In 2023, the TV market faced challenging conditions due to inflationary pressures impacting consumer spending.
Despite efforts by various brands to offer price reductions and promotions, sales struggled amidst consumers’ constrained disposable income. As a consequence, international brands focusing on mid-to-high-end TV models experienced a downturn in shipments, TrendForce’s analysis said.
Remarkably, amidst this adversity, Hisense and TCL emerged as exceptions, leveraging their cost advantages to achieve over 10 percent growth in shipments. Their market shares surged to 13.8 percent and 12.9 percent respectively, defying the broader downward trend.
TrendForce highlighted the surplus in TV panel production capacity juxtaposed with sluggish demand. Effective supply chain management, spanning from upstream to downstream, was deemed crucial not only for enhancing production efficiency and reducing costs but also for expanding market share for panels, brands, and OEMs in the current market scenario. This integration within the supply chain was seen as pivotal for sustained growth in TV brands and OEM shipments moving into 2024.
The year 2023 witnessed a pivotal moment as the top five brands claimed a collective 62.3 percent market share, signaling the dominance of larger entities. This trend is anticipated to persist into 2024, driven by several factors including a substantial hike in TV panel prices leading to increased differentiation among brands.
The market dynamics also indicated a noteworthy increase in generic brands, registering approximately 9.1 percent annual growth in shipments and capturing a 16.7 percent market share. This growth was propelled by North American channel brands introducing cost-effective TVs since the latter half of 2022, enticing consumers with affordable options and fostering subsequent purchases.
However, despite these shifts, a projected 2.3 percent decline in global TV shipments loomed for 2023. Brands with shipments below 6 million units, particularly those under 3 million units, were expected to face intensified operational challenges due to the downturn.
The landscape pushed TV brands towards reorganizing their supply chains, recognizing cost optimization as a critical factor for success in 2024. Established giants like Samsung and LG Electronics, historically backed by their group’s panel makers, were compelled to pivot and collaborate with other panel manufacturers, increasingly relying on Chinese counterparts due to their competitive pricing advantage.
This pivot towards Chinese panel makers, however, also meant a shift in the bargaining power within the supply chain. TrendForce’s analysis for 2024 suggested a significant reduction in Samsung Electronics’ dependence on Chinese panel makers, foreseeing a drop in procurement share from 55 percent to 38 percent. Nevertheless, other brands were anticipated to continue sourcing over half of their panels from China.
Recognizing that TV panels account for a significant portion of total production costs, stakeholders in the TV industry were expected to adopt strategies aimed at controlling production and maintaining prices in a market characterized by weak demand. To mitigate costs, efforts to optimize electronic components such as backlight units, mechanical components, mainboards, and power boards were highlighted.
Brands like Hisense and TCL, with in-house factories both domestically and internationally, strategically increased their reliance on domestic component suppliers to control production costs effectively, thereby bolstering the competitive edge of their brand products. Furthermore, TV OEMs and ODMs like MOKA, BOEVT, and HKC expanded their reach by forging alliances with group panel makers and venturing into overseas markets like Mexico and Vietnam to save on import tariffs while securing more orders.