March 03rd, 2017

Hisense gaining ground in US through Netflix

Qingdao, China-based Hisense (600060.CH), the 3rd largest TV manufacturer worldwide (actually tied with TCL (000100.CH) for 3rd place) has 2.6 active TV subscribers in the US,  which is expected to grow to 6m by 2018, which will cover ~20m US viewers.  While Hisense is the top selling brand in China, and has 23.4m subscribers in China, most Chinese brands have little sponsorship in the US and their subscriber base (made up of those smart TV buyers who sign up for subscription services offered by the brand) in the US is small.  Hisense had the forethought to align with Netflix (NFLX), who has more than 49m subscribers in the US and over 93m worldwide, although its direct services remain unavailable in China, where it sells individual content only.

The cooperation between Hisense and Netflix should continue to open both the US to Hisense and China to Netflix, especially given Netflix increasing proportion of successful original programming (House of Cards, Orange is the New Black) and wide range of content streaming deals, and the Chinese focus on ‘smart TVs’, which allow a direct streaming connection to content.  When looking at the Best Buy on-line ‘smart TV” offerings, one notes that Hisense is the only Chinese TV brand offered within the first 169 smart TVs (out of 183) and appears on the first page, along with LG (066570.KS)), Sharp (6753.JP), Samsung and Insignia (Best Buy private label)