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TV Market, New Brands At The Good Guys, Prices Set To Rise

The TV supply market appears to be undergoing a major change, discounting is out, and The Good Guys are seriously ramping up new brands.

Shortly two new TV brands are set to be ranged at The Good Guys, with both the Sharp and the former Harvey Norman Toshiba brands set to be exclusively sold at the JB Hi Fi owned retailer.

Sharp TV’s which are distributed by Sydney based Tempo are set to be ranged again in Australia at The Good Guys after a decision was taken by now departed Sharp management, to pull the brand out of Australian stores in May 2015, despite being a popular brand.

The brand is seen as a replacement for the Japanese Panasonic TV range which was discontinued last year.

The Good Guys have also had a lot of success with the premium European Loewe TV brand. Originally sold in limited stores the range is set to be expanded into several stores TGG stores across Australia when COVID retail restrictions are lifted.

Several major retailers including Harvey Norman and JB Hi Fi as well as the likes of Bing Lee and Queensland based Betta Home Living have seen a big lift in demand for TV’s during lockdowns with consumers having no problems paying a premium price for a new TV.

Research shows that the appetite for big screens has continued to increase during the pandemic as people continue to spend more time at home, and some consumers move to spend money on improving their home lifestyle claims TrendForce.

Consequently, during the last half of 2020 TV shipments to Australia increased 14.5 percent according to Federal Government sources that track shipments.

Currently manufacturers are struggling to meet demand as glass prices rise and components are in short supply.

Suppliers have told ChannelNews that while they are “absorbing price rises now but prices will rise in the New Year” this they claim is due to the increased cost of a 40-foot container a falling dollar and price rises being passed on from manufacturers.
The combination of high demand and parts shortages has meant significant price hikes, with increases of 10 to 20 percent on many models tipped in the New Year.

DSCC Research claimed back in May 2021 that they anticipated that price increases would decelerate in Q2, but instead prices have accelerating compared to Q1. Panel prices increased by 27% in Q4 2020 compared to Q3 and slowed down to 14.5% in Q1 2021 compared to Q4, but our current estimate is that average LCD TV panel prices in Q3 2021 will increase by another 17%.

This is based on wholesale prices of goods that will not be shipped to Australia until Q1 2022.

Even brands such as Samsung the market leader in the Tv market, have struggled to get supply said one Harvey Norman franchisee.

And while bigger screens are where the bigger margins are, it’s not just sets at the top end of the market that are seeing increases. Even prices for entry-level TVs are rising. A 32-inch TV at Harvey Norman rose 13 percent recently while a 42 TV at Bing Lee rose 12%.

But it’s not all due to chip and component shortages.

“The cost of glass has gone up, yes,” says Chris Larson, senior vice president, at TCL, “And so have shipping containers.”

In August, container shipping rates from China and East Asia topped $13,500 for a 40-foot container shipped to Australia.

Just a year ago, container prices were just $4,000, according to Freightos, a tracking company.

Such prices have led to additional shipping imbalances with container companies switching to the more profitable Pacific routes, and in the process, disrupting other supply chains and wreaking havoc at ports already overburdened with ships sitting offshore waiting to be unloaded. And those conditions are unlikely to change before the holiday shopping season.

“We currently expect the market situation only to ease in the first quarter of 2022 at the earliest,” said Rolf Habben Jansen, the CEO of Hapag-Lloyd, a global shipping container company, in a recent report.

TCL who have just introduced new Google TV 5-Series and 6-Series TVs, is hoping the worst is past.

The TCL 5-Series will include 4K models up to 75 inches and the 4K 6-Series features mini-LED 55- and 65-inch sets.

TCL’s Larson expects continued strong demand, particularly among younger viewers who are still missing live concerts and events.

And with the new Zoom-centric working and social environment, TCL has even recently introduced an $80 webcam for its Google TV models. But he also believes the shortages will level off in the new year.

“We’re betting we have hit the peak,” in terms of price increases, says Larson.

LG executives believe the chip shortages are easing, and supply chains are getting back to normal, and he notes that TV manufacturers haven’t experienced the severe disruptions witnessed in the automotive industry which is seen as beneficial to Australian TV retailers who are currently ramping up supply.

Some retailers have taken to stocking cheap brands such as Blaupunkt which are sold at bottom end online retail sites such as Cheap As Chips, Kogan and Catch who often discount out the brand at the expense of retailers such as JB Hi Fi who are stocking the brand “to fill a shortage hole”.

“In some cases, [prices] are merely holding steady rather than going down,” notes Ross Rubin, principal analyst at Reticle Research. “This is due to the same raw materials and component shortages that we’ve seen constrain manufacturing in other categories.”

As for whether the next Black Friday will be anything like the Black Fridays of the past, TrendForce predicts that with the increased prices, TV deals will be difficult to come by.

“We’ll likely still see Black Friday promotions as the supply constraints appear to be easing and, beyond that, even the reduced inventory needs to be cleared out to make room for new models in the spring,” counters Rubin. “But there may be even fewer doorbusters to go around.”

 

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