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Home  > Knowledge  >  LeEco’s Acquisition of Vizio to Propel Asian TV Brands Global LCD Market Share to 70%

LeEco’s Acquisition of Vizio to Propel Asian TV Brands Global LCD Market Share to 70%

2016-07-29

With the domestic market approaching saturation, branded Chinese LCD TV vendors see overseas expansion as the only means to grow their market shares and raise their brand recognition. The latest example of this approach is the acquisition of the U.S.-based consumer electronics maker VIZIO by LeEco, a rising Internet brand in the Chinese LCD TV market. Reports of VIZIO being up for sale gained traction after Foxconn’s acquisition of Sharp, and the US $2 billion deal with LeEco was finally announced on July 27.

Following the acquisition, the combined shipments of LCD TV sets from LeEco and VIZIO will reach 14.57 million units this year, according to WitsView, a division of TrendForce. In the annual global shipment ranking, LeEco will become one of the top five vendors and surpass compatriot brands Hisense and TCL to take the third spot. On the whole, this deal has significantly altered the competitive landscape of the global LCD TV market. 

In addition to being known for offering LCD TVs with high cost-performance ratios, LeEco has further differentiated itself from competitors by selling subscriptions to its Internet TV channels. As most of its revenue comes from streaming video subscribers, LeEco intends to use the VIZIO brand to enter the North American market and replicate its business model there. However, LeEco will have more difficulty in getting subscribers in North America than in China due to competition from the region’s major video streaming platforms such as Netflix. Nonetheless, LeEco can still succeed in North America by selling TVs at extremely low prices. By driving up its sales volume dramatically, the Chinese brand would make a significant impact on the ecosystem of the local LCD TV industry and the consumer perception. At the same time, LeEco could also squeeze the market shares of other first-tier brands in North America.

The consolidation of LeEco and VIZIO will also pose a huge challenge for South Korean TV brands. Taking account of the acquisition, WitsView’s latest analysis projects that the combined shipments of Chinese brands will reach 74.1 million units this year, whereas the combined shipments of South Korean brands will arrive at 77 million units. Together, Chinese and South Korean vendors are expected to account for 70% of the global LCD TV market. In the future, major international brands will continue to enlarge their market shares at the expense of regional brands and vendors of niche TV sets.

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