"Internet +" gave birth to the competition pattern of home appliances industry


"Internet +" has completely changed the home appliance industry. Under the impact of the Internet tide, the competition in China's home appliance industry is changing from a cold hardware competition to a competition model of “set software, hardware, content, service, and operation into one”, and various types of old business models are “damaged”. "Innovation" emerges in an endless stream and it is rebuilding the industry's competitive landscape.


The so-called "Internet +" refers to the proliferation of Internet-based information technology (including mobile Internet, cloud computing, big data technology, etc.) in various sectors of economic and social life. As a general purpose technology, the Internet, like the steam power technology of 100 years ago and the steam engine technology of 200 years ago, will have a huge, far-reaching and extensive impact on the human economy and society. At the Third Session of the Twelfth National People's Congress on March 5, 2015, Premier Li Keqiang proposed the Internet + Action Plan for the first time in the government work report. The Internet + Action Plan will focus on promoting the integration of new generation information technology represented by cloud computing, Internet of things, and big data with modern manufacturing and producer services, and developing and expanding new business opportunities. This is also the development of China's home appliance industry. Bring huge challenges and attractive business opportunities.

Appliance Industry Presents Two Development Paths in the "Internet Plus" Era

With the advent of the "Internet Plus" era, the home appliance industry has presented two development paths. One is the hardware route, which is mainly dominated by foreign brands. For example, TV companies with Samsung, LG, Sharp and other upstream LCD panel resources highlight the “hardware” advantage, and vigorously develop OLED TVs, QD TVs, and curved surfaces. TVs and other new display technology products, domestic Hisense, Skyworth and other brands are also walking on this hardware route, the regret is that it can always follow the upper reaches of foreign resources to grasp the foreign brands.

Another is the "software definition and integration into the hardware" intelligent route of home appliances, which is mainly led by another way of domestic brands, Changhong, Haier, Konka and other brands, for example, China's domestic Internet industry is developing stronger and stronger Some Chinese TV companies are closely integrated with the Internet industry, and they have their own characteristics. For example, CHiQ's second-generation TV, which Changhong launched on March 26 this year, has the ability to cooperate with the "Mobile Core + TV Core," with powerful cloud services. The collaboration of the big data processing platform has super information computing, storage, analysis and processing capabilities, and has become the center of smart applications and content interaction in the mobile Internet ecosystem.

China's home appliance industry is rapidly integrating with the Internet industry to achieve transformation and upgrading. "Internet+" represents a new economic form, which is to give full play to the optimization and integration of the Internet in the allocation of production factors, integrate the innovation results of the Internet into all sectors of the economy and society, and enhance the innovation and productivity of the real economy. The formation of a wider range of new forms of economic development based on the Internet as an infrastructure and implementation tool.

Future consumption upgrade will continue to be the main driving force for the development of China's home appliance industry. High-end, atmospheric, and upscale smart appliances will gradually become the main consumer trends in the home appliance market. In the future, people will enjoy the time-saving, convenient and controllable smart home appliances. Smart home appliances will bring unprecedented home experiences to people, and home appliances in the future will all be smart and connected. Although these scenes are only imaginations for the future and stay at the conceptual level, they are indeed the future direction of smart home appliances. Therefore, the home appliance smart route of "software definition and integration into hardware" will become the main route for the development of the Chinese home appliance industry.

Smart Appliances Will Do Destructive Innovation of Old Business Models

In the “Internet+” era, the competition in the home appliance industry has evolved from a pure hardware competition to a system integration level. Smart has expanded the functionality of a single home appliance. Taking a smart TV as an example, users can uninstall and install their favorite applications.
Make smart TV a personalized home entertainment device. In addition to watching video programs, smart TVs also carry more functions such as games, shopping, social networking, and education. The role of smart TVs in the industrial chain has increased and the profit model has been expanded. Smart appliances that cover more products are completely changing people’s lifestyles. Behind this huge change, many market segments are hidden.

The traditional business model of relying on one-time sales of hardware equipment to make money will be crushed by the “Internet+”. After entering the home appliance industry, IT and Internet companies attempt to “carry over”, and traditional household appliance giants have also made new strategic adjustments. Actively embrace the Internet in an all-round way, subvert the traditional thinking logic with “Internet +” R&D thinking, conduct “destructive innovation”, and fully mine the value of data under the precondition of ensuring user information security, “terminal + data + content + service "The new business model is in the smart home appliance industry.

For example, in Changhong's new three-axis strategic system, for the first time, intelligence, networking, and collaboration are proposed as the direction of force for the new three-coordinate system, through various types of intelligent terminals, and networked cloud service platforms. The corresponding big data business model development, and then the introduction of collaborative integrated solutions, eventually activated Changhong original home appliances, mobile phones, communications, information and other home appliances business in the Internet era, thus releasing new competitiveness in the consumer market.

After entering the era of smart TVs, the color TV industry is moving from “watching TV” to the current “playing TV” and is transitioning to the “use of TV” integrated into the smart home field. Therefore, before the industry's many game rules and operating models have to be re-introduced, and re-find new profit orientation. The more companies understand users, the closer they are to users, the more profitable it will be.

The "Internet +" era of home appliances industry is reshaping the competitive landscape

The essence of "Internet Plus" is the online and digitalization of traditional industries. Under such circumstances, if the traditional home appliance manufacturing industry does not accelerate the transition to the Internet, it is bound to be a dead end. Today, the traditional home appliance companies represented by Changhong, TCL, Hisense, and Skyworth are taking the smart strategy as the traction and making the transition to the Internet. In the future, the competition in smart home appliances will also expand from the competition between product hardware and prices to the competition of platforms that integrate content, operations, and services.

Under the impact of the Internet wave and cross-border competition, the product form, business model, competitive landscape, and industrial ecology of the home appliance industry are still in the “time”. The competition in the smart home appliance industry will become more intense and the competition will become systematic.

In Europe, America, and Japan, some traditional home appliance giants focused on hardware are gradually withdrawing from the market due to the great changes brought about by the era of smart home appliances. The competitive landscape of the home appliance industry in China and even the world is being rebuilt. In the “Internet Plus” era, the survival of the fittest is the hard truth.

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