Depth Analysis: Hisense TV's 5 challenges and 4 opportunities

Into the 2014, Skyworth, TCl, Changhong and Hisense representative of the traditional home appliance enterprises, there are different degrees of profit decline. Let's look at a set of data, the latest home appliance business earnings:

1, Hisense TV, 2014-year net profit of 460 million yuan (down 8% year-on-year).

2, Skyworth TV. 2013 net profit of HK $1.254 billion, down 16.5% year-on-year.

3,TCL TV. 2013 multimedia is in a loss state.

4, Changhong TV. The first quarter net profit 9.2326 million yuan, fell 93.75%

In the field of home appliances in China, Hisense, Skyworth, Tcl is the traditional three-strong home appliances, annual shipments in tens of millions of units scale. This corresponds to the fact that the Internet companies that music represents are on the market and in the capital markets. In the television arena, different business models are being differentiated because of the internet age, where these vendors are facing new challenges:

Frankly speaking, Hisense Group faces a lot of problems, and, these are the traditional household appliances business, and most of the current seems to be no solution. Focus on the following:

1, Internet manufacturers how to deal with the price shock of suicide. A hisense Channel business told Rui Observation, no matter how to brag about their ecosystem, the real first time to impress consumers or prices, music should be the sale of the contents of the money to subsidize the hardware. But similar to Hisense such people do not produce content manufacturers, how to achieve low prices?

2, line online under the integration of channels, is a big trouble

In fact, this is a problem in front of all the traditional appliance manufacturers. The electric business channel is a big trend, this is everybody can see, however, the line is under the channel cost control is different, how to comb the line on-line below the channel is a huge problem. If the traditional channels of water, the traditional home appliances manufacturers will be fatal damage.

One interesting thing is that Le Vision is also at the beginning of the layout line channel. Le view of the practice is to find a home appliance channel agents, give them a pleasure to see the name of a certain office, and then let them in the traditional channels of television sales.

3, the establishment of new business model is still unclear

For the traditional home appliances manufacturers represented by Hisense, they are still walking in the narrow alley of making money from the hardware. In the words of a Hisense channel business, everyone is watching the jokes, 2 years later, do you still buy the list of content? If we buy it, we will prove that le-vision is right and we have to follow up.

However, in some marketing aspects, Hisense Group has begun to learn from these internet manufacturers. For example, prior to Hisense is no user and the concept of fans, only the concept of consumers, in addition to after-sales service center, it is difficult to link Hisense and sales of products. In addition, similar to pre-sale, 0 yuan booking, snapping up these new play, Hisense was not before, now, Hisense is completing this aspect of the short plate.

4, the content of the short board, is the strength is also avoid the mishap

A household appliance analyst, who declined to be named, said that the content of the short board for Hisense, is a double-edged sword, its advantage is that it will not and content providers rob the market, so even if the music, also willing to distribute the content to Hisense. One of the most obvious examples is that Hisense has assembled 11 video sites to become China's largest content provider in Hisense Television.

But whether this pattern can be long or hard to say. If other content providers go the same way as the music, then it is difficult to ensure that, under the interests of the content provider cut off and the content of Hisense cooperation and do their own hardware? If users have developed a reliance on Internet video content, it is dangerous for Hisense.

5, Capital market valuation is low, difficult to make a difference in mergers and acquisitions

The anonymity of the household appliances analysts said, simply from a latitude to evaluate the success of a home appliance manufacturers failure is unfair, for example, he has been successful? No, at least he is a supporting actor in the sales and earning power of the home appliance market, but the company has indeed won in marketing and capital markets.

A listed company like Hisense has a very low P/E and a low valuation of its companies. The reason is that the investment bank is based on the number of products produced by these companies, and the company is based on the number of users to calculate valuations. This means that the listed companies do not have enough money for acquisitions, such as the acquisition of video sites.

Of course, in spite of these difficulties, for Hisense, it does not mean that the company should be completely into the downward trajectory, because the company has its unique competitiveness, mainly reflected in 4 areas:

1, the volume of Hisense is larger. This has the scale effect, so Hisense in the upstream industry chain negotiations with a sufficient right to speak. For Hisense, to maintain good profitability, one of the important reasons is to be able to achieve cost control.

Hisense Channel dealers told Rui Observation, the reason for the channel system of Hisense is not impact, the reason is that the volume is too small, less than million shipments. In addition, early-stage hunger marketing may be preheating the market for pleasure, but it is a problem if the factory can meet its capacity after the music vision is done.

The above dealers cite an example, in the Chinese automobile market, Santo that was very popular, from the first-tier cities to the township market, but the assembly line is not produce so many products, so, other car manufacturers also have the opportunity, such as Beverly. Home appliance Market is similar, this is a huge market, music depends on the hardware does not make money, resulting in the factory also earn less than a few money, in this big background, whether there is a generation of factories to provide its annual millions of or even tens of millions of products, to play a question mark.

2, Japanese manufacturers to rout, to the Chinese and Korean enterprises in overseas left a chance

Compared to the domestic market, Hisense has grown rapidly in foreign markets, especially in North America and the Middle East. An important reason is that the Japanese television manufacturers in the global rout, which is committed to the global market, the Chinese and Korean enterprises to create opportunities, Samsung, LG, Hisense, Skyworth and TCL are among the beneficiaries.

3, high profit margin so that Hisense Group has sufficient cash reserves

Unlike the music, Changhong, Tcl and Skyworth, Hisense TV has maintained a good profit margin, which can be seen in the financial results. In China, there has always been a cash-for-king claim that the high profit margins have allowed Hisense to have enough money to support its own research and development to take a road to learning Samsung TV.

4, good relationship between the government and business

Hisense's major shareholder is SASAC, which means that after the regulations or policies related to home appliances come out, Hisense can actively participate in the first time.

Conclusion: Hisense is a representative of the traditional home appliance manufacturers, is facing a series of seemingly no solution to the problem. But the development of these enterprises in the short term is not subject to much impact because of the dozens of years ' hard work in the Home appliance field. But if not solve the above 5 core appeal difficulties, Hisense representative of the traditional home appliance enterprises, will be dangerous.