Can color power plant sub-brands and Internet companies win?

On the afternoon of April 24, a reporter from the First Financial Daily visited Shenzhen Shiyan Industrial Park to visit Wang Zhiguo, chairman of Skyworth Cool Open. After the 80s, wearing a lavender shirt, brown body pants and NEWBALANCE shoes, in the office of Skyworth Software Institute, more like a product manager. At noon, they will "play" TV in the office.

Cool Open has officially operated independently since April 1, 2015. Wang Zhiguo told reporters that in the past half a month, he was busy with new products in the fall; secondly, he re-positioned with a busy open air. “You can still stand on the shoulders of traditional industries, but you cannot stand for long periods of time. Others' patterns are fast. Going forward, we must also move forward. We are prepared to dock with the capital market as soon as possible."

Wang Zhiguo disclosed that CoolOpen is approaching investors and has drawn up plans for round A, round B financing and listing on the New Third Board.

In fact, Kukai and Wang Zhiguo are more like commandos. Before Internet companies dissolved the traditional color TV hardware profit model, they found "Noah's Ark" and achieved breakthrough.

AVC (AVC)'s TV market report for the first quarter of 2015 showed that in the first quarter of 2015, the domestic color TV market picked up, and its sales volume increased by 13% year-on-year. However, traditional color power plants are not without pressure. Judging from the competitive landscape, domestic brand retail sales share is 87.7%, Japanese brand retail share is 6.9%, and Korean brand retail share is 5.4%. "The rise of Internet brands has boosted the domestic brand share by 0.8% year-on-year, and it has also captured the market share of traditional domestic brands. The game between old and new forces has become even fiercer. The market share of Internet brands in first-quarter retail sales increased by 5 percentage points year-on-year. 8%."


Behind this is the rapid rise of e-commerce channels. In the first quarter of 2015, the total retail volume of color TV in the domestic online market was 2.45 million units, an increase of 117% year-on-year, accounting for 20% of the overall color TV market. E-commerce has become the normal channel for color TVs. It is expected that in the whole year of 2015, the proportion of e-commerce channels in the domestic color TV market will increase further to 25%. With domestic TV sets selling more than 40 million units a year, online TV sales in 2015 will reach 10 million units, and online competition is surging.

It is no wonder that Liu Hongxin, the vice president of Hisense Group, said: "VIDAA will independently become a subsidiary of Hisense's sub-brands for young people, in order to distinguish itself from Hisense's brand and product tones and actively participate in the struggle for new generations in the era of mobile internet."

And Yang Dongwen, president of Skyworth Group, once told the reporter of the First Financial Daily that “there is no grass under the big tree”. Skyworth allows Cool Open to operate independently, that is, they want Wang Zhiguo to work directly with Xiaomi and LeTV.

Wang Zhiguo joined Skyworth in 2009 and founded the Skyworth Software Research Institute. In 2013, Skyworth launched the "Tianci System" for smart TV operations (later renamed "Cool Open System"). He admitted that he had been very confused when he started to serve as chairman of Coocaa in 2014. He didn't sell or sell, but he sold a lot of money. "You lose even your pants."

In fact, the traditional color power plant set up an Internet sub-brand, the original intention is obvious: after years of accumulation of the main brand has a brand premium, can not be washed in order to rush to the brand online price premium. Wang Zhiguo, for example, said that Skyworth's TV line sells for 2,499 yuan, and it may sell 2,399 yuan online, but rivals, the size of the TV, sell 1999 yuan. What to do? Therefore, there must be cool to "combat".

In 2015, Konka KKTV actively “put a price”, and Kukai also attacked him very badly. Millet TV 2 just announced 40 inches 1999 yuan, cool open A43 43 inches also sold 1999 yuan.

However, simply fighting for low prices is not a way out. "In the beginning, you could click, but because you were losing money and your channels were losing money, soon everyone would not be willing to put this product down. Second, after consumers recognized your price, the value of the brand you do later will be Like Xiaomi, there is no need to sell a little more expensive, "Wang Zhiguo said.

