Chinese television makers boost sales with New Year promotions
4.44 million sets sold during three-week promotion period, up 1.1 per cent year on year
Mainland television manufacturers and retailers have reported slight growth in sales during the New Year promotion period but they still face the challenges of a TV set price war and the depreciation of the yuan, according to CCB International report.
The New Year is traditionally a time for many Chinese families to buy something new for the home and the shopping list could include a new television set.
This is why many television makers and retailers on the mainland launched heavy promotions during the three-week New Year promotion period from December 14 to January 3.
According to a report by CCB International analysts Cheng Xing and Ronnie Ho, sales of television sets on the mainland rose 1.1 per cent year on year to 4.44 million units during the three-week promotion period.
The mainland television makers and retailers covered in the report include Haier, Hisense, Changhong, TCL Multimedia and Skyworth.
“We attribute the slight increase in sales volume amid the weak market to aggressive channel promotions and deep discounts on high-end TV products,” the report said.
“Nevertheless, we expect price discounts, the main driver of TV sales, to continue,” the report said.
The report said that although promotions could see more TV sets sold, revenue might decline because they were sold at a discount price and the price war among TV makers as well as the depreciation of yuan would continue to be challenges for television makers.
High-end products were the best sellers, with CCB International finding smart TV sets with 4K functionality and internet connectivity sold the best, along with models with large screens – more than 55 inches – and ultra-clear TVs.
For the New Year’s promotion period, domestic brand TV makers grabbed 82.6 per cent of market shares, up from 76.7 per cent a year earlier.
The share of Japanese brands decreased to 9.3 per cent this year, compared with 12.9 per cent last year, while the Korean brands fell to 8.1 per cent compared with 10.4 per cent a year earlier.
Among the Chinese TV makers, CCB International prefers Skyworth, which reported solid sales volume in December , with China TV set sales volume goes up by 13 per cent year on year and overseas television sales up by 15 per cent.
TCL Multimedia’s December sales were weak, with mainland China TV shipments down 9.1 per cent year on year and overseas TV shipments up 24.1 per centr.
Skyworth beats TCL Multimedia on daily active users by 4 percentage points and on smart TV penetration by 16.2 percentage points.
“With the help of LeTV’s 4 million users, TCL Multimedia currently leads the sector in terms of active users,” the report said. “This may change as we expect the pooling of active users among leading TV players forecast in 2016 to speed up internet platform monetisation and serve as a near-term catalyst for the sector.”
Skyworth’s share price has fallen 45 per cent since May last year, while TCL Multimedia’s has fallen 41 per cent.
“We believe value is starting to emerge for companies with good hardware profitability and strong potential for expanding their internet user bases,” the report said. “Skyworth is our top pick within our China TV universe of covered stocks.”
In terms of sales channels, the report said sales of TV sets via internet sales were rising. During the three-week promotion period, 19.5 per cent of TVs sold were bought online, up 5.7 percentage points year on year.