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Flagging traditional TV giants target VR for new profit

(chinadaily.com.cn) Updated: 2016-04-14 17:39

Traditional color TV manufacturers are facing immense pressure due to declines in market demand and competitiveness thrown by Internet companies.

Apart from Hisense Group and Haier Group, most of the nation's TV producers just recently released performance reports from last year.

According to Konka's 2015 financial statements, earnings in the TV and smartphone industry fell 14.33 percent and 50.2 percent respectively while its home appliance business revenue witnessed an increase.

In the last fiscal year, TCL Corp, another domestic home appliance maker, did not achieve its goal of 18 percent revenue growth.

Liu Tangzhi, the vice president of Skyworth Group and president of the company's TV sector said, "in 2016, the television industry will face a critical situation that it may not be able to resist for very long, meaning the industry consolidation is possible to arrive earlier."

As Internet companies like LeEco and Xiaomi break into the oligopoly market that used to dominated by traditional home appliance makers, the industry now faces changes in its market structure and operation mode.

Earlier this year, TV companies Konka, TCL, and Skyworth successively announced price cuts while adopting the traditional strategy of introducing investors and making large-scale mergers and acquisitions.

To relieve the performance pressure and to look for new sources of profits, these companies are also trying to get involved in other industries through partnerships.

In addition to the medical industry and intelligent manufacturing, virtual reality (VR) has brought a high level of interest from companies like Changhong, Haier, Hisense, and Gome.

For example, on April 9, more than 50 companies and institutions jointly launched the establishment of China's Virtual Reality Industry Alliance.

As a member of the alliance, Changhong set up its VR project group a year ago. Tian Chao Yong, the manger of Changhong's VR project, proposed that in the future, Changhong is going to further explore VR's application on the intelligent medical arena and expand its VR industry by integrating global resources.

Industry economy observer Liang Zhenpeng believes that with a wealth of resources and capital, household appliances giants may play a crucial role in promoting and commercializing the VR industry.

"The establishment of the alliance will benefit VR industry development, and it is also a significant move for the flagging household appliances industry to search for new profit channels," said Liang.

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