CCID Consulting: China's Industry Application Market is the 'Blue Sea' of Flat Panel TVs

CCID Consulting: China's Industry Application Market is the 'Blue Sea' of Flat Panel TVs

BEIJING, Oct. 11 /Xinhua-PRNewswire/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article regarding how China's industry application market is the "blue sea" of flat panel TVs.

With the decrease of price, flat panel TVs have achieved high-speed growth in the industrial application market. According to the survey on the flat panel TV industry application market by CCID Consulting, it is estimated that from 2003 to 2007, the CAGR of China's flat panel TV industry application market will reach 55.3%.

Based on the characteristics of the flat panel TV industry application, CCID Consulting classifies the industry market into the following ten major sectors: government industry, exhibition industry (including exhibition halls, museums and science museums, etc.), catering and entertainment industry (including restaurants, KTV venues, bath houses and hotels, etc.), financial services industry (including banking, securities and insurance, etc.), education, transportation (including buses, the metro, railways and civil aviation, etc.), sanitation, retail (super markets and department stores, etc.), energy (power, petroleum and coal), and media (commercial buildings, radio and television, etc.), along with logistics, telecom, postal services, sports venues and the construction industry etc.

The competition in the flat panel TV retail market is furious, and the profit in this trade is small. While for the flat panel TV industry application market, the competition is comparatively rather mild. Industry users usually purchase large numbers of flat panel TVs, and the profit rate is relatively higher.

I. China's Flat Panel TV Industry Application Market Developing at a High Speed

In accordance with the statistics by CCID Consulting, in 2006, the sales volume of China's flat panel TV industry application market has reached 292,500, 42.5% of year-on-year growth rate; and the sales revenue has reached 2.682 billion Yuan, 14.3% of year-on-year growth rate. With the further decrease of flat panel TV prices and the sustained development of China's commerce, plus the stimulation of the Beijing 2008 Olympic Games, China's flat panel TV industry application market size will maintain its high speed growth in 2007. CCID Consulting predicts that the sales volume of China's flat panel TV industry application market will reach 439,300, and the sales revenue will reach 3.963 billion Yuan.

Fig. 1 Market Share of China's Flat Panel TV Industry Application, 2003 - 2007

   http://www.ccidconsulting.com/E_import/channel/detail.asp?Content_id=13747      Source: CCID Consulting, Sep., 2007    II. Structure of China's Flat Panel TV Industry Application Market    1. Product Structure    1.1 Technology  

In the industry application market, the application of LCD TVs is larger than that of PDP TVs. In the first half of 2007, the proportion of LCD TVs exceeded 70% thanks to the high-speed growth of the LCD TV market and the comparatively low price of LCD TVs and the high price-performance ratio.

1.2 Size Structure

Currently in the industry application market the sizes of LCD TVs are concentrated to 22x27-inch and 32x40-inch screens. The proportion of the LCD TV market share for these two size ranges is over 64%. These LCD TVs are mainly used in transportation, commercial advertisements, hotels and other industries. The sizes of PDP TVs are mainly concentrated to 40x46-inch screens occupying over 80% of the whole PDP TV market. With the decrease of the PDP TV price, CCID Consulting predicts that the proportion of 50-inch PDP TVs in the industry application market will increase.

Fig. 2 Product Structure of China's Plat Panel TV Industry Application Market in the First Half of 2007

   http://www.ccidconsulting.com/upload/12123.jpg     Source: CCID Consulting, Sep., 2007    2. Price Structure   

Owing to the drop in price, 4000-8000 Yuan has become the mainstream price range in the LCD TV industry application market. For PDP TVs, pressed by the price cuts in LCD TVs, products with a price of less than 15,000 Yuan have become mainstream products. With the intensification of competition, the prices of flat panel TVs in the industry application market will further decrease.

3. Regional Structure

In the first half of 2007, the sales volume of flat panel TVs in the industry application market in North China was the highest. In addition, the sales volume in East China was also outstanding, and the sales volume gap between North China and East China narrowed gradually. In the first half of 2007, the sales volume both in North China and East China exceeded 50,000 sets. Compared with the same period in 2006, the proportion of sales volume in North China, East China and South China in the first half of 2007 decreased slightly, and the proportion of sales volume in the other four regions increased slightly. The high sales volume in North China and East China are closely related to the high economic level and commercial development of these two regions. In North China, the contribution of Beijing and Tianjin to the high sales volume was the largest. While in East China, the contributions of Shanghai, Jiangsu Province and Zhejiang Province were unsurprisingly significant.

Fig. 3 Regional Structure of China's Plat Panel TV Industry Application Market in the First Half of 2007

   http://www.ccidconsulting.com/upload/12124.jpg     Source: CCID Consulting, Sep., 2007    4. Industrial Purpose Structure   

Concerning the industry distribution, the sales volume in the catering and entertainment industry was undoubtedly top across all industries. This industry occupied over 25% of the market share in China's flat panel TV industry application market in the first half of 2007. Flat panel TVs in the retail industry and media industry are widely used. The proportional usage of applications in other industries is comparatively low.

