Comparing China's internet companies with their U.S. counterparts, it becomes clear that Chinese firms tend to focus more on business model and marketing innovations, while American tech giants prioritize technological and product-driven advancements. In other words, Chinese internet companies often adopt a "marketing-oriented" strategy, whereas U.S. companies are typically "science and technology-led." This fundamental difference has shaped the trajectories of both markets in distinct ways.
Over the past four years, the Chinese color TV industry has experienced dramatic changes, largely driven by the entry of internet companies. The market became highly competitive and exciting, but this period also brought significant challenges. The turning point came in 2013 when LeTV launched its Super TV, sparking a wave of innovation and disruption. However, what followed was a rapid rise and an equally swift decline, leading to what many now call a "four-year crisis" in the industry.
Despite initial success, the Internet TV sector faced a major downturn. According to data from a research agency, in the first half of 2017, the traditional TV brands still held 69.1% of the retail market, slightly down from the previous year. Meanwhile, Internet TV brands saw their share drop by 4 percentage points to 12%, signaling a tough period for the sector. Some media even described the situation as a “survival or death†stage for Internet TVs.
This shift wasn’t sudden. My prediction in early 2017 that 2017 would be a turning point was based on several key factors: no industry can sustain high growth forever, consumer interest in Internet TVs began to wane, the LeTV crisis eroded public trust, and there were few real technological breakthroughs behind the so-called "innovations."
From an industry perspective, Internet TV introduced a new business model—combining hardware and software for dual revenue streams. But from the consumer side, it failed to deliver a meaningful difference. Without a clear advantage over traditional TVs, the market eventually turned against it.
Looking back, much of the earlier excitement was fueled by aggressive marketing rather than real value. It was a false boom, and the lack of substantive innovation left the sector vulnerable. The core issue is that Chinese internet companies, unlike their U.S. peers, often rely on marketing rather than deep R&D capabilities.
Take LeTV, for example. Once the top-performing Internet TV brand, its sales dropped significantly in 2017. While other brands like Xiaomi and Coolpad managed to maintain a presence, most struggled to keep up. The problem was that Internet TV brands lacked the technical expertise and manufacturing capabilities to compete on quality.
In contrast, traditional TV brands like Skyworth, Hisense, and TCL have built strong reputations through years of investment in R&D and product development. These companies are not easily displaced, and even the arrival of Internet brands couldn't shake their dominance.
Interestingly, it was the entry of foreign brands like Sharp that started to challenge the status quo. This suggests that true disruption comes from technological advancement, not just new business models.
The Internet TV crisis of 2017 is expected to continue into 2018, and there’s even a chance of another "crisis" down the line. Many companies are struggling, and the market is showing signs of fatigue.
In short, the story of Internet TV is one of hype, overreach, and eventual reckoning. The lesson is clear: there are no shortcuts in building a sustainable business. Real innovation takes time, effort, and a solid foundation.
Here are two key takeaways:
1. Traditional TV brands have established strong product advantages and are not easily replaced.
2. True industrial change is driven by revolutionary technologies, not just new business models.
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