Losing Competitiveness
Samsung Electronics and LG Electronics are struggling in China, which has emerged as the largest TV market in the world.
According to market research firm IHS on Feb. 15, Samsung Electronics’ share in the Chinese TV market in 2015 stood at 9.1 percent, down 0.2 percent point from a year earlier. LG Electronics maintained the same market share at 2.8 percent but LeTV knocked the company out of the top 10. Chinese top four TV brands, such as Hisense, Skyworks and TLC, accounted for over 50 percent of the total market share.
Considering the fact that the Chinese TV market is growing, Chinese brands are expanding their dominance in the market. Last year, total sales volume of the Chinese TV market reached 46.74 million units, up 4.8 percent from a year ago, and its sales figures also increased 8.5 percent to 157.2 billion yuan (US$24.2 billion or 29.24 trillion won). The ratio of 32-inch low-end products is decreasing, while that of TVs with 55-inch large displays is growing.
According to market research firm Tencent, the ratio of 32-inch TV products decreased 8 percent in the Chinese TV market, while that of 55-inch products rose 6.8 percent. An industry official said, “The prominent feature in the Chinese consumer market last year is that the demand of high-end products dramatically increased.”
Samsung Electronics and LG Electronics, which lead the global TV market, are struggling in the Chinese market since they failed to push into the online distribution market.
Some also say that Chinese government’s TV subsidy package is working to local firms’ advantage. It is not that the government is offering differential subsidies to foreign TV makers, but it is providing relatively high subsidies to low-end products. Accordingly, it is helping local TV makers, which focuses on low-priced products, grow. In fact, new companies, including Kukai, showed a remarkable growth last year.
Meanwhile, the Chinese TV market will grow further this year. KOTRA expects that the sales volume in the Chinese TV market this year will increase 1.4 percent to 47.39 million units and the sales figures will grow 2.5 percent to 161.1 billion yuan (US$24.8 billion or 29.97 trillion won), compared to last year.