The strong supervision and low profit of the OTT box means that it can only be a stepping stone to the living room entertainment market. In 2018, the sales volume of the OTT box market fell back to less than 10 million units and entered a sustained downturn. According to RUNTO data, China's OTT market sales in 2021 were 4.84 million units, down 15% year-on-year; market sales were 0.4 billion yuan, down 23% year-on-year.
Changes in the overall market sales of OTT boxes in China from 2011 to 2021
Source: LOTTO, unit: 10,000 units, %
Online promotion is difficult to withstand the "downturn" dilemma
According to RUNTO's latest "China OTT Box Online Retail Market Monthly Tracker" report, China's OTT box online market sales reached 2.54 million units in 2021. From a monthly point of view, in addition to January and February stimulated by the traditional Spring Festival homecoming tide, the overall sales volume driven by the sinking market reached more than 250,000 units, the sales volume in other months was basically 200,000 units, even if the 618, double 11 and double 12 such big promotions or brand daily sales strategies and various promotional activities did not bring about an increase in market sales.
Monthly sales of OTT boxes online market in China in 2021
Data source: LOTTO online data, unit: 10,000 units
The market is constantly regulated and the concentration is high
Before 2014, due to the openness of the Android system, there were a large number of copycat box brands in the market. In 2014, in order to regulate the market, the State Administration of Radio, Film and Television issued a number of documents, followed by the introduction of a number of policies to clarify the operation and supervision mode of the OTT box market, and the cottage brand was gradually eliminated due to the inability to obtain content authorization, and the mainstream brand began to take the position.
According to the online data of LOTTO Technology (RUNTO), the CR4 of the OTT box online market in 2021 will reach 68.7%, which belongs to the high concentration and oligopoly market (65% of the top 4 brands Xiaomi, Tmall Magic Box, Tencent, and Dangbei, with market shares of 28.1%, 20.5%, 14.1% and 5.9% respectively).
Brand share of China's OTT box online market in 2021
Source: RUNTO Online Data, Unit: %
Product upgrades to continuously meet the needs of consumers in multiple scenarios
In the 5G era, the characteristics of high speed, high broadband and low latency have changed people's habits of enjoying entertainment and audio programs, and consumers are more eager to get ultra-high-definition video viewing experience. OTT box in the product configuration continues to increase, to ensure the current price segment of the mainstream product trends, such as 4K resolution has become the mainstream. According to the online data of LOTTO Technology (RUNTO), 4K resolution accounts for more than 80% in 2021.
Clarity structure of China's OTT box online market in 2021
The function of the OTT box is much more than "seeing", but also interaction. The addition of voice technology and cameras extends the functions of the OTT box infinitely, bringing more scenes to the possibility. According to the online data of LOTTO Technology (RUNTO), in 2021, the sales volume of products equipped with near-field voice functions will reach 49.5%, far-field voice will account for 0.4%, and the share of products equipped with camera functions will be 0.4%. Far-field voice and cameras are still mainly used in high-end products, and the penetration rate is still low.
OTT box sales are expected to be 4.35 million units in 2022
In the case of the gradual popularization of smart TVs and the emergence of emerging categories such as smart screen throwers, the living space of OTT boxes has been squeezed. In the absence of major innovative technologies and obvious stimuli, the development of OTT boxes will not improve for the time being. However, OTT boxes are still important home entertainment terminals, first of all, as a tool for TV Internetization, there are still more than 200 million CRT TVs in China; secondly, OTT box manufacturers continue to keep pace with the times, while upgrading hardware, they are also exploring special functions, such as games; finally, OTT box application scenarios expand from home entertainment to video, office, fitness, etc., and integrate into the smart home ecosystem in the future, connect with other smart devices, and still have a place in the short term. RUNTO predicts that OTT box sales will reach 4.35 million units in 2022, down 10.1% year-on-year.
More content and other categories are available in "Capturing the Ten Millions of Living Room Hardware Outlets: 2021 China Living Room IoT Smart Device Development White Paper".
RUNTO's "China OTT Box Online Retail Market Monthly Tracker" report contains monthly updates on retail sales data on the size of retail volume, channels, brands, and product configurations in the online market, as well as best-selling models and price trends.