Into the Hisense series of reports: Fulfilling the contract with Sharp to continue the North American market

[Global Science and Technology July 31 reported that special correspondent Chen Yan] In 2016, Hisense Group's revenue rose from 99 billion yuan in 2015 to 103.3 billion yuan, for the first time to reach 100 billion yuan. Hisense is developing from a home appliance company focusing on televisions and refrigerators to road traffic intelligence, smart communities, and medical image analysis.

TV is still an important part of Hisense's business. According to figures released by China Yikang Data, since 2004, Hisense has ranked first in China's flat-panel TV market for 13 consecutive years. From the HIS data, Hisense's TV shipments ranks third in the world. Hisense will also attach importance to television services in the future.

The Global Network special correspondent obtained the latest figures of its sales in the US market from Hisense: From January to June 2017, Hisense US brand sales volume increased by 97.7% year-on-year, and sales increased by 100.7% year-on-year. During the same period, Hisense's brand sales in Europe increased by 16.0% year-on-year, while brand sales in Australia increased by 47.7%. In South Africa, Hisense has become the first TV brand in the local market. From January to May 2017, Hisense South Africa's TV sales accounted for 19.7% of sales, and refrigerator sales accounted for 24.1%, ranking first.

From the market perspective, the North American market is particularly strong. This was in parallel with Sharp's 2015 search for Hisense, hoping that Sea Trust would manage its brand in the North American market, using the Sharp brand to sell televisions in North America. Since 2016, Hisense's products have begun to use Sharp's brand in part, and through the takeover of the Sharp Mexico plant, they have increased the efficiency of Mexican factories in a short period of time, reformed the supply cycle of the U.S. market, drastically shortened the lead time, and reorganized. The North American market laid the foundation for Hisense’s rapid increase in North American market share.

The situation drastically changed. After Sharp signed its North American brand's contract with Hisense in the five years after 2016, in August 2016, due to severe mismanagement, it was forced to sell to Hon Hai Precision (more people in China know about it.) Company "Foxconn"). With Hon Hai’s full involvement in Sharp’s operations, Sharp regained its vitality and began to look for opportunities to reclaim his right to use branded products from Hisense. According to relevant reports, after Hon Hai’s acquisition of Sharp in 2016, it has filed several lawsuits in courts in the United States and elsewhere, requesting the recovery of Sharp's use rights in North America. Some lawsuits were withdrawn after one week of submission, giving people a rather rough feeling of behavior.

On the one hand, Hisense continued to use TV as its main business and continuously promoted television research and development. TV brought great benefits to Hisense. On the other hand, Hisense has just developed in the North American market, through the Mexican plant, to North America. The adjustment of sales channels has just entered the stage of recycling benefits. At this time, Hon Hai’s lawsuits brought by Sharp in the United States and other places have caused a stir. How does Hisense respond? Special reporters from this site interviewed Zhu Xi, deputy general manager of Qingdao Hisense International Marketing Co., Ltd.

Global Network: After Hisense requested Sharp in 2015 to obtain its trademark rights in the North American market, how does Hisense feel about the use of Sharp's trademark?

Zhu Xi: First of all, we think that Sharp is a very good brand and has a very good position and a good reputation in the eyes of consumers. After hosting the Sharp brand, we focused on the excellent resources of Hisense Group, dispatched elite troops, revived the Sharp Mexico factory, and restored channel confidence. From the perspective of R&D, Sharp's R&D has once stopped, and we have injected Hisense ULED's advanced picture quality enhancement technology.

After hosting the Sharp brand, Hisense spared no effort and paid great efforts to maintain Sharp's brand in North America. Through these efforts, Sharp's performance and sales in the market have been greatly improved. We are also very optimistic about the Sharp hosting. Prospects. Hisense has launched high-quality Sharp brand products and has been recognized by local mainstream channels and third-party professional evaluation agencies and consumers in the US market.

Global Network: Can we give some specific figures?

Zhu Xi: In 2017, the total TV sales of the Sharp brand in the US market increased by 47% over the same period. What's more important, the growth rate in 4K TVs, that is, the growth of high-definition 4K TVs we say, is our growth rate. 360%. Hisense operates and operates the Sharp brand as a premium brand. Sharp's 4K TV has a market share in the United States. It is estimated that it will reach 7.8% by the end of this year. This is the result of the work and expected results of our custody. From the perspective of this half year, the progress has been very good.

