How long can LeTV hardware free promotion last?

A careful planning that lasted five months finally turned into the most intuitive sales on September 19th: more than 4.48 billion yuan. Moreover, this figure is also rapidly growing with the extension of activity time. LeTV was quite proud of this, and its chairman and CEO Jia Yueting also updated its latest record in real time on Weibo. In addition, analysts in the industry affirmed LeTV's ability to create knots, saying that this time the "buy member send hardware" marketing model can effectively increase product sales.

Jia Yueting

However, people in the industry generally believe that the promotion method is not a new business model. It shows that the nature and rules of competition in the industry cannot be shaken. For a long time, the business model of LeTV’s hardware-neutral pricing and eco-subsidy hardware has been questioned by the outside world. The catfish effect caused by the industry’s entry into the market at a low price posture is also mixed. A number of respondents believe that the fact that LeTV’s hardware is selling more and more at a loss makes it unbearable to its ecology.

In addition, because LeTV insists on promoting the idea of ​​hardware negative-price pricing, from a psychological point of view, it will cause consumers to subconsciously devalue the value of the brand's hardware brand, and even cause consumers to doubt the quality of their hardware.

In this regard, Le Super TV public relations department official told the "China Business" reporter, LeTV as the first generation of products in addition to the detours, the follow-up models have reached the industry-leading level. Moreover, LeTV will have the ability to achieve the goal of selling 6 million units of super TV this year and strive to become the leading brand in the TV industry.

Hardware Free Promotions

On September 19th, the second “Buying Hardware for Members” music festival created by LeTV was on schedule.

According to the sales data of LeTV’s official update, 0:15, LeTV's total ecological sales exceeded 1.36 billion yuan, sales of members exceeded 850 million yuan, super TV sales exceeded 302,000 units, and super mobile phone sales exceeded 204,000; At 15:00, this group of data was updated to 2.9 billion yuan, 1.67 billion yuan, 576,000 units, 452,000 units; at 24:00, the data was refreshed again, reaching 4.48 billion yuan, 2.48 billion yuan, 802,000 units, 1.003 million respectively. unit.

In view of the optimistic growth of sales data, LeTV decided to extend the activity time by 12 hours, and dry it out at 12:00 noon on September 20: the total sales of the eco-system exceeded 4.97 billion yuan, and the total sales of members exceeded 27.1. Billion yuan, Super TV sales exceeded 866,000 units, and super mobile phone sales exceeded 1.178 million units, of which super TV sales exceeded the total sales volume of Tmall "Double Eleven" all TV brands last year, and exceeded last year's "9.19" fans. Festival Super TV sales doubled.

According to the person in charge of LeTV's SuperTV Public Relations Department, the preparation for the festival was lasted for five months. From the moment the “4·14” content eco-commerce festival ended in the first half of this year, it meant the second half of the year. 19” The preparatory cycle for the Music E-commerce Festival began. And LeTV also mobilized all LeTV ecosystems, including Jiayue Ting’s personal microblog, to promote the company. Zhang Zhiwei, president of LeSport's eco-O2O sales platform, even set an oath of “Streaking at 4 Billion Sales Targets”. In addition, on the evening of September 19th, a star-studded live broadcast party also culminated in the Fandie Festival shopping spree.

Undoubtedly, this "buy member to send hardware" fan festival marketing is successful. Liu Xingliang, director of the DCCI Internet Research Institute, pointed out that LeTV has learned how to make festivals in recent years, and how to use this festival to create synergies in marketing.

Enemies

The fact that marketing results have won applause does not mean that LeTV's business model will be smooth.

Dong Min, general manager of AVC Black Power Division, pointed out that LeTV adopted the marketing method of buying content and delivering hardware, completed sales promotion for its own products, and to some extent educated consumers about their paid content knowledge, but The business model is another issue.

In recent years, Jia Yueting has promoted the business model of "platform + content + terminal + application" on many occasions. Nowadays, this model has spanned many fields such as television, mobile phones and automobiles. Taking LeTV as an example, Jia Yueting put forward the concept of ecological subsidy hardware and hardware negative interest pricing, entered the TV market at a low price, and quickly obtained a large amount of sales, thus providing more user bases for LeEco to achieve profitability of ecological content.

In fact, this type of business model that hopes to profit from content has always been subject to industry skepticism. The home appliance industry observer Liang Zhenpeng bluntly stated that currently LeTV's ability to subsidize hardware is not yet strong enough, and the depletion holes generated by hardware-negative pricing will increase as sales increase.

