Founded in 1958, Changhong has a history of 60 years. In this long period of time, Changhong in the development of laughter, also had a bumpy, but all the way to the present. Fortunately, Changhong did not disappear in the torrent of time, after countless challenges, still survive in the market. Unfortunately, the “old man” showed signs of fatigue and the building was about to collapse.
Once “color TV king” changhong how now?
Changhong, once a proud national brand, is declining step by step. It began to decline from 2010, from that year, Changhong was pulled down the champion, ranking was gradually squeezed out of the top three, now is directly out of the first-line camp.
According to the survey data of Group Intelligence consulting, in the first half of this year, global color TV shipments were 106 million units, the top three are Samsung, LG, TCL, shipments were 18.3 million, 13.1 million, 12.65 million. Once dominated the changhong color TV market in China fell to ninth, shipments only 3.4 million units, behind changhong millet shipments have 3.2 million units, and changhong in the domestic market share is more and more small, overseas proportion is very small, millet in recent years in the domestic market share is bigger, its market in India also had the very big development. In this case, in the second half of the development, Changhong is very likely to be overtaken by Xiaomi.
Drop altar, Changhong from the original industry head towards the tail of the industry. Changhong, which dominated the color TV industry for about 20 years and was once valued at 58 billion yuan, is now worth 13.6 billion yuan, down about 70 percent. It is understood that Changhong began to decline in performance in 2014, but there has been no loss. And only in the past year, Changhong loss performance as high as 1.976 billion yuan. The last time Changhong lost money was in 2004, when the company lost 3.68 billion yuan. When Changhong was in urgent need of recuperation, Konka, Hisense, TCL and other domestic brands took advantage of the situation, and Konka even surpassed Changhong in that year and became the sales champion of domestic color TV. Changhong is also starting from this gradually downward.
Previously, in the color TV market is in the display tube to plasma, LCD screen period, Changhong values plasma in the display effect and panel size advantage, want to master the upstream technology, in order to control the market. Therefore, we spent 2 billion dollars to acquire Oulian Plasma Corporation of Korea, and 720 million yuan to establish Ouhong, a plasma panel production company. Besides Ouhong, we also invested a huge sum of money to establish anhui Xinhao plasma production line.
Changhong’s idea is good, the layout is also very in place, unfortunately, in the support of technology, the market is not the final choice of plasma but LCD screen. That means, in the market of the two choices in the bet, Changhong has lost, and Changhong’s huge investment in plasma projects for only consecutive years of losses. At the end of 2014, Changhong was forced to sell its 61.48% stake in Ouhong at a “low price” of 64.2 million yuan. Fact proves, changhong of this “big bet”, did not let changhong wash before shame, but let changhong fall deeper.
By once the industry overlord to now gradually people do not know, changhong this hegemony in the industry as long as 20 years of Changhong eventually fell down the altar, dying struggle in the color TV market.
Recall that year scenery, changhong is how to sit on the overlord?
Changhong is in the early 1970s just began to develop, production of TV, the product just came out soon then harvested a large market, and gradually blowing a “Changhong wind” in the market, it can be said that every sale of a TV in China, there is a changhong, it can be said that it is unlimited scenery. From last century 90’s to 2009, Changhong TV sits the sales champion for about 20 years. Changhong can have such achievements, not by chance.
In order to go better and higher in the market, enterprises continue to strengthen their technology research and development capabilities. Enterprises through continuous innovation and transformation of technology, development and color TV supporting front-end parts process, so that enterprises gradually have large-scale production and manufacturing capacity, is conducive to improve the market share of enterprises. And in order to maintain the advantages of products in technology, Changhong also actively seek external cooperation. The company successively cooperated with panasonic, Toshiba, Thomson and other overseas enterprises in terms of technology, so as to synchronize its own technology with the world’s advanced technology, strengthen its technological advantages, and improve its market competitiveness.
Relevant data show that when Changhong’s cumulative annual production and sales of color TV sets exceeded 6.6 million, TCL’s production and sales volume just exceeded one million. In 1995, the sales volume of Changhong’s color TV sets exceeded 10 million, and in 2002, the sales volume of its products exceeded 70 million, making It the first in China and the second in the world. This shows, at that time changhong is how ground is welcomed by the market. If the company rolls out before “red sun gens” it is more by dint of function complete, performance is good, a rush to buy upsurge was lifted on the market.
Furthermore, when the domestic color TV market is attacked by overseas color TV, Changhong successfully breaks through price war and becomes famous. In the three price wars with foreign brands, Changhong color TV is more and more recognized by the market, so that enterprises in the market stand more stable, higher. Changhong’s color TV market share rose from 16.68% to 31.64%, its assets soared from more than 14 million yuan to 13 billion yuan, and its brand value rose rapidly to 26 billion yuan.
