Text / Lu Shiming
Edit / Gale
Recently, Sichuan Changhong disclosed that the 2021 annual report pointed out that the company achieved operating income of 99.632 billion yuan during the reporting period, but the net profit attributable to the shareholders of the listed company was only 285 million yuan, and the profit margin was only two thousandths. At the same time, the gross profit margin of sales also fell to 9.97%, down 2.32% year-on-year.
Changhong has long been familiar with the TV business, but from the latest financial report, its TV business revenue accounted for only 14.12%, far lower than the air conditioning, refrigerator business, which shows that Changhong's own TV business has experienced a serious recession, and the aura of the former "color TV king" is getting farther and farther away.
The change of product status is always accompanied by the transformation of player roles, and the strong entry of many Internet companies has redefined color TV while also breaking the industry pattern. Those who failed to conform to the "choice of the times" of the former color TV giants reluctantly walked off the altar, and the momentum of "weakening" is still continuing with an unstoppable trend.
What can be seen is that the giants of the past, Such as Changhong, Konka and Skyworth, are struggling for the final and trying to retain their former dignity. But how can a former frontrunner be a good follower? Obviously, at a time when most industries are approaching saturation, the "Changhong" who are caught in the quagmire of transformation can no longer win the dignity and glory of the past.
Declining home appliance giant
In the 1980s and 1990s, television sets were important household appliances, and the rising demand made some market players, among which Changhong, Konka, and Skyworth also became the head brands of traditional home appliances.
In the home appliance market at that time, the status of these brands was no weaker than that of Mercedes-Benz, BMW, and Audi in the automotive track. However, unlike the fate of Mercedes-Benz, BMW, and Audi, the glory of traditional home appliance giants comes quickly, but the decline comes faster.
Among them, Sichuan Changhong is one of the representatives of traditional home appliance brands.
Compared with other color TV brands, the military factory transformation of Changhong color TV as early as 1970 began to develop, production, after experiencing the wave of reform in 1978, Changhong played its own brand, since 1989 Changhong economic indicators for many years in the same industry in the country ranked first. At the top of the list, Changhong sat for 20 years.
In 1997, after Changhong was listed, it took less than a year for the market value to quickly break through to 59 billion, becoming the leading stock of home appliances at that time. Since then, it has even reached the point where investors can see the stock price of Sichuan Changhong and know that the Shanghai Securities has risen or fallen. The huge "success" of the secondary market has also been quickly transmitted to the terminal market, "for every three color TVs sold, one is Changhong." "In 1997, the market share of Changhong color TV was as high as 35%.
Under the highlight, almost no one in the country does not know "Changhong", and every household is proud to have a Changhong TV. However, historical experience proves that the highlight moment of the enterprise needs more crisis awareness, but unfortunately, Changhong does not seem to understand this truth. In the following years, Changhong began a "price war" one after another, seizing the market at an ultra-low price and disrupting the market.
With the upgrading of consumption, in the condemnation and suppression of many color TV companies, consumers began not to buy Changhong's account. In a hurry, Changhong, who has no experience in foreign trade, set its sights on overseas, and as expected, Changhong suffered serious losses in overseas markets. Since then, Changhong has gradually lost and widened the gap with other competitors.
At present, Changhong, which was once invincible and has the aura of "color TV king" on its head, has only a market value of about 12 billion yuan, and its stock price has fallen from the highest point of 14.64 yuan per share to more than two pieces. According to the 2021 China color TV sales ranking released by Aowei Cloud Network, Sichuan Changhong currently ranks 6th, with a market share of 7.55%, and the gap with the top five sales giants is increasing.
【Source: Snowball】
In order to survive better, over the years, the declining Changhong has sold its own buildings, transferred subsidiaries and sold shares...
But later the facts told people that it was not only Changhong that fell, but the entire color TV industry fell. The good times are not often there, the flowers are not hundreds of days red, and those well-known color TV brands have finally fallen under the impact of the times.
