In 2016, Hisense Group's revenue surged from 99 billion yuan in 2015 to 103.3 billion yuan, marking the first time it had crossed the 100 billion yuan threshold. Originally known primarily for televisions and refrigerators, Hisense is now expanding into areas like road traffic intelligence, smart community solutions, and medical image analysis. Despite this diversification, television remains a key focus for the company. According to data from China Yikang, Hisense has held the top spot in China's flat-panel TV market for 13 consecutive years starting from 2004. Globally, Hisense ranks third in TV shipments based on HIS data. The company also plans to continue investing in television services moving forward.
The Global Network's correspondent recently obtained updated figures regarding Hisense's performance in the U.S. market. From January to June 2017, Hisense's brand sales volume in the U.S. jumped by 97.7% year-on-year, with sales increasing by 100.7% during the same period. In Europe, Hisense’s brand sales increased by 16.0% year-on-year, while in Australia, sales rose by 47.7%. In South Africa, Hisense has established itself as the leading TV brand locally. From January to May 2017, Hisense accounted for 19.7% of TV sales and 24.1% of refrigerator sales, topping both categories.
From a market perspective, the North American market has been particularly robust. This aligns with Sharp's decision in 2015 to seek Hisense's help in managing its brand in North America, allowing Hisense to use the Sharp brand to sell televisions in the region. Since 2016, Hisense has started incorporating the Sharp brand into its product lineup, leveraging the acquisition of Sharp’s Mexican plant to boost production efficiency and streamline supply cycles in the U.S. market. These changes helped Hisense significantly increase its market share in North America.
However, the situation changed dramatically when Sharp, after being sold to Hon Hai Precision (better known as Foxconn) in August 2016 due to poor management, began seeking ways to reclaim its North American brand rights from Hisense. Reports indicate that following Hon Hai's acquisition of Sharp in 2016, several lawsuits were filed in U.S. courts and elsewhere, demanding the return of Sharp's branding rights in North America. Some of these legal actions were withdrawn shortly after filing, which left many observers with a negative impression of Hon Hai's approach.
Despite these challenges, Hisense continues to prioritize television development while also adjusting its strategies in the North American market through the Mexican plant. The recent legal actions initiated by Sharp and Hon Hai have created uncertainty. In response, I spoke with Zhu Xi, Deputy General Manager of Qingdao Hisense International Marketing Co., Ltd., to understand how Hisense is navigating these complexities.
Global Network: How does Hisense feel about using the Sharp brand in the North American market after acquiring its rights in 2015?
Zhu Xi: We view Sharp as an excellent brand with a strong reputation among consumers. Upon taking over the Sharp brand, we leveraged Hisense's extensive resources and expertise to revive the Sharp Mexico factory and restore consumer trust in the brand. From a research and development standpoint, Sharp’s R&D had ceased, so we integrated Hisense’s ULED technology to enhance picture quality.
We’ve worked hard to maintain Sharp’s brand presence in North America. As a result, Sharp’s market performance and sales have improved significantly. We remain optimistic about the future of the Sharp brand under Hisense’s stewardship. High-quality Sharp-branded products have gained recognition from local retailers and consumers alike.
Global Network: Could you provide some specific numbers?
Zhu Xi: In 2017, Sharp brand TV sales in the U.S. market increased by 47% compared to the previous year. Importantly, the growth in 4K TV sales—our high-definition models—rose by an impressive 360%. Hisense manages the Sharp brand as a premium offering, and by year-end, Sharp’s 4K TV market share in the U.S. is projected to reach 7.8%. This represents significant progress and reflects the success of our efforts.
Global Network: We noticed that Sharp filed lawsuits against Hisense in New York and other locations last year. Media reports suggest that Sharp’s goal was to reclaim its North American brand rights.
Zhu Xi: Let me clarify the context. When Hisense and Sharp discussed managing the brand in North America, Sharp expressed interest in exploring potential mergers or acquisitions. After reaching an agreement, both parties were satisfied with Hisense’s operational capabilities.
However, after Foxconn acquired Sharp, a new president was appointed who publicly stated that Sharp’s North American brand had not been discussed with Hisense. This lack of respect for the original agreement is disappointing and disrespectful to Hisense.
Global Network: Is it reasonable for Hisense to continue honoring the contract under these circumstances?
Zhu Xi: Absolutely. Contractual obligations are fundamental to any market economy. Hisense will fully adhere to the commitments made at the time and continue producing and selling Sharp-branded TVs in North America. We are committed to fulfilling our contractual responsibilities and promoting the Sharp brand and products effectively.
Global Network: There have been reports that Sharp claims Hisense has infringed on its intellectual property rights, seeking compensation. Japanese media described Sharp’s actions as “trickery.†How does Hisense view these allegations?
Zhu Xi: While we cannot comment directly on legal matters, Hisense has never sought to cause trouble. Instead, we rely on legitimate means to protect our rights. With nearly 50 years of experience, Hisense holds numerous patents in television technology. We remain dedicated to advancing the Sharp brand and products while adhering to our agreements.
Global Network: Hon Hai now plans to sell high-end Sharp TVs in the U.S. How might this impact your strategy?
Zhu Xi: Let me outline Hisense’s strategy. We are committed to making the Hisense brand a global leader, focusing on high-quality mid-priced products. By enhancing technology, improving product offerings, and expanding distribution channels, we aim to increase the market share of mid-to-high-end products across various regions. Evidence shows that our strategy is working effectively. In 2016, Hisense TVs led the market in South Africa and Australia, and we’ve formed strategic partnerships in Europe to promote our premium products.
Global Network: What about Japan?
Zhu Xi: In Japan, Hisense ranks second in terms of non-local brand market share. Hisense Japan was established in late 2010, launching TVs in 2011. Refrigerators and washing machines entered the market in 2014, and air conditioners will follow in 2018. Hisense products are now available in Japan’s top supermarkets and discount stores, with dedicated real estate purchases for after-sales services. For 2017, Hisense expects sales revenue of 10 billion yen, achieving a 4.6% market share according to GFK data.
Looking ahead, Hisense ranked third globally in TV shipments in 2016, trailing only Samsung and LG. Despite Hon Hai’s recent moves to sell high-end Sharp TVs in the U.S., Hisense remains confident in its strategy of promoting advanced technology. We have established seven overseas R&D centers to cater to local market demands, ensuring our products meet the highest standards in quality, performance, and design.
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