China's television manufacturing industry is struggling, with narrowing profits caused by declining sales and increasing producing costs, forcing TV makers to seek opportunities in the high-end market.
In the first half of 2017, the net profit margin of China's TV manufacturing industry came to less than one percent, according to information from a press conference by China Video Industry Association (CVIA) and industry service provider All View Cloud.
Smartphones are replacing television sets
People are shifting from watching content on traditional television sets to using their smartphones for everything.
The country now has 488 million people using mobile phones to watch videos, with movies, TV shows, entertainment shows and news being their favored choices respectively.
Chinese nationals spend an average of three hours a day on their smartphones, ranking second in the world after Brazilians, who spend two additional hours on their phones, according to a survey by a German Internet company.
Rising costs push TV makers towards high-end market
The industry's plight comes against a backdrop of shrinking sales and surging costs of related materials. In the first six months, domestic retail sales of television sets went down 7.3 percent year-on-year to 21.81 million units, while exports stood at 26.62 million units in the first five months, down 6.1 percent.
Ren Guanjun, senior vice president of communications and marketing at Letv, attributed the sluggish market not only to China's economic slowdown and tightened property sales, but also to the low-price competition among market players.
Prices of panels, a key component of the TV set, have jumped more than 40 percent since last year, piling further pressure on manufacturers.
The difficulties have forced TV makers to rethink their strategies and put more focus on the medium- and high-end market.
Given the mismatch, there are still huge opportunities for producers if they can step up efforts to tap unmet demands, Peng said.