What are the future business opportunities for the color TV industry, which is stuck in the vicious circle of increasing volume but not revenue?

At present, as the main region for color TV production and sales in the world, China's market development trend has attracted much attention from the industry. After several rounds of reshuffles, the domestic color TV industry ushered in new problems and challenges in 2016.

According to AVC industry chain data, the retail volume of color TVs in the first half of 2016 reached 23.51 million units, a year-on-year increase of 6.9%; the retail sales reached 71 billion yuan, a year-on-year decrease of 4.0%. It is estimated that the retail volume of color TVs in China in 2016 will reach 49.93 million units, a year-on-year increase of 5.7%.

It can be seen from the published data that although the overall sales volume of the domestic color TV market shows an upward trend, the retail sales have declined, falling into a vicious circle of increasing volume but not increasing revenue.

Price competition leads to slim profits and increased operating risks

Reckless low-price competition is the main reason for the vicious circle of increasing volume but not revenue. Some manufacturers even sell TVs at prices below cost, and lose hundreds of yuan for each TV sold. This is no longer a new thing in the industry.
In the first half of 2016, the Chinese color TV market showed an embarrassing situation of volume growth and decrease in value, which was caused by the frustration of TV prices repeatedly hitting the bottom. Brand competition in the online market vowed to carry out the price war to the end. Low price has become the stepping stone for Internet TV to enter the color TV industry. High configuration and low price are almost a compulsory course for every Internet TV brand. Facing the attack of Internet brands, traditional brands have to attack, and the color TV market has fallen into the quagmire of low prices. According to AVC data, the average retail price of China's color TV market in the first half of 2016 was 3,020 yuan, a year-on-year decrease of 10.2%.

This situation actually began to emerge last year. In 2015, profits in the color TV industry generally declined, with the average net profit margin of companies being only 2.2%. The main business income only increased by 2.5% over the previous year. The low profits led to greater operating risks for color TV companies.

However, this does not affect the enthusiasm of enterprises for the color TV industry. In the first half of this year, brand competition in the color TV market has become more intense and fierce. On the one hand, foreign brands, especially Japanese brands, have reduced their business in China, and domestic brands have taken a dominant position; on the other hand, traditional brands and Internet brands have shown a situation of dual competition, and have launched a head-on confrontation from the online to the offline markets, with disputes arising one after another.

Facing the aggressive Internet TV brands, the days of traditional color TV brands are not as bad as imagined. The competition between the new and old color TV companies in the offline market can be described as "half sea water and half fire". On the surface, water and fire are incompatible, there will always be disputes and every inch of land will be fought for; in fact, in the future, mutual tolerance is necessary to expand the cake of the color TV market and get out of the situation of increasing volume and decreasing value.

Three connection points of TV industry business opportunities: products, channels, and users

The smart TV market is entering an era of great change, with traditional concepts colliding with modern thinking, content construction and hardware competing for supremacy, and ecological models versus loose alliances. Against this backdrop, Dong Min, general manager of the smart display and digital entertainment business group of AVIC Cloud Network, stated at the 2016 China Smart Display and Innovative Application Industry Conference that future business opportunities in the TV industry should be the three connection points of the value chain: products, channels and users.

The development direction of TV products in the future mainly includes the following four points: 1. Infinitely close to reality, with upgrades in borderless, UHD, HDR, high color gamut, large size and other technologies, bringing consumers a 1:1 real immersive experience; 2. Not existing in a fixed form, the home attributes and technological attributes of TV are constantly magnified. In the future, in order to adapt to the ever-changing home form, the appearance of TV will be more subversive and diversified; 3. A natural entertainment center, TV naturally becomes the core that can realize human visual and auditory enjoyment, and smart TV becomes the main entrance to the Internet of living rooms; 4. A smart home hub. As the most intelligent home appliance with the most interaction with users, TV has the ability to become the hub of a smart home.

The future development direction of TV channels mainly includes the following three points: 1. Close proximity to users. The combination of multiple channels eliminates the differences between various channels, thereby realizing zero-distance provision of the same high-quality services to consumers; 2. Real restoration of scenes. Experience the real restoration of shopping scenes. On the one hand, companies can have more diversified interactions with consumers. On the other hand, consumers can accurately obtain product information through experience; 3. Big data feedback. Through e-commerce websites optimized by big data and insights into physical store consumers, it can effectively promote purchase conversions, reduce operating costs, and improve the overall profitability of the company.

There are three main changes in TV users in the future: 1. Labeling of demands. Due to the different living environments of consumers, their lifestyles and values ​​are different, and their demands are gradually diversified and personalized. Consumers' product choices are a reflection of their lifestyles, life concepts and attitudes towards life; 2. Price is no longer the decisive factor. Price is no longer the main factor restricting the purchase of high-end products. 63% of consumers are willing to pay a maximum amount of more than 5,000 yuan for high-end home appliances; 3. The demand for interaction is released. Interaction provides consumers with a new consumption experience. It breaks the original two-way interaction between merchants and consumers and forms multiple interactions among merchants, consumers and consumer groups.

Products, channels and users are the three connection points in the television value chain. Products create value, channels deliver value and users realize value. It seems that every connection point in the value chain is important, but the position of the commanding heights of the value chain is always changing in each period. This is because new technologies are constantly emerging. New technologies allow more companies to have more opportunities to reach users, so the value of the user side begins to change. When the user's voice becomes louder and louder, it forces the product manufacturing side to start changing. The end result is that the commanding heights of the value chain are constantly changing.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.