Philippines TV Market Share, Competition, Growth and Industry attractiveness

TV belongs to the category of household appliances. So the TV market size is closely connected to family quantity and population of the country.

At the moment of writing, Philippines has an around a total of 20 million families. Among them which are the 85 percent have already owned at least one TV set. Therefore, an around a total of 17 million families are TV users. Supposing TV’s life span will exist up to 10 years. This figure translate that annually, there are around a total of 1.7 million new TV to be buy that will share by different TV brand in the market. 

TV competition in Philippines Market

At the moment, the top three players occupy an around half of Philippines TV market, which as follows; Samsung, Sony and LG.

While the second class TV brands which acquires more or less 35 percent of the market are the following, Skyworth, Sharp, TCL, Haier and DEVANT.

And the rest of the TV market is competed by Changhong, Hyundai, Toshiba, Panasonic, EZY, Pensonic, HK TV, Nova, and many other TV brands.

TV Market growth rate and stage in growth cycle

According to the study Filipino people have an average age of 23 years old to form a family. Therefore, every year many young Filipino people have form a new family. This figure translate into the expectation of TV market here in the Philippines will grow at around 10 percent yearly.

TV Industry profitability in the Philippines

TV industry here in the Philippines comes in serious competition. There are more than 10 players in this market and each of them is going stronger every year. That’s why the industry profitability is very low. Almost half of them even face loses every year.

Analysis of TV competition and it’s environment.

Five forces in TV industry
The five factors of competition in the Philippine TV industry are the following;

• Threat of new entrants to a market.
• Bargaining power of suppliers.
• Bargaining power of customers (“buyers”).
• Threat of substitute products.
• Degree of competitive rivalry.

Threat of new entrants: many new establish players are planning to jump into TV industry, such as Apple, Google, OEM brands and other China brands. However, compare with the mobile phones industry, the TV industry is more capital-concentrated and require a big scale to reach economic manufacturing. Therefore, the threat of new entrants is moderate.

Bargaining power of suppliers: The most important suppliers for TV industry are panel supplier and micro chip supplier. But compare to them, TV manufacturers are also strong. Therefore, bargaining power of suppliers is moderate.

Bargaining power of customers:  nowadays customers have many choices for choosing a TV. Thus their bargaining power is really high.

Threats of substitute products: more and more young Filipino people are spending less time watching TV program, movies or playing with video game. Instead, most young Filipino nowadays are spending more time in front their smart phones and laptops. Therefore, the substitution of smart phones and laptops to TV is really high.

Degree of competitive rivalry: as mentioned above, degree of competitive rivalry is very high. Price wars happened in the daily basis. And it turns out into a very few profit margin between companies that will probably resulting to cost cuts and lay off.

With the above information, the TV industry here in the Philippines is really tough for all kind of players. If one cannot able to cope with the competition it will surely fail to survive.

Identify drivers of change and it’s possible impact to the TV industry

As mentioned earlier in this post, the Philippine TV industry has positive development in the long term. The market will increase to an around 10 percent every year. And as the electronic commerce continue to improved, innovate and developed new technology that help the company to reduce cost, the industry will survive. But this innovation will also eliminate some jobs.

When it comes to the potential buyers, it is expected they’re a young people, thus they will be easy to accept new technologies, cool design, as well as excellent but affordable new brand from new players.

Other factors are the new TV technologies are emerging. Such as new display technology as ultra high definition (in short: UHD), OLED panel, new operation system such as Android OS. Those brands that cannot follow up the new technologies and develop their competitive product will face out.

And since, the introduction and the development of a new TV product and TV technology is come so fast. The TV model lifespan becomes shorter and shorter. Where in every 3 to 6 months a new model is introduced and the old model will change or gone obsolete. This factor may result and bring high challenges to the Research and Development department and the supply chain management department.

Major competing group and their strategies.

Samsung: Samsung is currently the leader in TV industry. Its strategy is technology leading orientation. It focuses on big size such as 46 inch to 80 inch TV. It always plans to introduce next generation display panel.

SONY: SONY plan to push UHD technology, which will have extreme clear picture quality as 4320*2160, known as 4K*2K.

Other Chinese brands as Skyworth, TCL and Haier, will focus on UHD technology too. At the same time, they will widely adopt Android operation system in their smart TV with very competitive price.

The factor of success in TV Industry

Technology and products
Like other consumer electronics product, good product is NO.1 factors to succeed in the competition.

Supply chain management
The product life time is becoming shorter and shorter. And the price is prone to mark down from time to time. Therefore, the supply chain management will play a key role in competition. The product is needed to deliver on time.

Sales and Marketing.
Sales and Marketing is another key factor. It should be fast and future oriented. Nowadays, sales and marketing style is changing rapidly. Billboard and bus or cab advertisement are gone obsolete rather they all go online. Likewise, the mortar and brick physical store is less effective. New generation embrace online stores.

After Sales
After sales service is always neglected and less priority when it comes to TV industry and other home appliances which I think a big mistakes. As a consumer, I care the most with my after sales.

TV Industry attractiveness and possible competitive strength

Industry attractiveness:
TV industry is an increasing industry. Philippines have the largest and youngest population. Which the market has positive prospect.

Competitive strength of Chinese Brand TV:
Low cost, to achieve it the manufacturing and labor cost is should be low but the quality will retain. Chinese TV brand is also active to adopt new technologies and develop new products. Finally, its company culture is aggressive and good at marketing.

Identify the strategic issues for TV Industry.

Since new technologies and products are emerging in TV industry, a new player should grasp the opportunities to overtake its competitors. As new brand in Philippine market, it should make itself product-oriented. It should also have strong supply chain management and ally its suppliers to win the competition. As a low brand profile, it should also focus on brand exposure as well as adopting aggressive marketing action. In short, it should make its products ”Excellent and Affordable” .