With its good price-performance ratio, most of the LCD TVs in the industry application market are middle to small sized, and are utilized in catering, hotels, education, transportation and other industries. For PDP TVs, they are mainly dominant in entertainment areas, such as KTV parlors, which require high contrast, and sports venues, which require high dynamic definition. Different industry users care about different aspects of a flat panel TV, therefore, they will select flat panel TVs with different types and prices.

Fig. 4 Industry Structure of China's Flat Panel TV Industry Application Market in the First Half of 2007 -- By Purpose

   http://www.ccidconsulting.com/upload/12125.jpg     Source: CCID Consulting, Sep. 2007    5. Brand Structure   

Currently, in the flat panel TV industry application market, domestic brands enjoy advantages with middle- and small-sized flat panel TVs. While in the large plat panel TV field, foreign brands enjoy the overall advantage. For large PDP TVs, Panasonic, LG and Samsung are the top three brands in regards to sales volume. LG and Samsung entered the commerce market rather early. Plus, their strength in distribution is rather large, and their prices are competitive. Their achievements in the commerce market are much better than those in the retail market. For large LCD TVs, Philips entered the commerce market rather early. It placed No.1 leveraging its advantage in the hotel industry concerning sales volume, followed by Samsung, Hisense and Haier. As for the overall flat panel TV market, in the first half of 2007, Panasonic, LG and Haier were the top three brands in regards to sales volume, accounting for 10.5%, 10.1% and 9.7% of total sales volume respectively.

6. Channel Structure

The marketing channels of flat panel TVs in industry application market are different from those in the retail market. The channels mainly include self-system sales companies, agents and TV bazaars. In the first half of 2007, the number of flat panel TVs that were sold through a self-system sales company or agents occupied over 40% of the total number of flat panel TVs, with only about 20% of flat panel TVs sold through TV bazaars.

Fig. 5 Channel Structure of China's Plat Panel TV Industry Application Market in the First Half of 2007

   http://www.ccidconsulting.com/upload/12126.jpg     Source: CCID Consulting, Sep., 2007   

III. The Potential of the Flat Panel TV Industry Application Market Is Huge

The high-speed development of various industries has accelerated the application of flat panel TVs. In 2007, major industries for the application of flat panel TVs have achieved good performances. The consumption of the tertiary industry has grown rapidly, and the performance of the catering and entertainment service industry is outstanding. Financial services grow stably, and the stock market is vigorous, with securities making huge profits. The development of the education industry is stable, while the public transportation industry continues to grow, as the ground digital transmission standard is introduced. The growth of the energy industry is rapid. The reforms of the postal services have been drastically implemented, and sports events are continuously promoting the improvement of sports venues and matching facilities. The whole commerce industry is prosperous. The above- mentioned favourable factors directly push the large-scale growth of flat panel TVs.

Also, according to the Survey on China's Flat Panel TV Industry User B2B Satisfaction, Blue Book released firstly by CCID Consulting, the hosting of the 2008 Olympic Games in Beijing is an uncommon opportunity for commercial development. Consumers pay lots of attention on sports events. Therefore, flat panel TVs, with their outstanding technical performance, become the first choice for hotels/restaurants, entertainment sites, transportation and other industry users when purchasing TVs. With the opportunity of the Olympic Games, the flat panel TV industry application market will achieve even greater development.

CCID Consulting thinks that for flat panel TV vendors, the industry application market will be the "blue sea" for flat panel TVs, compared with the flat panel TV retail market, where the competition is furious and the profits small.

About CCID Consulting

CCID Consulting Co., Ltd (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is directly affiliate to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Harbin, with over 300 professional consultants and industry experts. The company's business scope has covered over 200 large and medium-sized cities in China. Apart from home market development, CCID Consulting establishes international cooperation links across the United States, Asia-pacific area and Europe, by setting up agents in the U.S, Japan, South Korea, Australia, Singapore, Italy and Russia, along with the aim to be global.

Based on four major competitiveness of the powerful data channels, industrial resources, intensive knowledge and deep understandings of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Her customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits herself to be the NO.1 consultant in strategic consulting, the No.1 Brand for Strategic Consultancy, No. 1 advisor for Enterprise Management and the No. 1 Consultant for Government Decision-making.

   For more information, please contact:     Cynthia Liu    Coordinating Manager    CCID Consulting Co., Ltd.    Tel:   +86-10-8855-9080    Email: liuyan@ccidconsulting.com  

Source: CCID Consulting Co., Ltd.

CONTACT: Cynthia Liu, Coordinating Manager of CCID Consulting Co., Ltd.,
+86-10-8855-9080, or liuyan@ccidconsulting.com

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