances to the countryside” accounted for 25.5%. In November 2010, the newly tendered home appliances to the countryside model, some TV brand 3D, LED and other high-end products also entered the rural market.

It is worth mentioning that, in 2010, the sale of LCD TVs totaled 33.47 million units, sales of home appliances to the countryside accounted for about 30%, and the trade-in contribution was 25%. However, as the policy advances, the marginal effect of boosting the color TV industry growth is also diminishing.

In addition, internet sales in the color TV industry are expected to grow rapidly in the next five years, at least occupying 10% of the market share. In 2010, the size of color TV achieved by e-commerce channels only accounted for 1% of the total scale.

â–  Phenomenon Tablets basically replace CRT TV data. In 2010, China's color TV market reached 39.98 million units, an increase of 16% year-on-year, of which LCD TV retail volume was 33.47 million units, an increase of 42% year-on-year; plasma retail sales volume was 2.11 million units, a year-on-year increase. 24%; Traditional CRT TV retail sales were 4.4 million units, a decrease of 52% year-on-year. The proportions of LCD TVs, plasma TVs, and CRT TVs were 84%, 5%, and 11%, respectively, compared with 68%, 5%, and 27% in the same period of 2009. This also means that flat-panel televisions have basically completed the transition to replace CRT TVs.