Slumping sales of Japanese-made TVs in the vital Chinese market underscore why Japan should get the hell out of the TV business.
TOKYO -- Japanese TV manufacturers reported plummeting sales in China during the most recent holiday shopping week -- China's Moon Festival and National Day holidays that extended through Oct. 7. The combined market share for Japan's eight consumer electronics vendors in China plunged to 18 percent from 30 percent a year ago.
The downfall illustrates the impact of a territorial dispute over islands in the East China Sea. Violent protests broke out across China along with calls for boycotts of Japanese products in mid-September after Japan nationalized two of the islands, known as the Diaoyu in Chinese and the Senkaku in Japanese. The gambit by Tokyo followed the purchase of the islands from private owners.
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Japanese CE companies had already seen their China TV sales decline by more than 40 percent from a year ago as leading Chinese TV companies increased their shares by promoting a variety of “patriotic campaigns.”
At the same time, Korean vendors like Samsung and LG saw their China sales grow by more than 10 percent during the same period, according to All View Consulting, a market researcher based in Beijing.
Sales volume in units (Source: All View Consulting)
Among Japanese brands in China, the biggest loser was Sharp, whose TV shipments fell by more than 60 percent. Sony also saw its TV sales volume dive by more than 40 percent.
Japan’s auto industry was the first to report a huge drop in China sales during the September unrest. Toyota's China sales were nearly halved, while Honda reported a 40.5 percent slide in its China sales. In a report on the pounding Japanese car makers are taking in China, Reuters
quote industry analyst Koji Endo as saying, “Inventories are growing, factories are operating less and retail is not going well at all.”
While I recognize the tough spot Japan’s automotive industry is in, I find the declining market share by Japanese TV manufacturers in China far more troubling. That's because the sensitive political relationship between Japan and China alone can’t be entirely faulted for the huge drop in TV sales by Japanese brands in China.
The key reason is that Chinese TV makers have caught up with their Japanese rivals in terms of flat-panel TV quality and features.
Let’s face it. Japanese brands aren’t adding much value to their TV anymore. At a time when most Japanese companies are reportedly losing money on every TV they sell, Japan should feel no obligations to stick around the traditional TV market.
It’s not China that’s driving Japan out of the TV business. Japanese CE vendors should simply move on.Related stories: