Skyworth: Wisdom Dreams Under High-end Brand Strategy

Skyworth Digital recently announced its sales of color TVs in February 2015. In February, Skyworth TV won a sales volume of 514,000 units in the Chinese market, up 78% from February last year. Among them, 4K TV sales were 47,000 units, an increase of 54% year-on-year, and smart TV sales were 21.52 million units, a year-on-year increase of 209%. In terms of total sales, Skyworth TV's sales in February increased by 83% year-on-year, of which the Chinese market increased by 80% and overseas markets increased by 98%.



The total color TV sales in January increased by 29% year-on-year to 1.583 million units in January, and the monthly sales of 4K TVs soared by 138%. Taking into account the February Chinese Lunar New Year holiday factors, this report card is also very beautiful.
Credit Suisse recently pointed out in a research report that Skyworth Digital’s share price is not reasonable, and its core earnings have steadily increased this year. Therefore, to give the company a "outperform" rating, the stock's target price was raised from HK$6 to HK$6.2. JPMorgan believes that Skyworth is the largest TV manufacturer in China. Its market share in the rural market continues to increase, and it can support its higher sales growth than the industry level. Short-term stock price declines provide investors with a buying opportunity and reiterates their increase in holdings. The target of HK$7 remains unchanged.

According to the established target of Skyworth Digital last year, the total sales volume of Skyworth TV in the 2014/15 financial year (end of March this year) is set to reach 12 million units, including 9 million units in the Chinese market and 3 million units in the overseas market. According to February sales data, Skyworth Digital has completed its total TV sales target for the fiscal year ahead of schedule. Sales for the 11th month of 2014/4/1--2015/2/1 reached 12.263 million units, and March has not yet ended. It has increased by 17% year-on-year.

Product and Marketing Innovation under "Out Productism"

According to comprehensive market monitoring data, the brand share of Japanese and Korean brands in the New Year's Day and Spring Festival markets in 2015 decreased again (even a Japanese-funded company has withdrawn from the Chinese market). The product features of the exited market share are basically large-size high-end products. , And Skyworth 4K, smart TV and other high-end product sales growth is to snatch this part of the high-end market share. This shows that consumers recognize Skyworth's high-end products and brands. The win of Skyworth actually wins the entire industry chain system of “platform + content + terminal + application”, wins consistent “complete productism”, and wins the highest quality resources in the earliest Internet transition, dual brand operation, and cool development. On a series of reserves, it is profound and profound.

Lu Jiebo, deputy secretary-general of the China Electronic Chamber of Commerce, believes that instead of saying that Japanese companies withdraw from the home appliance industry will bring more opportunities for Chinese home appliance companies, it might be better to say that the rise of Chinese home appliance companies has accelerated the decline of Japanese companies.

Since the end of 2013, due to the country's macroeconomic downturn, "home appliances to the countryside," "energy-saving subsidies" and other policies, and the Internet companies have entered the color TV market "scrabble", the entire color TV industry can be described as internal difficulties and full of challenges.

"Chuangwei rooted color TV industry for more than 20 years. Our industry chain advantage and many years of accumulated after-sales service system are not comparable to many Internet companies." For the Internet companies enter the home appliance industry, Skyworth Group CEO, Skyworth Digital CEO Yang Dongwen that Skyworth has the ability to meet Challenges, but also to learn Internet companies in the operating mode, customer system and other Internet thinking.

This also shows that today's color TV industry competition is a comprehensive competition between the strong, only in the technology, channels, supply chain, reaction speed and other aspects of the brand can become a sustainable winner, in the long term to grasp the advantages of the industry chain The Chinese brand will become the global leader in the color TV industry.

Skyworth has initiated a strategic transformation from a hardware supplier to a hardware and content service provider to create a smart ecosystem. User-oriented technology innovation has always been the core advantage of Skyworth. While doing a good job and selling hardware, Skyworth has created a "cool open platform" to provide users with video, games, e-commerce, education and other content services.

Peng Jin, General Manager of Skyworth's color TV division, believes that the black power industry is at a critical turning point in the transformation of the profit model, and Skyworth must conduct a comprehensive layout in this transitional trend.

In view of the changes in market structure and the over-strength of channels, Skyworth has boldly attempted direct retail business explorations such as community direct sales, database direct sales, group purchases, and in-house purchases. It has established a “lane fighting model” and developed an e-commerce and commercial TV business system from distribution. Transition to retail.

Skyworth researches customer needs and its changing rules to formulate marketing strategies. Peng Jin believes that when the domestic color TV industry enters the stock economy, the actual demand, that is, the explicit demand for popularization is indeed shrinking, even negative growth. But as long as people's inner awareness is met, potential needs will be stimulated and transformed into an increase in the market. Therefore, under the new market environment, Skyworth will consider competitors but will not be completely competitive oriented, but will focus on customer needs.

Skyworth adopts a "precision marketing" strategy to solve some of the fragmented customer needs. For example, Skyworth has launched a "TV for the elderly" with large fonts and simple operation for the elderly, which has been sought after by the market.

Focus on diversification, internationalization, and smart home

On January 7, 2015, the “Global Top Brands 2014-2015 Global Brand Awards” sponsored by the United States International Data Group (IDG) was held at the 2015 CES. In the meantime, Skyworth received two honours: "China's Consumer Electronics Leading Brand Top 10"3 and "2014-2015 Global TV Top 7".

On January 16, the brand value of Skyworth continued to grow to RMB 55.695 billion at the 9th Conference on Brand Value of China Electronics Enterprises held in Kunming, Yunnan Province. After the brand value of RMB 48.507 billion in 2013, it was a breakthrough. At the same time, Skyworth also won a number of awards: in 2014, it ranked first in China's LCD TV brand value; in 2014, it ranked first in China's home Internet product brand value; in 2014, China's smart home appliance research and innovation brand became the most valuable brand of LCD TV in China.

On March 11th, Skyworth’s smart home strategy was formally launched at the China Household Appliances Expo (AWE) in Shanghai. Actually, this is not only the result of Skyworth’s multi-faceted, international, and “white plus black” strategic layout for years; High-end brand strategy has accumulated a lot!

As early as four years ago, Skyworth has started producing refrigerators, washing machines and air purifiers. Last year, the newly-completed Skyworth Electric (Nanjing) Industrial Park covers an area of ​​300 acres, a total construction area of ​​200,000 square meters, an investment of 1 billion yuan, and the introduction of Germany, Italy, Japan's first-class production equipment and the industry's top design agencies, can achieve years Production capacity of 6 million units.

At the same time, Skyworth is also accelerating the R&D and investment of smart home appliances. Has successfully developed intelligent interconnected refrigerators and washing machines, its own research and development of health and intelligent technology platform, smart touch operation, while relying on the cloud platform for user big data management and services, will also work with Skyworth TV to build a family intelligent experience. Product line to all categories and high-end layout. Although it was established for three years, Skyworth Electric has produced a beautiful report card: the compound growth rate exceeds 55%!

At the conference for smart homes, President Yang Dongwen also announced that Skyworth will open smart screens, build smart hardware platforms, publish standard protocols, actively invite upstream and downstream sharing smart TV screens, and jointly develop smart home service content. "Delivering life services to hundreds of millions of families through smart screens, allowing the world to share the wonderful, convenient and free life of future smart homes!"

The successful landing of Skyworth's smart home strategy not only means the successful retrogression of Skyworth in the field of black and white for many years; moreover, it is based on an innovative and forward-looking industrial demonstration.

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