China FPD TV Sales Lower than Expected During New Year Holiday

By Bing Zhang – Research Director, China Market

Based on data from the Chinese government, as well as channel checks with retailers and TV brands, DisplaySearch’s preliminary estimate of FPD TV sell-through during the Chinese New Year holiday is less than 3.5 million units. Many in the industry were expecting sales to be 4 million, based on the assumption that Chinese New Year accounts for 10% of the annual market total; however, some local TV makers estimated the number would be less than 3 million.

Leading up to the long holiday (February 14-19), sales of FPD TVs had strong momentum, which significantly enhanced major TV makers’ sales expectations for the holiday. Skyworth reported that they shipped 850 thousand LCD TVs in January, and their China TV business achieved 97% growth in FPD TV (mostly LCD TV). TCL continued rapid growth in shipments of LCD TVs during the period, 760 thousand units, up 86% Y/Y. Other TV makers, such as Hisense, Changhong, Konka and Haier have not officially disclosed monthly FPD TV shipments, but based on our preliminary checks, we estimate that their LCD TV shipments in January and February will show more than 75% Y/Y growth.

Along with May Day and National Day, the Chinese New Year holiday is one of the most important “golden weeks” for FPD TV sales in China. Mainstream channels and major TV makers all have actively preparing for. It was interesting that the 3S brands and other major foreign brands were more aggressive on pricing than local brands this year. Local TV brands did not put much emphasis on FPD TV sales during the holiday, partly due to high panel costs and cold whether. But the other issue is that there have been many subsidy programs from government and TV makers over the past year, such as the 13% Home Appliances to Rural Area program, the 10% pilot Swapping Old for New program, and the 3% Green Subsidy program launched by TV makers as a promotion. So local TV makers only promoted high-end products such as LED-backlit LCD TVs, internet TV, and Kala OK TV; while these products were of great interest, high-end models did not contribute much to sales volume.

Set makers and retailers built up inventory in anticipation of strong holiday sales, and the slower sell-through seems to have resulted in 2-3 weeks more inventory for most of local TV makers, which may further affect panel supply and demand in the coming 1-2 months.