Traditional manufacturers need Internet thinking to survive the winter. LeTV may become the sixth largest domestic home appliance giant

The national economic growth rate has slowed down, the overall industry has become weak, and users' willingness to buy has declined... The general background of the times has driven the traditional color TV market to start a downward trend in 2014.

Recently, Aowei Cloud Network released the annual report of China's color TV market in 2014. The report shows that in 2014, the retail volume of color TV in my country was 44.61 million units, a year-on-year decrease of 6.6%, and the year-on-year decrease in 9 months of the year; the retail sales amounted to 146.2 billion yuan, a year-on-year decrease of 14.5%.

Apart from the fact that the entire traditional color TV market has been caught up in the industry's "cold air" mainstream, the warm current brought about by the Internet boom seems to have restored a glimmer of hope to the color TV market that is in crisis.

Aowei data shows that the online market retail volume of the color TV industry in 2014 was 7.87 million units, accounting for 18% of the overall market, a year-on-year increase of 79%; at the same time, the market share of Internet brands increased from 0.14% to 6%, while the market share of traditional brands dropped to 94%.

Internet brands are emerging

Before 2014, the statistical reports on the color TV industry have always been centered around the five traditional TV manufacturers: Hisense, Skyworth, TCL, Konka, and Changhong. It can be said that these TV manufacturers are the entire presentation of the traditional color TV market.

However, with the rise of Internet companies represented by LeTV and Xiaomi in the past two years, especially these Internet companies' extreme optimism about the home appliance market and their full involvement, the traditional color TV industry has begun to become less "traditional" and gradually follow the trend of the Internet era.

According to the industry data report released by CITIC Securities recently, by the end of 2014, the seven major TV manufacturers in my country (Hisense, Skyworth, TCL, Konka, Changhong, LeTV, Xiaomi) had created a cumulative sales volume of 31.1 million smart TVs. Among them, LeTV and Xiaomi consolidated the important position of Internet companies in the home appliance market with annual sales of 1.5 million and 300,000 units respectively.

In particular, LeTV, which switched from content services to smart TV hardware production, achieved its 2014 annual sales target of 1.5 million super TVs a month ahead of schedule. With the annual sales target of 4 million super TVs set for 2015, LeTV may become the sixth largest color TV giant in China.

With the entry of Internet companies such as LeTV and Xiaomi, the new profit model of the Internet era, which combines software and hardware, has also pushed the price of the entire color TV market down to the low end. According to Aowei data, TV products priced below 3,000 yuan are very popular, and their market share continues to increase. By the end of 2014, they had occupied 60% of the market share.

At the same time, smart TV products, which are being developed by Internet companies, have begun to become the mainstream products in the color TV industry. In the color TV sales market in 2014, the penetration rate of smart TVs has reached 58%, an increase of 14 percentage points.

Can tradition outlast the times?

There is no doubt that the Internet era has revolutionized the traditional color TV industry. Aowei predicts that the retail volume of the color TV industry in 2015 may be 44.1 million units, a year-on-year decrease of 1.1%, and the retail sales may be 137.1 billion yuan, a year-on-year decrease of 6.2%.

At the same time, the total volume of China's online color TV retail market will exceed 10 million units for the first time in 2015, reaching 10.2 million units, accounting for 23% of the overall market. The proportion of mobile payments in the color TV industry will also increase from 19% in 2014 to 40% in 2015.

When smart TV products from Internet companies entered the market, brand-new color TV products also brought a brand-new online sales model into the color TV industry. Take LeTV as an example. The single online sales channel saved all the expenses included in offline store sales for super TVs, and made it truly realize the so-called "twice the performance, half the price" product promise.

As the entire color TV industry is facing a cold winter, traditional TV manufacturers have also begun to embrace Internet thinking and pin all their hopes for business development on Internet transformation.

In this regard, Yang Dongwen, President of Skyworth, said, "The most important revelation brought by the entry of Internet companies is the business model. They have made traditional color TV companies further realize the value behind the color TV screen."

Li Dongsheng, chairman of TCL Group, reflected: "The biggest problem of traditional color TV companies is that they have no users. After the TVs are sold, they are no longer connected with consumers."

In contrast, Internet TV products represented by LeTV rely on the LeTV ecosystem of "platform + content + terminal + application", adopt the dual service model of "hardware + content", take user experience as the basic starting point for product development and service provision, and cultivate user stickiness through a combination of software and hardware, thus achieving sustainable development of products and enterprises.

In the prediction and observation of the color TV industry market in 2015, the optimism and recognition of the rural market just confirms the foresight of LeTV's announcement of the LePar Super Partner Program in August last year. Bypassing the traditional home appliance marketing era of spending money on advertising and occupying stalls in stores, the advent of the Internet thinking era may help the color TV industry survive the test of the cold winter.

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.