Besides low besides, changhong can come to the fore in numerous brand, be loved by consumer greatly, still have great concern with its good quality. If enterprises want to gain more market and seek long-term development, excellent product quality is the key. Changhong is with excellent product quality out of a broad road. Its deep research in technology provides the best guarantee for product quality, brings good experience to consumers, and establishes a good brand image of the enterprise.
There is also changhong’s “home appliances to the countryside” strategy, in the spring, the first color TV free to the villagers, such as autumn after the villagers have money in the money. And this “use before payment” strategic mode, but also for the enterprise to bring a lot of market share, so that it firmly sit in the first place in the industry. At that time, Changhong was known as the “Chinese panasonic” in the industry, and it also went abroad as a national gift. This shows, changhong color TV has great influence on the market. But things are hard to predict, affected by various factors, Changhong has not been beautiful.
The future is uncertain, changhong is how to decline step by step?
Not long ago, changhong, the former “king of color TV sets”, reappeared in the public eye, but not because it was launching a new product, but because changhong was selling its house. It is lamenting that the industry’s former hegemons have to sell assets to maintain profits. And this one incident, let people realize again, changhong color TV has declined the fact.
According to the financial data of Changhong in the first half of 2018, the company’s revenue in the first half of the year reached 38.4 billion yuan, with a year-on-year growth of 10.47%, and its profit was 169 million yuan, with a year-on-year growth of 9.26%. Looking at these results alone, we would think that Changhong’s development is not bad. However, the actual situation is that of the 169 million yuan profit, 137 million yuan is from government subsidies, which means that the net interest rate of the enterprise in the first half of the year is actually only 32 million yuan. Today, Changhong is largely kept afloat by selling assets and government subsidies. At this point, people can not help but start to think, what led to the dominance of nearly 20 years in the color TV market “king”, reduced to this point now?
Speak of the decline of Changhong, basically have the following points. First, strategic mistakes, lack of product innovation. The first two price wars, so that Changhong tasted sweet, its launched the third price rise, the intention to obtain more benefits. However, the third price war not only did not expand the advantages of the enterprise, but also pulled the enterprise down, making Changhong appear the first loss, delaying the pace of the enterprise to enter the overseas market. In addition, enterprises pay too much attention to the competition for market share and neglect the innovation and research of products, which leads to the gradual weakening of product advantages. After that, the enterprise misjudged and invested heavily in plasma projects, which gradually deviated from the mainstream of The Times and further increased the pressure of enterprise capital.
Secondly, the brand focus shift, involving too many fields, the enterprise to lose. In order to gain more market share, Changhong did not focus on the field of color TV, gradually to mobile phones, real estate, kitchen and bathroom, funds, e-commerce and other fields layout. But when you have a lot of kids, you can’t help it. Changhong layout of a number of businesses, are flat development, physical looks like a lot of big, revenue has also increased, but the cost is getting higher and higher, enterprise profitability is becoming more and more difficult. And with the development of enterprise diversification is too extensive, brand center gradually offset. According to changhong’s 2014 financial results, the real estate business brought a profit of nearly 500 million yuan, while the color TV business lost 130 million yuan. In the long run, it will not only increase the difficulty of making profits, but also damage changhong, a national brand with decades of history.
Finally, with the trend of intelligence, there are more competitors. In order to regain more market share, Changhong launched the intelligent transformation strategy and introduced the AI TV CHiQ, but it is difficult for the company to recover the declining trend. Changhong is not alone in launching ai strategies, no matter its old rivals Such as Konka, Skyworth, Hisense and TCL, or Internet brands such as Baofeng, Xiaomi and Wewhale. Under this multiple siege, the development of changhong color TV may be said to be treading on thin ice.
Anyway, changhong color TV scenery is not the same fact. “The Changhong brand is old and weak. “When young people choose appliances, they will choose younger brands.” I believe this is also the view of many people on Changhong. In the past 60 years, Changhong has experienced prosperity and prosperity, but also experienced wind, frost, rain and snow.
Changhong as a color TV market hegemony for many years of the king, come for many years, has been far behind competitors. Now, with the development of The Times, this king was pulled down the altar, from the original no one knows to now little known, Changhong is finally ushered in a hero curtain call. According to the current development and market situation, if Changhong wants to gain more market share in the color TV market, it may still be possible after continuously strengthening core technology capabilities and launching innovative products in line with market demand.
Article/Liu Kuang public number, ID: Liukuang110, this article first kuang Venture capital network