It is worth noting that LeTV, for the first time on September 18, acknowledged the limited nature of its own ecological subsidies. According to the announcement, it is said that the increase in the average size of the panel leads to an increase in the cost of cutting and the impact of comprehensive factors such as the earthquake in Taiwan. The price of the panel has risen too fast and has exceeded the capacity of the LeTV eco-subsidy. It was decided to increase the price of the fourth generation of LeTV Super TV models. 100 yuan to 200 yuan, and the implementation of new prices starting at 12 noon on September 20th.

Liang Zhenpeng said that in order to achieve long-term development, color TV companies must ultimately rely on solid technological innovation to gain consumer recognition by upgrading their brand premium capabilities, performance, and quality, and use technologies like Apple and Samsung to open up. market.

“The color TV industry has been developing hardware for the past 100 years, from the earliest black and white TVs to color TVs, to plasma TVs, LCD TVs, and nowadays OLED TVs,” Liang Zhenpeng further pointed out. The idea of ​​negative profits and software profitability is more detrimental to China's technological innovation.

It is understood that most TV companies in China have relatively weak research and development capabilities, and LCD panels that account for more than 70% of the cost of TVs cannot be produced autonomously and need to be purchased from panel vendors. This is especially true for LeTV, which does not have its own factories. This also means that if too many enterprises are entangled in the price war represented by the negative interest of hardware, TV companies will not have more energy and capital to invest in upstream panel research and development, thus weakening the technological innovation relying on Economic strength.

The pattern is still tortured

Leaving aside the dispute over the feasibility of the business model, Leshi’s marketing tactics relying on “buy members to send hardware” still maintains a surge in sales. The sales data of “9·19” music festival fans also seems to support this point.

In this regard, LETV Super TV public relations department explained that the sales growth of LeTV hardware is due to the user's recognition of LeTV brand, and the sales of LeTV in the first 9 months of this year have been a good improvement. The completion of the 6 million sales target set at the beginning of the next three months will not be too stressful.

The third-party research organization Speed ​​Research Academy released the “2015 List of Domestic Smart TV Brands Concerns” showing that LeTV Super TV brand's attention ratio accounted for 14.2%, ranking first.

However, high attention does not mean high recognition.

The reporter noted that there have been a few complaints from consumers about LeTV. According to the complaint area of ​​the China Quality Miles Consumer Complaint Platform, a surnamed Sun customer stated that he had purchased a LeTV super model with a Super 4 X55 model at Jingdong Mall on July 24th. On-site installation, on the evening of the 26th, discovered that TVs had quality problems, serious light leakage in the four corners and the surrounding areas, and obvious smears on the screen. The light leakage problem was especially concentrated in the two lower corners of the TV. The lamppost inside was visible on the side. In addition, the reporter searched through another website called China Quality Complaint Network and found that there were 118 complaints related to LeTV.

The industry generally believes that LeTV’s hardware-negative pricing and eco-subsidy hardware model can easily leave consumers with an impression of lack of hardware quality. Dong Min also pointed out that traditional brands have stronger advantages in terms of quality, quality control, and supply chain. And operational capabilities.

In addition, in the "9.19" music festival "Buying members to send hardware" promotion, music as a variety of television-type display, film and television members for the longest time to reach 7 years and 6 months. In the past seven years, the reporter consulted LeTV’s head of the Super TV Public Relations Department on how to deal with hardware update iterations. The other party stated that except for the first-generation products, the follow-up models have reached the industry’s leading level and are fully able to Satisfy consumer demand for the next five to seven years.

However, according to a research report on the replacement of global TV sets released by the US market research agency in 2012, as early as 2011, the cycle of television replacement has dropped from 8.4 years to 6.9 years globally.

Although there is no direct relationship between the lifespan of TV members and the hardware life of TVs, it remains to be seen whether consumers can maintain a high degree of loyalty to LeTV's content within a period of 7 years and 6 months. Therefore, for the long-term development of LeTV as a whole, this is also an uncertain factor that cannot be bypassed.

In this regard, Chen Naxing, a researcher at the Institute of Industrial Economics at the Chinese Academy of Social Sciences and director of the SME Research Office, reminded us that the most important thing for the development of a company is user recognition. For LeTV, quality control should be done on both content and hardware. There are quality problems and the harm caused to their own brand is self-evident.