Behind the name-changing trend of home appliance giants: achieving transformation is the top priority!

When 5G is launched, the Internet of Things drives the accelerated development of all interactive interfaces and smart terminals. With the launch of smart homes, cross-border integration becomes easier and user demand is expected to explode. Haier is a typical example in this regard. Recently, Hisense Electric announced that it plans to change its name from "Hisense Electric" to "Hisense Vision", which is unexpected but reasonable.

Since last year, home appliance giants have been changing their names: Qingdao Haier was renamed Haier Smart Home, Skyworth Digital was changed to Skyworth Group, Meiling Electric was renamed Changhong Meiling, and the home appliance business of TCL Group was renamed TCL Industrial after being spun off. Earlier, Midea Group announced its transformation into a technology group, and TCL, Konka and other companies have also successively focused on the semiconductor display industry and upstream chip business.

It is understood that based on the smart home strategy, Haier Smart Home has built a white goods and kitchen and bathroom industry cluster, covering a full range of complete product sets such as refrigerators & freezers, washing machines, air conditioners, water heaters, kitchen appliances, etc., providing consumers with a "5+7+N" smart complete set solution of "complete, customized, and iterative".

Although these companies have stated that the name change is not to get rid of "home appliance" but to expand their own home appliance business, relevant analysis believes that the Chinese home appliance market has obviously tended to be saturated in recent years, and products are seriously homogenized. It is an indisputable fact that the industry needs to bring new profit growth points through transformation. The accelerated development of 5G commercialization and IoT has also pointed out the direction for home appliance companies. Therefore, although the names seem different, everyone's transformation path is the same.

Changed its name to "Trend"

Hisense Electric issued an announcement stating that the company name is intended to be changed from "Qingdao Hisense Electric Co., Ltd." to "Hisense Visual Technology Co., Ltd." and the company's stock abbreviation will be changed from "Hisense Electric" to "Hisense Visual".

As for the reason for the name change, Hisense's official explanation is that it hopes to continuously accumulate core technologies such as image quality chip technology, image quality algorithms, and full-scene AI ecology in the future, to form an ecological core supported by video and display technology and based on a smart cloud platform, and to extend it widely to areas such as smart homes and smart commercial use.

According to information disclosed by Hisense, its video industry revenue, including high-definition smart display terminals, new display, and operation services, accounts for more than 90% of its operating revenue. While restructuring the layout of the video and display industry chain, Hisense has gradually developed from a single TV product manufacturer to a comprehensive solution provider integrating video technology R&D and application, and full-scenario cloud platform operation.

Hisense is not the first home appliance company to change its name. Since last year, home appliance giants have set off a wave of name changes. In June last year, Meiling Electric Appliances said that it planned to change the company's full name from "Hefei Meiling Co., Ltd." to "Changhong Meiling Co., Ltd." At the same time, it planned to change the company's A-share securities abbreviation from "Meiling Electric Appliances" to "Changhong Meiling." The reason for the name change is to consolidate the synergy with the company's controlling shareholder Sichuan Changhong, form a brand synergy, increase the company's visibility and influence, and further expand the market and enhance bargaining power.

At the end of 2018, TCL Group initiated an asset restructuring, and the listed company sold its smart terminals and supporting businesses to the newly formed TCL Industrial. After the restructuring, TCL Industrial focused on smart terminal businesses such as televisions, home appliances, and mobile phones, as well as related supporting businesses such as e-commerce, logistics, and call centers; On November 4, TCL Group issued an announcement stating that the company's subsidiary "Shenzhen Huaxing Optoelectronics Technology Co., Ltd." was officially renamed "TCL Huaxing Optoelectronics Technology Co., Ltd.". The renamed TCL Huaxing Optoelectronics Technology Co., Ltd. is TCL Group's semiconductor display and material business operations, as well as the management platform for the layout and coordination of the upstream and downstream industrial chains.

