CCID Consulting Analyzes China's LCD Display Market in 2008Q3

In 2008Q3, the sales volume of China’s LCD display market reached 3.176 million sets, up 47.1% year-on-year and 23.5% over 2008Q2. The market remained steady. As for LCD sizes, 19" LCD’s share reached 68.0%; bigger, 19" and over LCDs reached 19.2% in share, up 84.7% year-on-year and 22.8% over 2008Q2, which shows the trend of the LCD market in the future.

The 2008 China’s LCD display market was disappointing. All manufacturers suffered tremendous pressure; competition pattern presents Matthew effect. Affected by the financial crisis, the plunge in demand points to a groom prospect. With stocks piling up, price drop of LCD panel becomes inevitable. China’s economy continues develop rapidly, but affected by the imbalanced regional growth, demand for LCD displays have saturated; affected by the global financial crisis, China’s SMB enterprises have fallen sharply due to cost cuts.

In 2008, leading brands adjusted pricing downwards to strengthen market position, that for example, Samsung narrowed the price gap with AOC. These strategies were proved to be effective with second-line and third line brands’ seeing falling sales figures. These brands would have to take their prices down further, being not able to realize a large-scale production cost advantage and upstream negotiation advantage. As market leader, Samsung’s price trend is market’s wine vane: on the basis of existing production plan, Samsung acquires more market advantage with temporary profit sacrifice, which forms great pressure to other manufacturers; Samsung’s price drop drives its development. Affected by Samsung and other brands’ price impact, AOC’s market share reduces. LG adopts active pricing and price drop strategy so as to keep stable market position. Great Wall’s share fluctuates greatly. ViewSonic is always in passive status.

Figure1 Major China’s LCD Display Market Shares, Jan.-Sept., 2008

　　
Source: CCID Consulting, Oct. 2008

In the first three quarters in 2008, China’s LCD display brands’ major sizes include 19", 20" and 22". In 2008Q3, manufacturers’ price war is heating up. 19" LCD display’s average price decreased to 1,095 Yuan in Sept., 22" LCD display’s average price decreased to 1,641Yuan. It is forecasted that price drop is still one of the important trends of China’s LCD display market in the future. However, manufacturers should avoid excessive price competition’s negative impact; they should adopt diversified development strategy to apply market competition, such as to improve product performances, dynamic contrast and color gamut, reduce cost, cooperate with upstream manufacturers to launch 16：9 products, and enlarge investment in large screen products. More and more 24" and 26" products will appear in the market with low profiles.

Table 1 Major China’s LCD Display Brands’ Prices Jan.-Sept., 2008

Source: CCID Consulting, Oct. 2008

Table 2 Major China’s LCD Display Brands’ Prices Change, Jan.-Sept., 2008 (By Size)

Source: CCID Consulting, Oct. 2008