TV Dark Horse
The landscape of the Chinese television (TV) market is rapidly changing in recent years. With the acquisition of U.S.-based Vizio, LeEco (formerly LeTV) has grown at a dazzling pace to make it to the list of China’s top five TV makers, shaking the market.
According to market research firm IHS on August 28, LeEco has dominated the Chinese TV market with an 11.7% share in the second quarter in terms of unit sales, following Skyworth (14.6%), Hisense (13.7%), TCL (12.3%), and Changhong (11.9%). LeEco, the fifth largest TV maker in China, saw its market share jump by a staggering 6.9 percentage points compared to 4.8% in the first quarter.
By contrast, all of China’s top three TV makers, Skyworth, Hisense, and TCL lost their market share. Now there is a gap of no more than 2.9 percentage points between the first and the fifth place in terms of market share.
LeEco, known as the Netflix of China as it offers video streaming and smart TV services in China, has recently taken over U.S.-based Vizio with US$2 billion, drawing much attention. Along with that, the company has increased the production of smartphones from five million units last year to 20 million units this year while taking aggressive moves such as making an investment of US$1.8 billion in building an electric vehicle production plant.
Recently the competition among local TV makers is getting fiercer due to the sluggish demand in the Chinese domestic market. The share of Chinese makers in the global TV market dropped to 28.9% in the second quarter from 31.4% in the first quarter.
In response, Korean TV manufacturers, including Samsung Electronics and LG Electronics, are expected to strengthen their strategies to secure profitability by promoting premium products, including Quantum dot SUHD TVs and OLED TVs. In fact, with the support of the strategy, Samsung Electronics exceeded 1 trillion won of the quarterly operating profit for the Consumer Electronics Unit in the second quarter in seven years. And LG Electronics also hit a record high of 8.6% at the operating margin for the devision of Home Entertainment.