Global Net: However, we noticed that Sharp had prosecuted Hisson for small reasons in New York and other places last year. Some media reported that its purpose was to return the Sharp brand right from Hisense.

Zhu Xi: I want to talk about the background of things first.

When Hisense and Sharp talked about hosting their North American market brands, the Sharp team valued our technological superiority and overseas operations ability. It was Sharp's initiative to put its brand in North America into the scope of negotiations, hoping that Hisense would consider mergers and acquisitions. The history of the situation.

After the two parties reached an agreement, Sharp was very happy with Hisense's cooperation in plant operations and brand operations. Both parties were very satisfied.

After Foxconn (Hon Hai) acquired Sharp, Sharp replaced a new president. He unilaterally announced to the media that Sharp's brand in North America had not been communicated with Hisense before this. Hisense believes that this shows that there is no contract spirit and it is a great disrespect to Hisense.

Global Network: In this case, is it understandable that Hisense will continue to implement the contract?

Zhu Xi: Yes. We believe that the spirit of contract is the basis of the market economy. Hisense must fully comply with the trademark commitments that were reached at that time and continue to produce and sell Sharp brand TVs in North America. Hisense will earnestly perform the contract and strive to promote the Sharp brand and products.

Global Net: According to reports, in July this year, Sharp said that Hisense has infringed on its intellectual property rights and proposed compensation. The author saw the Japanese media use the phrase "prank" to cover Sharp's practice. How does Hisense see Sharp's "prank"?

Zhu Wei: Sharp's lawsuit, related matters handled by our lawyers, we do not comment here. One thing that needs to be clarified is that Hisense never makes trouble, but it is not afraid of anything. Hisense insists on using legitimate means to safeguard its legitimate rights and interests. Hisense has a history of nearly 50 years and has accumulated many patents on televisions. We will continue to promote Sharp's brands and products and earnestly perform contracts.

Global Network: Now Hon Hai wants to sell Sharp branded high-end TVs in the United States. How does this affect your strategy?

Zhu Xi: Let me first talk about Hisense's strategy.

Hisense has always been committed to making the Hisense brand a world-class brand. Our core strategy is high-quality mid-price. We will gradually increase the market share of medium and high-end products in various target markets through technological advancement, product pull, and channel expansion. After the implementation of this decade's overseas strategy, it can be seen that most of the regional channels have accepted Hisense's strategy.

Currently, Hisense has established a very solid cooperative relationship with mainstream channels in the United States, Europe, Asia Pacific, and the Middle East, and has entered mainstream channels such as Best Buy and Wal-Mart in the United States. Hisense's market share is growing very fast, higher than Sharp. In 2016, Hisense TV topped the market in South Africa and Australia, and it was the first in a few months. In Europe, Hisense also formed a strategic partnership with Germany’s second largest chain of channels to jointly promote the development and layout of Hisense’s high-end products in the European market.

Global Network: What is the situation in Japan?

Zhu Xi: In Japan, Hisense has the highest share of brands other than local brands in the Japanese market. Hisense Japan was established at the end of 2010. In March 2011, TV products were officially launched. In 2014, refrigerators and washing machines entered the Japanese market in 2016. Air-conditioning products will also enter the Japanese market in 2018.

At present, Hisense brand products have entered five major supermarket chains and discount stores in Japan. Hisense Japan purchased real estate in March 2015 and December 2016 as the center of after-sales service. In 2017, the Japanese market is expected to achieve sales revenue of 10 billion yen. From GFK third-party data, Hisense Japan’s sales volume can reach 4.6%.

Looking further afield, Hisense TV's global shipments ranked third in 2016, second only to Samsung and LG. Television is an important business area of ​​Hisense. We also learned that Hon Hai proposed a new US strategy to sell high-end television there. However, the strategy of Hisense for many years is very clear. The facts prove that our strategy is effective. Hisense grew up in a fierce market competition environment. Hon Hai’s move will not shake our product strategy of promoting high technology.

Global Network: Why Hisense is so confident?

Zhu Wei: Because we have established seven R&D centers overseas and have the ability to conduct targeted development and design for the special needs of consumers in the local market, no matter for quality, performance, or design, we dare to accept various challenges.

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