Skyworth Liu Zhizhi's low-price competition against economic rules will not last long

With the end of the 11.11 shopping spree, 2016 gradually came to an end. After the carnival, the color TV industry is still cold.


According to data published by Ove Cloud Network, in the first three quarters of this year, the sales volume of color TV reached 3.546 million units, an increase of 7.6% year-on-year. Although the overall market is positive, there is a reality that cannot be ignored in the color TV industry. That is, the increase does not increase revenue. In the third quarter of 2016, retail sales in the color TV market reached 35.3 billion yuan, a year-on-year decrease of 5.9%.

The color TV industry has been caught in a vicious circle of non-increasing revenue growth. Besides, the impact of price wars on the rise in panel prices is also one of the reasons. Data shows that in the third quarter of 2016, prices of 32-inch, 40-inch, 55-inch, and 65-inch panels all rose to varying degrees. From June to September, 32-inch high-definition panel prices rose from US$59 to US$75, or 27.1%. The 40-inch ultra-clear panel rose from $93 to $116, or 24.7%. Panel prices accounted for more than 70% of the cost of the whole machine. The increase in raw material costs further squeezed the profit margin of color TV manufacturers.

Faced with the pressure of rising panel prices, even if it is advocating hardware free LeTV also announced that each super TV prices 100-200 yuan. The previously disclosed 2016 semi-annual report showed that LeTV’s LeTV’s first-half net profit loss for the first half of the year was RMB 56.87 million.

For the price war, Liu Weizhi, the vice president of the Board of Directors of the Skyworth Group and the president of the color TV division, said on November 16 that this unconscionable low price is anti-economic. Selling 800 products at a cost of 1,000 yuan is harmful to both shareholders and users. A product does not stop at one sale, but also needs to provide users with follow-up services.

Liu Yuzhi believes that no matter how the color TV industry changes, how business model innovation, hardware must make money. Low-price competition is unfair to the industry. It is not just a long-term, non-profitable company.

In the third quarter, the price of the whole machine showed a warming trend. Ove Cloud Network data show that the current average price of 32-inch high-definition television has risen from 1,094 yuan in April to 1,235 yuan, and 40-inch full-HD TV has increased from 1,632 yuan in June to 1,749 yuan in October, 55 inches. The average price of high-definition television increased from 4,477 yuan in July to 4,620 yuan, and the average price of 65-inch ultra-high-definition television increased from 9,980 yuan in August to 1,100 yuan.

However, the price increase of the original color TV products is not easy, color TV manufacturers have begun to transition to high-end, color TV product technology to diversification, ultra-high-definition, large-size. The penetration rate of traditional brands in the 6000-7999 price segment in the third quarter was 65%, an increase of 7 percentage points from the same period of last year.

Liu Yuzhi stated that with the advancement of independent research and development technology in China, technical barriers to OLED display screens and chips have been broken, and the next decade will be the golden decade of China's color TV industry. On the 16th, Skyworth released the first self-developed OLED TV product in China.

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