LeTV is becoming the biggest winner of Internet TV
Recently, Internet TV brand Xiaomi TV announced at a media event held in Beijing that its 32-inch millet TV 4A had a price reduction of 200 yuan to 999. This is the latest time that it has taken a price cut this year. With its price advantage, Xiaomi is continuing to gain market share. The loser is naturally another Internet TV brand - LeTV.
LeTV is the biggest winner of Internet TV in the past few years. In 2016, shipments reached 6 million. Its ability to grab market share from traditional TV companies has an important bearing on its strategy of lowering the cost of production. However, since LeTV began to face financial problems last year, it began to suffer a greater impact in the television market.
In the third quarter of last year, LeTV reversed its previous strategy of lowering the cost of mass production and continued to increase the price of TV products. In contrast, tit for tat is that Xiaomi continuously responded to price cuts. For users, it is obvious that price reduction is a very attractive measure. As a result, Xiaomi's TV shipments have risen in a converse manner.
The data released by Ovid Cloud Network in the first half of this year showed that Sharp, TCL, and Xiaomi have increased their market share in the global TV market. Their market share increases were 72.7%, 20.8%, and 66.7%, respectively. This is the first time that Xiaomi has reached the global TV TOP15 brand. What is interesting is that Sharp and Xiaomi, with their huge market share growth, are all pursuing price cuts to grab the market.
Most of Xiaomi TV's shipments came from the domestic market. The rapid growth in its shipments was a result of the decline in shipments of LeTV, China's largest Internet TV brand. According to data from Ove Cloud Network, LeTV's global market share in the first half of the year fell by nearly 50% year-on-year, making it the highest decline among the global TOP15 TV brands.
Some analysts believe that the loss of LeTV's market share is in addition to Xiaomi's share. The biggest beneficiary is Sharp. Sharp’s plan to resurrect Sharp TV was acquired last year after it was acquired by Hon Hai in Taiwan, China. Its key offensive market is China’s largest TV market in the world. Sharp’s TV price cuts 20% to 30% in the Chinese market earlier this year. The fierce offensive is obviously very effective in view of the increase in market share.
However, Hon Hai also provided considerable financial pressure to support Sharp TV continuing its fierce price war to snatch the market. Its second-quarter results showed that net profit fell by 36% month-on-month, albeit from a year earlier. 4.1%, but in the second quarter of 2016, it was actually 31% lower than the same period in 2015, which also made people wonder whether Hon Hai will endure this kind of profit decline and continue to support Sharp TV's price war.
Xiaomi has always been willing to tolerate low profits in exchange for market share growth, and to compensate for the low profit of the hardware business through the growth of the Internet business. From the perspective of the rapid growth of its Internet business in 2015 and 2016, this model is quite feasible. Sex, the world’s second-largest smartphone company, Apple currently also focuses on the development of Internet business.
The Double 11 shopping festival initiated by Alibaba has become an important sales season in China. Millet chose to reduce the 32-inch TV to 999 yuan at this time, which is almost the lowest price of the current 32-inch TV, and 32 inches for other traditional TV brands. TV prices are almost all at 1050 yuan or more, which undoubtedly highlights the price advantage of Xiaomi TV.
According to data from Ove Cloud Network, the global market shares of LeTV and Xiaomi TV in the first half of this year were 1.4% and 1.0%, respectively, and the gap between the two was further reduced. Recently, the person in charge of television said that the third quarter of this year increased by 144% year-on-year, hitting a new quarterly increase in the first three quarters of this year. Today, once again, the price reduction of Xiaomi TV will help it further gain more market share. Perhaps this year it will be able to surpass LeTV. !
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