Press Release

Is the Party Over for Chinese New Year TV Sales?

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Television sales in China during the all-important Lunar New Year season fell short of expectations in 2011, signaling that the holiday may no longer be the TV sales driver it once was. Television sales in China during January and February amounted to 7.4 million units, as presented in the attached figure. While this was up 9 percent from 6.8 million during the same months in 2010, television brands had pinned their hopes on growth of 15 percent.

“Chinese consumer attitudes regarding television purchasing during Lunar New Year sales have changed,” Zhang said. “Consumers, especially those in urban markets, no longer are willing to wait for the holiday selling season to buy televisions, as they did in previous years. Rather, they want to buy televisions when they really need them. With price competition among television makers intensifying, Chinese consumers can find good deals all year long—not just during the holiday selling season.

Television sales growth during the holiday also was impacted by the diminishing effect of the Chinese government’s rural subsidy program. The program, which reduces the cost of purchasing consumer electronics devices for consumers in the country, now has been in place for as long as three years in some regions. Given its long duration, the program’s positive effect on TV sales appears largely to have run its course.

With growth falling short of expectations, total inventory of televisions in China increased from four weeks in mid- January to eight weeks in mid-February, about three weeks higher than the normal level.

While television sales growth was disappointing during the New Year holiday, Chinese consumers continued to increase their purchases of televisions—particularly newer, more expensive liquid-crystal display television (LCD TV) models. A full 40 percent of LCD TVs sold in China during the holiday used advanced light-emitting diode (LED) backlighting. The penetration rate for LED is higher among urban purchasers than rural buyers.

Consumer adoption of 3-D LCD and plasma models remains minimal in China, with only about 2 percent of sets sold during the holiday season supporting three-dimensional display. The 3-D sets that use active shutter glasses represented that largest portion of sales during the holiday sales season. However, models that employ passive polarizer glasses are experiencing faster growth. And while foreign brands are still leading the 3-D television market, sales for local brands rose more quickly. All told, the market share for sets that use passive glasses is set to increase because local brands are more enthusiastic about the technology.

Read More > IHS iSuppli Television Systems Research


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