Appliance giants go to the sea - opportunities and challenges coexist

According to data released by Ovid Cloud Network, the total sales volume of China's color TV market in 2014 was 44.61 million units, a year-on-year decrease of 6.6%; the sales amount was 146.2 billion yuan, a year-on-year decrease of 14.5%, which was the first decline in the Chinese color TV market in the past 30 years. In addition, Dong Min, general manager of Owen Cloud Network Black Power Division, also predicted that the color TV market will reach 29.93 million units in the second half of 2015, down 3.2% year-on-year.

Not only color TVs, but also the air-conditioning industry. According to data from Yikang, the retail sales in the air conditioner market was only RMB 86.5 billion in the first half of the year, down 3.1% year-on-year.

With the increasingly fierce competition in the domestic appliance market, overseas has become a new battlefield for home appliance companies. According to Quzhi's statistics, in 2014, global color TV shipments reached 215 million units, an increase of 5.5% year-on-year. It is expected that this figure will be 223 million units in 2015, an increase of 3.7% year-on-year.

In the view of many people in the industry, home appliance companies have "sea", on the one hand due to the Chinese market is not optimistic, the market capacity is basically the same as last year, but the increase in competitors, Internet brands began to enter the appliance market strong, pressure on profits; On the one hand, due to overseas market profits higher than domestic, through the acquisition of overseas counterparts, China's home appliance companies can directly expand, develop their own brands, the market share of the rapid growth.

Challenges and challenges coexist

However, China's home appliance companies “go to sea” are also accompanied by great risks.

In 2004, TCL Group and Thomson France jointly invested in the establishment of TCL-Thomson Electronics Co., Ltd. to reorganize both color TV and DVD businesses. The total assets involved in mergers and acquisitions reached 470 million euros, of which TCL and Thomson had 67% and 33% of the shares, respectively.

“That was the most difficult time for TCL. When the acquisition began, we were blind and confident.” The huge losses caused by the acquisition of Thomson’s TV business in Europe caused the extraordinary suffering of TCL Group Chairman Li Dongsheng for two years. I lost 20 pounds in time."

Recalling this history, Li Dongsheng stated that there are five major reasons worthy of reflection and learning: “We could not resist the temptation and are eager to achieve success; We are not prepared enough for possible difficulties; We have insufficient international talent pools; We carry out mergers and acquisitions in the transition period of products and markets. Enlarged the risk; did not thoroughly understand the laws and regulations and unspoken rules of the relevant countries."