For example, Konka, which pulled Changhong down in 1999, after experiencing the glory of "ranking first in national color TV sales for five consecutive years", in the era when television began to upgrade from CRT to LCD and flat-screen TV, it still threatened to do CRT for another ten years, and the result was a decline. For another example, as China's earliest OLED TV entrant, All in OLED Skyworth in 2013 after the highlight, it gradually fell out of the first echelon of color TV, from the domestic sales volume and market share in recent years, Skyworth is entering the marginalization ...
One view is that the decline and failure of color TV giants is a wake-up call for companies that are in the process of growing prosperity.
Unrecoverable increments, unstoppable intrusions
In fact, from today's point of view, the decline of these declining color TV giants is not entirely due to their own reasons.
The rapid development of social and economic development, all kinds of technology followed, the emergence of mobile phones made people no longer feel ecstatic because they had a TV set, and the addition of Internet players caught the "Changhongs" off guard. The torrent of the times always drowns some products that do not belong to this era, and color TV is one of them.
Around 2013, with the mass popularity of smartphones, the entire color TV industry was affected. According to the data of various statistical platforms, around 2016, the operating rate of mainland TV sets was still about 70%, and after three years, the operating rate was only a pitiful less than 30%.
According to the data of Aowei Cloud Network, the mainland TV sales in 2020 were 44.5 million units, down 9.1% year-on-year; sales were 120.9 billion yuan, down 11.7% year-on-year. By 2021, the market retail volume of the mainland color TV industry will fall to 38.35 million units, reaching the lowest level in 12 years.
【Source: Huajing Industry Research Institute】
Compared with the end of the last century, the technology of color TV has developed by leaps and bounds, but the answer to the problem is obvious why the market has not developed by leaps and bounds of technology.
With the large number of popularity of smart phones and PCs, the pace of life has accelerated, the way consumers watch videos has begun to migrate from the TV side to the mobile end, people's entertainment methods and ways of obtaining information are becoming more and more diversified, and they can obtain content anytime and anywhere, from the normal state of "watching TV" to the era of "playing mobile phones".
Small screens replace large screens, and today's color TVs have gradually changed from functional appliances to furnishings that are also used to "decorate" families, and many young people may not be able to turn on once a month or two after buying a TV. At the same time, young people also prefer alternative products such as projectors, which are not only larger and more portable, but also do not occupy a position.
Color TV has already entered the stage of the stock market, which is an indisputable fact. In such a market environment, traditional color TV brands have not found a new "incremental" point, nor have they grasped the development opportunities brought by consumption upgrades, and they have been eliminated by the market and are already doomed to be mostly doomed, while the other half is the emergence and influx of new players after the advent of the Internet era.
Also around 2013, under the theory that "TV is the core screen second only to mobile phones", LeTV entered the color TV industry under the banner of "Internet TV". After LeTV came on, it imitated the "cost price" playing style of Xiaomi mobile phone that year, and publicly declared that "selling a TV loses 400 yuan, the larger the size, the more it loses", pushing the price war to the extreme.
After LeTV, based on the same theory, Xiaomi also stepped into the track.
In September 2013, Xiaomi released the first generation of TV products and officially entered the color TV market. At that time, Xiaomi positioned the first 47-inch 3D smart TV as "the first TV for young people", priced at 2999 yuan, at that time, this price to buy a traditional brand, can only buy a 40-inch. With the advantage of "extreme cost performance", Xiaomi TV has quickly won the recognition and support of consumers, especially rice noodles.
【Source: Xiaomi Home】
In the following years, the major mobile phone manufacturers on the AIoT intelligent field of competition has become more and more fierce, in addition to Millet, Glory, Huawei, OPPO and other mobile phone brands have launched their own TVs, as the core products in the intelligent ecosystem, the main price war, self-developed technology, high-end products and other strategic directions. In addition, veteran mobile phone brands such as Realme, OnePlus, Nokia, and Motorola have also updated new smart TVs overseas.
Compared with traditional color TV manufacturers such as Changhong, Konka, skyworth, mobile phone manufacturers understand the pain points of consumers better, and use their own technical advantages, user advantages, and brand influence to create a business model of home entertainment terminal platform, which has won consumer recognition and has also distanced themselves from traditional color TV manufacturers.
In 2021, Xiaomi topped the List of China's color TV market with nearly 9 million units shipped.
