For the television industry, the coming 2020 is a year of great changes. According to statistical data, under the background of rampant epidemic, postponement of major events and social isolation, the shipment of global TV market will reach 247 million units in 2020, with a year-on-year increase of 2.6%; Driven by the large-scale, the shipment area will reach 163 million square meters, with a year-on-year increase of 15.7%. Compared with the hard won "growth", the great changes and impact of market structure are more worthy of reflection.

The cost remains high and the panel price continues to rise

Since the end of the second quarter of 2020, the demand for goods preparation has recovered strongly in many overseas regions represented by North America and Europe. On the supply side, due to the continuous withdrawal of South Korea's production capacity, as well as the main panel manufacturers reducing the supply of TV panels and increasing the supply of IT application capacity, the actual production capacity of LCD TV panels is gradually reduced.

Data show that the global LCD TV panel production capacity and projection area decreased by 1.3% year-on-year. This is also the first year-on-year decline in LCD TV panel capacity in the past five years. The supply and demand of the global LCD TV panel market tightened, showing a continuous shortage of supply in the third and fourth quarters, and the panel price began to rise strongly.

Panel prices of mainstream sizes have rebounded from the bottom in June this year. As of December, the prices of panels of mainstream sizes have increased by more than 60%. Among them, the price of 32 inch HD panel rebounded most rapidly, with an increase of more than 90%; The price of 43 inch to 55 inch UHD panels has increased by more than 60%; Although the price increase of large-size panels of 65 inches and above is moderate, it also reaches more than 30%. Within half a year, the panel price rose so sharply, on the one hand, reflecting the strong demand for "home consumption" caused by the epidemic, on the other hand, it is also the result of "de TV" of panel supply side capacity allocation.

"Rising cost" and "shortage" have become the key words in the second half of 2020, which undoubtedly brings great cost pressure to the whole machine brand. With the rise of terminal prices, the promotion period at the end of the year is mixed for brand manufacturers. Next, the whole machine manufacturers need to rethink the price positioning and product strategy in 2021, which will also become the biggest uncertainty in the global TV market in 2021.

Sudden change of market demand and turbulence of product structure

The drastic change of demand rhythm brings many challenges to machine manufacturers and supply chain enterprises.

On the one hand, the sudden change of market demand is mainly reflected in the market rhythm. In the past few years, the total scale of the global TV market has remained stable, with year-on-year changes in single digits and small fluctuations. In the first half of this year, affected by the epidemic, the total global TV shipment was only 102 million units, down 4.9% from the same period. Until the third quarter of this year, driven by rising demand, the total global TV shipments reached 74.3 million units, a year-on-year increase of 20.8% and a month on month increase of 44.8%. It is expected that in the fourth quarter, under the dual influence of the early shipment rhythm and the decline of production capacity in the TV market, the overall shipment rhythm of global TV will slow down, down 2.1% year-on-year and 5.6% month on month.

On the other hand, the triple factors of high demand, insufficient supply and rising cost jointly promote the "passive" change in the product structure of the global TV market in 2020. From the strategic perspective, at the beginning of 2020, all brand manufacturers and panel manufacturers actively planned to increase the large-scale product line. After the epidemic, the growth of overseas demand also led to the increase of product prices in all sizes. Among them, the growth rate of small and medium-sized products is relatively large. At the same time, panel manufacturers have not slowed down the pace of adjusting the product structure from small size to large size, which makes the second-line brands and OEM factories, which occupy the main force in the small and medium-sized market, face more serious supply problems, and the market scale shrinks rapidly. In the Chinese market, brand manufacturers took the lead in adjusting the terminal price, which significantly reduced the market scale of low-end small and medium-sized products. After comprehensive analysis, it can be seen that the product structure of the global TV market will be "passively" upgraded significantly in 2020. Throughout the year, it is expected that the proportion of shipments of products of 43 inches and below will decrease from 56.1% in 2019 to 51.7% in 2020, a year-on-year decrease of 4.4 percentage points.

Changes in competition pattern and growth of head brand share

In 2020, the "Matthew effect" in the global TV market will gradually appear.

In the market competition pattern, the market scale and share of the head brand will both increase, while the share of the tail brand and white brand will show a downward trend. The market share of the global Top7 brand will increase from 58.2% in the first quarter of 2019 to 64% in the fourth quarter of 2020. Compared with mobile phones, PCs and other consumer electronics, the brand concentration in the TV market is still low.

It is expected that the brand concentration in the global TV market will continue to increase in 2021, mainly due to the following reasons:

First, the head brand has a strong supply chain layout and fast response speed. After the outbreak of the epidemic, the global TV supply chain has been challenged. However, after the gradual recovery of market demand, some head brands responded quickly in the process of reserving supply chain resources and promoting the resumption of local factories, which better met the needs of the local market and channels. After the supply chain and systematization ability of the head brand were tested by the sharp fluctuations at both ends of supply and demand, the development foundation was further consolidated.

Second, the head brand has a strong ability to obtain upstream panel resources. Under the background that panel manufacturers generally reduce the distribution of TV production capacity, head brands with stable panel supply resources take the lead in the market.

Third, the superposition cost of shortage has risen sharply, and the price competitiveness of second-line brands has been weakened. In the period of panel overcapacity, second tier brands seize share from the low-end product market by virtue of flexible market operation and operation ability. With the rising cost of the whole machine and the shortage of resources, the second-line brand of "ammunition" is gradually lost in the price war, and the downward trend of its market share will be inevitable.

From 2018 and 2019, the production capacity of the TV panel market exceeds the demand and the price war occurs frequently, to 2020, the market supply and demand is tight, the panel price rises sharply, and the TV panel supply pattern has also undergone great changes. The change of leading manufacturer's position, generation line iteration and panel manufacturer's strategy have multiple impacts on the supply chain of complete machine manufacturers, and then affect all aspects of the global TV complete machine market.

Looking forward to 2021, the TV panel supply chain will also face in-depth adjustment, with complex influencing factors. In any case, the industrial chain should realize that upstream and downstream are interdependent, and establishing a stable partnership with panel suppliers is very important to realize the development strategy of the whole machine factory.