TV sets eat ash, and traditional household appliances decline
2022-05-11
Recently, Sichuan Changhong disclosed that the annual report of 2021 pointed out that during the reporting period, the company realized an operating revenue of 99.632 billion yuan, but the net profit attributable to the shareholders of the listed company was only 285 million yuan, and the profit margin was only 2%. Meanwhile, the gross profit margin of sales also fell to 9.97%, down 2.32% year-on-year. Changhong has long been familiar with the TV business, but from the latest financial report, its TV business revenue accounted for only 14.12%, far lower than the air conditioning and refrigerator business. Therefore, Changhong's own TV business has experienced a serious recession, which is farther and farther away from the halo of the former "color TV king". The change of product status is always accompanied by the transformation of player roles and the strong admission of many Internet enterprises. While redefining color TV, it also breaks the former industry pattern. Those former color TV giants who failed to comply with the "choice of the times" reluctantly stepped down from the altar, and the momentum of "weakness" continues with an irresistible trend. It can be seen that the former giants such as Changhong, Konka and Skyworth are making a final struggle to preserve their former dignity. However, how can a former leader be a follower? Obviously, at a time when most industries are approaching saturation, the "Changhong" trapped in the quagmire of transformation can no longer win the dignity and glory of the past. Declining home appliance giant In the eighties and nineties of last century, TV is an important household appliance. The rising demand has made some market players. Among them, Changhong, Konka and Skyworth have also become the head brands of traditional household appliances. These brands were no weaker than Mercedes Benz, BMW and Audi in the home appliance market that year. However, it is very different from the fate of Mercedes Benz, BMW and Audi. The giants of traditional household appliances have achieved rapid prosperity, but their decline has come faster. Among them, Sichuan Changhong is one of the representatives of traditional household appliance brands. Compared with other color TV brands, Changhong color TV transformed by the military factory began research, development and production as early as 1970. After the reform wave in 1978, Changhong has made its own brand. Since 1989, Changhong's economic indicators have ranked first in the same industry in China for many years. At the top of the list, Changhong has been sitting for 20 years. In 1997, after Changhong went public, it took less than a year for its market value to quickly break through 59 billion, becoming the leading stock of household appliances at that time. Since then, even to the point where investors see the stock price of Sichuan Changhong and know the rise and fall of Shanghai Stock Exchange. The huge "success" of the secondary market has also been rapidly transmitted to the terminal market. "For every three color TV sets sold, one is Changhong." In 1997, the market share of Changhong color TV set was as high as 35%. Under the high light, almost no one in the country does not know "Changhong", and every family is proud to have a Changhong TV. However, historical experience has proved that enterprises need crisis awareness at high light times. Unfortunately, Changhong doesn't seem to understand this truth. In the next few years, Changhong launched a "price war" one after another, seizing the market with ultra-low prices and disturbing the market. With the upgrading of consumption, in the condemnation and pressure of many color TV enterprises, consumers began not to buy Changhong's account. In a hurry, Changhong, who has no foreign trade experience, aimed at overseas. As a result, as expected, Changhong suffered serious losses in overseas markets. Since then, Changhong has been losing ground, opening a gap with other competitors. At present, the once arrogant Changhong with the halo of "color TV king" has only a market value of about 12 billion, and its share price has fallen from the highest point of 14.64 yuan to more than two yuan per share. According to the 2021 China color TV sales ranking released by ovicloud, Sichuan Changhong currently ranks sixth, with a market share of 7.55%, and the gap with the top five sales giants is widening. [source: Snowball] In order to survive better, Changhong has sold its own buildings, transferred its subsidiaries and sold its equity over the years But later facts tell people that not only Changhong has declined, but the whole color TV industry has declined. Good times don't often happen, and flowers don't bloom in a hundred days. Those well-known color TV brands finally fell under the impact of the times. For example, Konka, which pulled Changhong down in 1999, after experiencing the glory of "ranking first in national color TV sales for five consecutive years", in the era of TV upgrading from CRT to LCD and flat-panel TV, it still threatened to do CRT for another ten years, and the result was a decline all the way. For another example, as the earliest OLED TV entrant in China, Skyworth of all in OLED gradually fell out of the first tier of color TV after high light in 2013. From the perspective of domestic sales and market share in recent years, Skyworth is stepping into marginalization One view is that the decline and failure of color TV giants is an alarm for those enterprises in the period of growth and prosperity. Invisible increment, unstoppable invasion In fact, from today's perspective, the decline of these declining color TV giants is not entirely due to their own reasons. With the rapid development of social economy and the advent of various technologies, the emergence of mobile phones makes people no longer feel ecstatic because they have a TV. The participation of Internet players caught "Changhong" unprepared. The torrent of the times always drowns some products that do not belong to this era, and color TV is one of them. Around 2013, with the popularity of smart phones, the whole color TV industry was affected. According to the data of various statistical platforms, around 2016, the power on rate of TV sets in China was still about 70%, and three years later, the power on rate was only less than 30%. Related to the startup rate is the sales volume of color TV sets. According to the data of ovicloud, the sales volume of TV sets in China was 44.5 million in 2020, a year-on-year decrease of 9.1%; The sales volume was 120.9 billion yuan, a