It is believed that as major mobile phone manufacturers continue to enter the color TV industry, the impact of traditional home appliance brands will also bring more fierce competition, and a new round of reshuffle has begun to be staged.
Transformation is a muddy road
In the increasingly harsh market environment, there is not enough technology to develop new growth points, and there is no strong enough marketing ability to compete with the head players, then the layout transformation has become the best choice, and the "Changhong" has long been aware of this and embarked on a difficult transformation journey.
But the question is, how do you transform? What transformation to take? What is the direction of the transformation? These issues will be topics that deserve long-term attention. Judging from the current transformation of several, they do not have clear answers and obvious results.
In the case of Changhong, in fact, as early as 00 years ago, it opened the road of diversification, such as batteries, air conditioners, and even entered the mobile phone and IT product industries in 2005. After 2008, it entered the hot real estate industry. In 2017, Changhong launched the smart home application solution, expanding five business directions such as intelligent control, security, big media, energy, and health.
I have to say that these tracks look quite promising, but unfortunately, Changhong's diversification road is a mess.
According to its annual report, as of the first half of 2021, Changhong ICT products ranked first in Sichuan Changhong's revenue with 18.764 billion, however, the gross profit margin was only 2.58%, which was the lowest proportion of gross profit margin among all businesses. In addition, the gross profit margin of traditional home appliances such as air conditioner refrigerators and TVs is not prominent, but instead of real estate, special business, system engineering, etc., the gross profit margin accounts for 28.75%, 31.34%, and 31.93% respectively.
It can be seen that Changhong not only did not do a good job of transformation projects, but also dragged down the originally bad color TV business.
Like Changhong, the declining "aristocrat" Konka has also tried to take the transformation route of "diversification" in the past decade, getting rid of the status quo of relying on a single color TV product. According to public information, Konka has been involved in a large number of projects such as real estate, intelligent manufacturing, new energy, and health...
Starting from the establishment of Kangxinwei Company in 2018 to formally develop chips, in 2019, it invested 1.082 billion yuan to set up a sealing and testing factory in Yancheng. The first chips were already delivered in mass production in December 2019, but the price was not high and did not bring much revenue to Konka. In 2021, the semiconductor business will only have revenue of 322 million, accounting for less than 1% of total revenue.
This also means that Konka wants to rely on its own low R & D investment semiconductors to achieve curve overtaking, which is obviously unrealistic, after all, semiconductors need large-scale and lasting high R & D investment to have a return. Konka's new industry is more like a dragonfly, it has not formed a scale advantage in the industry, the operation is not ideal, and the profit margin is low.
In addition to Changhong and Konka, Skyworth, which has seen the decline of the color TV market, has also begun to explore more revenue channels. At present, Skyworth Group has four revenue modules: multimedia business, intelligent electrical appliances, intelligent system technology and modern service industry. Among them, the revenue of smart appliances and service industries is less than 20% of the total revenue, and it is difficult to talk about the results of transformation.
The photovoltaic industry attributed to the multimedia business has been attracting market attention, the prospects of this industry can not help but be said, but its fraud, heavy asset investment and other issues are also very prominent, Skyworth can not take this successful transformation, at present can not be conclusive.
In addition to photovoltaics, Skyworth cross-border car manufacturing is also worth mentioning. Unlike PPT cars, Skyworth not only built cars, but also went public last year. However, the total sales in 2021 are only 4088 vehicles. The fundamental reason for this dismal data lies in its product strength, whether in design, endurance or technology, Skyworth Automobile has no highlights to speak of.
【Source: Skyworth Auto】
Of course, no one denies the transformation efforts of these former color TV giants, but under the diversified development route, no matter how actively to establish new tracks and create a new image, it must be admitted that in recent years, many traditional manufacturing companies have sought cross-border development, but so far there have been almost no successful cases. As former frontrunners, it seems difficult for the "Changhongs" to get out of the muddy road of transformation.
In short, every technological revolution will bring about the upgrading of the industrial structure, and some once brilliant enterprises will be eliminated. And those "long-lived" enterprises will always maintain innovation and change with the development of the times.