The proportion of the five-tier color TV market has increased, and independent channels have become the dominant

After more than five years of large-scale stimulus policies, China's flat-panel TV market is experiencing its most difficult time in the past three years, along with the upgrading and transformation of the entire Chinese economy, the gradual exhaustion of the demographic dividend and the arrival of the "Lewis turning point". According to GfK China's national retail estimates, from January to May 2014, China's flat-panel TV market retail volume was 17.65 million units, a year-on-year decrease of 6%, of which the offline market was 15.76 million units, a decrease of 9% to a historical low.

Standing at the crossroads of economic structural transformation, many color TV manufacturers have tried new profit models and launched new technological products, striving to explore an effective development path in the "post-policy era".

The potential for the 5-level market to increase in proportion is huge

Looking back, the policy of bringing home appliances to the countryside , which lasted for more than five years , has helped color TV manufacturers to expand their channels while greatly increasing the enthusiasm of consumers in the low-level market, especially in the 5th-level market, to buy TVs. With the gradual development of brand awareness and consumption concepts, the market scale has been initially formed. (GfK divides the color TV offline market into 5th-level markets for rural and suburban markets, and 4th-level markets for 186 prefecture-level cities and 14 county-level cities)

According to GfK China's national retail estimates, from January to May 2014, the total retail volume of flat-panel TVs in level 4 and 5 markets reached 10.88 million units, of which 7.56 million units were sold in the level 5 market, accounting for 48% of the national offline retail market, up 2 percentage points from the same period last year. The urban market was affected by the overdraft consumption caused by the policy in the same period last year, and its proportion has declined significantly from January to May this year. If the consumption overdraft caused by the energy- saving subsidy policy on the urban market is obvious, then the rural market, thanks to its own special channel structure, has been relatively less affected.

In terms of year-on-year growth rate, according to GfK China's national retail estimation data, from January to May 2014, the retail volume of flat-panel TVs in the Level 5 market fell by only 4% year-on-year. It is worth mentioning that the Level 5 market achieved a positive growth of 2% year-on-year in May. In terms of subdivided months, the Level 1 to Level 3 markets, which have a high proportion of home appliance chain channels and a large economic scale, have seen a severe decline in June and July since the year-on-year decline peaked in May 2013. With the arrival of the traditional promotional peak season, the Level 1 to Level 3 urban markets have shown a fluctuating growth situation, while the fluctuations in the Level 4 and Level 5 markets are much more moderate.

Independent channels lead e-commerce to accelerate penetration

The rapid development of urbanization in recent years has provided a good external environment for the channel construction of the home appliance industry. However, the unique channel structure of the 5-level market has also brought a lot of trouble to the channel integration and optimization of major manufacturers. Compared with the urban market with relatively complete channel construction, standardized business management, and home appliance chain channels as the main channels, the 5-level market mainly relies on independent store channels with strong dispersion and dominated by individual merchants for sales, and the number is extremely large. According to GfK China's national offline retail estimation data, from January to May 2014, the proportion of independent store channels in the rural market retail volume was as high as 58%, which was in sharp contrast with other channels.

The channel structure of China's rural flat-panel TV market is formed by scattered individual merchants and regional home appliance chains. However, with the hot sales of smart phones around the world, "mobile Internet" is sweeping across China like a prairie fire. Using mobile phones to surf the Internet and shop has gradually become a trend, which is also gradually affecting the flat-panel TV market. The number of people using mobile phones to surf the Internet in China is gradually increasing. According to the latest data from the Ministry of Industry and Information Technology, as of the end of May, the number of mobile Internet users in China has reached 800 million. Against this backdrop, major e-commerce companies have accelerated their investment in self-built logistics systems and gradually expanded their distribution range. While further sinking their own channels, they have also brought new development opportunities to many color TV manufacturers. How to reasonably cooperate with e-commerce companies, use differentiated product strategies, give play to the synergy between online and offline, and improve the logistics and distribution system will be a powerful tool for penetrating low-level markets in the future.

Product structure and urban market convergence

Different from the difference in channel structure, with the continuous acceleration of China's urbanization process, it has not only driven the continuous increase in demand for flat-panel TVs, but also made the 5-level market, which originally had relatively weak consumption capacity, continuously upgraded, prompting the consumption concept of the 5-level market to gradually align with the urban market, and the product structure has gradually converged with the urban market. With the continuous decline in upstream panel prices and the vigorous promotion of manufacturers, large-size and ultra-high-definition TVs have not only achieved good results in the urban market, but also made a good start in the 5-level market.

According to GfK China's national retail estimates, the large-size flat-panel TVs in the Level 5 market are developing rapidly. From January to May 2014, the retail volume proportion of large-size TVs of 50 inches and above increased by 9 percentage points to 22% compared with the same period last year; at the same time, the retail volume proportion of ultra-high-definition TVs in the Level 5 market reached 8%, and the retail sales proportion reached 14%. The concept of premium consumption has not only been popularized in the urban market, but also has been well inherited and developed in the Level 5 market.

It can be said that the urban market, as a weathervane of the 5-level market, has played a good guiding role in the technological innovation and product upgrading of the entire flat-panel TV industry. It is believed that in the future, with the accelerated urbanization of small and medium-sized cities and the implementation of the household registration system reform, the gap in product structure between urban and rural areas will be further narrowed, consumption concepts will be further converged, and the development space of large-size and ultra-high-definition TVs in the rural market will be further improved.

Foreign brands are expanding into low-end markets

Thanks to years of hard work, domestic brands have occupied an absolute dominant position in the 5-level market. According to GfK China's national retail estimation data, from January to May 2014, in the 5-level market, the proportion of domestic brands' retail volume was as high as 89%.

On the other hand, unlike the absolute advantage of domestic brands in the 5th-tier market, foreign brands have recently entered the low-tier market and have achieved good performance in some 4th-tier cities with relatively developed logistics and distribution and a high proportion of regional home appliance chain channels. From January to May 2014, the proportion of retail volume increased by 3 percentage points to 18% compared with the same period last year. With the penetration of foreign brands into the low-tier market, the competition pattern will also change. For domestic brands that have an absolute advantage in the 5th-tier market, the era of extensive management of occupying mountains and encircling land is about to end. Compared with the almost fierce competition in the well-developed urban market, the 5th-tier market, which has not yet been fully developed, will attract foreign brands to go deeper. How to quickly understand market changes and cater to consumer needs will become the key to the future development of the low-tier market.

In the first half of 2014, the Chinese color TV market was affected by the policy overdraft in the same period last year. The overall market performance was bleak, but there were also bright spots. The counter-trend growth of the low-end market in May gave us new hope for the future of the market. According to the national retail estimation data of GfK China, among the 11 provinces covered by the Yangtze River Economic Belt, the sales of flat-panel TVs accounted for 40% of the national market, among which the counter-trend growth of the low-end market in the central and western regions was particularly prominent in recent times. It is foreseeable that regional development will become the main theme of my country's future economic development, and the flat-panel TV market will certainly follow this trend and burst out more potential in some low-end markets with larger economic scales.

At the same time, with the continuous advancement of new urbanization and the implementation of household registration system reform, the consumption gap between urban and rural areas will be further narrowed. The resulting upgrade in consumption structure will make the product structure of flat-panel TVs more similar to that of the urban market, and brand awareness will gradually penetrate into the hearts of the people. Against this background, competition will become more intense, and the Chinese flat-panel TV market, with both opportunities and challenges, is worth looking forward to.

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.