year-on-year decrease of 11.7%. By 2021, the market retail volume of China's color TV industry will fall to 38.35 million units, the lowest in 12 years. [data source: Huajing Industry Research Institute] Compared with the end of last century, the technology of color TV has developed by leaps and bounds, but the reason why the market has not developed by leaps and bounds of technology is obvious. With the popularity of smart phones and PCs and the acceleration of the pace of life, the way consumers watch video starts to migrate from the TV end to the mobile end. People's entertainment methods and ways of obtaining information are more and more diversified. They can obtain content anytime and anywhere, and quickly transition from the normal of "watching TV" to the era of "playing mobile phone". The small screen replaces the large screen, and today's color TV sets have gradually changed from functional household appliances to furnishings that are also used to "decorate" families. Many young groups may not be able to turn on the TV once a month or two after they buy the TV. At the same time, young people also prefer alternative products such as projectors, which not only have a larger "screen" and are more convenient to carry, but also do not occupy a place. It is an indisputable fact that color TV sets have already entered the stock market stage. In such a market environment, traditional color TV brands have not found new "incremental" points, nor grasped the development opportunities brought by consumption upgrading. Being eliminated by the market is doomed to be more than half, while the other half is the emergence and influx of new players after the advent of the Internet era. Also around 2013, under the theory that "TV is the core screen second only to mobile phones", LETV entered the color TV industry under the banner of "Internet TV". After LETV came on the stage, it imitated the "cost price" playing method of Xiaomi mobile phone that year and publicly declared that "selling a TV loses 400 yuan, and the larger the size, the more the loss", pushing the price war to the extreme. After LETV, based on the same theory, Xiaomi also stepped into the track. In September 2013, Xiaomi released its first generation TV products and officially entered the color TV market. At that time, Xiaomi positioned the first 47 inch 3D smart TV as "the first TV for young people", with a price of 2999 yuan. At that time, when buying traditional brands at this price, it could only buy a 40 inch one. With the advantage of "extreme cost performance", Xiaomi TV has quickly won the recognition and support of consumers, especially rice noodles. [source: Xiaomi home] In the following years, the competition of major mobile phone manufacturers for aiot intelligent field has become increasingly fierce. In addition to Xiaomi, mobile phone brands such as glory, Huawei and oppo have launched their own TVs as the core products in the intelligent ecology, focusing on the strategic directions of price war, self-developed technology and high-end products. In addition, old mobile phone brands such as realme, Yijia, Nokia and Motorola have also updated new smart TV products overseas. Compared with traditional color TV manufacturers such as Changhong, Konka and Skyworth, mobile phone manufacturers have a better understanding of consumers' pain points. They use their own technical advantages, user advantages and brand influence to build a business model of home entertainment terminal platform, which is recognized by consumers. At the same time, they have also distanced themselves from traditional color TV manufacturers. In 2021, Xiaomi ranked first in China's color TV market with a shipment of nearly 9 million units. It is believed that as major mobile phone manufacturers continue to enter the color TV industry and impact the traditional home appliance brands, it will also bring more fierce competition, and a new round of reshuffle has begun to be staged. Transformation is a muddy road In the increasingly harsh market environment, there is not enough technology development, new growth points, nor strong enough marketing ability to compete with the head players, so the layout transformation has become the best choice, and "Changhong" have long been aware of this and embarked on a difficult transformation journey. But the question is, how to transform? Take what transformation? What is the direction of transformation? These issues will be topics worthy of long-term attention. From the current transformation of several companies, they have no clear answers and obvious results. Take Changhong as an example. In fact, it opened the road of diversification as early as a few years ago, such as batteries and air conditioners. It even entered the mobile phone and it product industry in 2005. After 2008, it has entered the hot real estate industry. In 2017, Changhong launched smart home application solutions, expanding five business directions: intelligent control, security, big media, energy and health. It has to be said that these tracks look promising, but unfortunately, Changhong's diversified road is in a mess. According to its annual report, as of the first half of 2021, Changhong ICT products ranked first in Sichuan Changhong's revenue with 18.764 billion. However, the gross profit margin was only 2.58%, which was the lowest among all businesses. In addition, the gross profit margin of traditional household appliances such as air conditioners, refrigerators and televisions is not prominent, but real estate, special business and system engineering. The gross profit margin accounts for 28.75%, 31.34% and 31.93% respectively. It can be seen that Changhong has not done a good job in the transformation project, which has dragged down the already poor color TV business. Like Changhong, Konka, a declining "noble", has also tried to take the transformation route of "diversification" in the past decade to get rid of the current situation of relying on a single color TV product. According to public information, Konka has involved a lot of projects such as real estate, intelligent manufacturing, new energy, health and so on Starting from the establishment of kangxinwei company in 2018 to officially research and develop chips, Kangjia Xinying, a sealing and testing plant, was invested 1.082 billion in Yancheng in 2019. The first batch of chips have been delivered for mass production in December 2019, but the price is not high and does not bring much revenue to Konka. And in 2021, it will be semi guided
Edit：Li Ling Responsible editor：Chen Jie
Source：xincaijing
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