Therefore, the key is to create a new road and explore new business models in the "Blue Ocean" of user value management.


Wang Zhiguo frankly stated that the advantage of the sub-brand is that the supply chain and production resources can be guaranteed from the parent company; but the disadvantage is that it is dependent on the parent company and is not completely independent. (At present, the vice president of Hisense Electric and Haishi cloud CEO Yu Zhitao are VIDAA3. Product Manager; Konka Multimedia Sales Sales General Manager Zhang Junbo is the KKTV Director). For example, before CCTV's pricing starts in 2014, it is necessary to make a report to the headquarter of Skyworth TV.

Therefore, since the 2015 fiscal year, Coolo has conducted bolder explorations, financial independence, and self-financing, and market decisions (including pricing) are completely independent.

This is not enough. Because the capital market sees Skyworth from the perspective of hardware manufacturers, and LeTV and Xiaomi from the viewpoint of the Internet, the valuation multiples are far from being reached. A vivid example is that after Great Wall Broadband launched its "barley TV" in 2015 under the "Dr. Peng" valuation, it has been tripled. Therefore, Wang Zhiguo believes that "we fight against the strong opponents of capital and really lose money."

In his view, the key to winning this battle is to dock the capital market. The new three board is the goal of the cool happy instrument.

The benefits of docking the capital market are: First, improve the ecosystem to support the new model. Wang Zhiguo can clearly see that A43 can stop Xiaomi TV2, but Xiaomi is even more worrying about its layout of the entire smart family ecosystem. The First Financial Daily reporter listened to the head of Xiaomi Smart Home during the 2015 China Electronic Information Expo and said that in the next few years, it will join hundreds of domestic real estate developers and hundreds of real estate projects to push Xiaomi Smart Home Products, including Xiaomi TV. . Only after entering the capital market can CoolCube expand the value of the user's operations. Through the acquisition, the ecosystem can be quickly improved and the Xiaomi can be "worsened."

Second, strengthen team motivation. In recent years, Internet companies, including BAT's Big Three, have dug people from traditional color power plants to grab big cakes for smart TVs. For example, Xiaomi Duo sees Vice President Dai Qingsong, who was once the Skyworth CoolTV CTO; Youku TV's R&D team leader Su Wenhua, who also served as Skyworth Cool Open's deputy general manager. Wang Zhiguo revealed that the cool-opening team's equity fierce plan has already been made; the future of Cool Group's team (5 to 10 people per group, operating different projects, serving more than 1 million users) may also be possible. Independently operates for subsidiaries.

The premise of the capital market is that there is a convincing story. Wang Zhiguo said that the Cool Open system has accumulated tens of millions of active users. In 2015, CoolTV will sell 1.5 million units, and sales revenue will reach 3 billion yuan, basically achieving break-even. More importantly, it is precisely targeting users and finding users who are willing to pay. In April 2015, Coolcam launched a "3 in 1" smart TV. When the elderly, young people and children use it, they have different UIs (user interfaces) and different content pushes. This not only improves the user experience, but also improves the user's operation." ".

It is estimated that the market size of smart TV value-added services will reach 50 billion in 2017 and will become a trillion-level market in the future. Hisense VIDAA put value-added services on video, games, shopping, education, telemedicine, and smart homes. Skyworth Cool open value-added services are also similar. Wang Zhiguo revealed that in addition to videos and games, recent television shopping surprised him. "Testing water" has 1,000 TVs and the sales revenue for three days is 5,000 yuan. He envisages that if a certain TV is always using the old man's remote control, Cool Open will definitely recommend information on daily necessities, and it can be purchased, delivered to the door, and cashed on delivery.

LeTV's "content + hardware" model and Xiaomi's "fan economy" have brought traditional thinking and market pressure to traditional color TV companies. However, supply chain and offline channels are short, but Levision sells through "LePar." The outlets also penetrated down the line. The traditional color TV's Internet sub-brand "Leading skills to control foreigners", like Cool Open will use its own online mall to reduce channel costs. Ultimately, the two PKs, who can win, remains to be seen.


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