In June this year, "Qingdao Haier Co., Ltd." was renamed "Haier Smart Home Co., Ltd." and the stock abbreviation was also changed from "Qingdao Haier" to "Haier Smart Home"; on July 8, Skyworth Digital announced that the company name has been changed from "Skyworth Digital" to "Skyworth Group".

Traditional market downturn

According to the data from Aowei Cloud Network, the sales volume of the domestic color TV market in the third quarter was 10.34 million units, a year-on-year decrease of 3.6%; the sales revenue was 27.7 billion yuan, a year-on-year decrease of 10.4%. Since the fourth quarter of 2018, it has continued to decline for four consecutive quarters.

As for the last quarter of this year, despite the stimulation of the "Double 11" "annual carnival promotion node", Aowei Cloud Network still predicts that the fourth quarter will not "reduce" the annual sales volume of this year. Aowei Cloud Network predicts that the annual sales volume is expected to be 46.33 million units, a year-on-year decline of 3.2%, and the annual sales revenue is about 133.7 billion yuan, a year-on-year decline of about 10 percentage points. This year, the national color TV retail volume and retail sales will "both decline".

The depression of the color TV industry is a microcosm of the development of the entire home appliance market. In the view of industry observer Hong Shibin, on the one hand, it is because the real estate market is in a downturn and there is insufficient motivation to replace home appliances; on the other hand, it is because the home appliance market has reached a saturation period.

Under such market conditions, many home appliance companies must diversify and transform. Major General Ding, an industrial and economic observer, pointed out that when the main business changes, the company's name change is a normal strategic name change.

On the other hand, Liang Zhenpeng, an appliance analyst, said that the name changes of home appliance companies are concentrated in listed companies, and one of the main reasons for listed companies to change their names is to increase their stock prices. "Because the A-share capital market has been hovering at a low level for a long time, the price-earnings ratio of many home appliance companies cannot even reach 10%-15%. In this case, home appliance companies are considered a traditional industry, and their valuation in the capital market is even less optimistic."

"So most home appliance companies have a motive for changing their names. First, they will remove the word 'home appliances' from the name of the stock market, so that it seems that it is not only a home appliance company. For example, 'Skyworth Digital' was renamed 'Skyworth Group', and the group's business scope has expanded. And 'Qingdao Haier' was changed to 'Haier Smart Home', which sounds a level higher than the traditional home appliance industry; 'Hisense Electric' was renamed 'Hisense Visual', which looks like a more professional display company. The upstream and downstream industries related to the visual industry, laser projection, and laser display can all be included. Moreover, laser display is now a field that is more favored by the capital market." Liang Zhenpeng said.

As a Hisense insider said, "Hisense has been developing for 50 years, but people still think of us as an appliance manufacturer, just like the latest wine in an old bottle. We don't want to stay in the appliance field only, but hope to expand into education, medical care, roads, smart homes, exhibitions and other fields through video display. But if we want to achieve these developments, it is definitely not something that electrical appliances can cover."

Different transformation directions

Major General Ding believes that there are generally three directions for the transformation of home appliance companies in the future: one is deep smart home, becoming an ecological platform enterprise, or becoming part of an ecological platform; the second is to expand the B-end market and achieve dual-wheel drive between the C-end and the B-end; the third is to extend the layout to the upstream and downstream of the industrial chain and enhance overall competitiveness.

TCL Industrial is also strengthening the construction of artificial intelligence scene experience and application service capabilities, and with the cloud platform as the core, it is building cloud, pipe and terminal capabilities, building an open IoT platform, promoting an interconnected, intelligent and healthy ecosystem, and realizing the full-scene integration of hardware + software + everything connected.

"Many home appliance companies are trying their best to transform themselves into comprehensive technology companies. This will open up greater space for business development for the companies. There is nothing wrong with this approach, and the integration of home appliance technology and smart Internet is also a general trend," Liang Zhenpeng added.

For example, TCL Group has extended its layout upstream and made efforts in the semiconductor, panel and other industries. This is based on the fact that screens will be everywhere, cloud applications will be everywhere, and customers will be everywhere in the future. TVs will not only be the center of the family's smart living room, but also the application platform and link for various scenarios.