In 2016, Hisense Group's revenue surged from 99 billion yuan in 2015 to 103.3 billion yuan, marking the first time the company had crossed the 100 billion yuan threshold. Initially known primarily for its television and refrigerator appliances, Hisense has now expanded into areas like road traffic intelligence, smart community solutions, and medical image analysis.
Television remains a crucial part of Hisense’s business. According to data from China Yikang, Hisense has held the top spot in China’s flat-panel TV market for 13 consecutive years since 2004. Globally, Hisense ranks third in TV shipments, as per HIS data. Hisense continues to focus on television services moving forward.
The Global Network's correspondent recently gathered the latest sales figures from Hisense in the U.S. market. From January to June 2017, Hisense’s U.S. brand sales volume jumped by 97.7% year-over-year, while sales revenue increased by 100.7%. During the same period, Hisense's brand sales in Europe grew by 16.0% year-over-year, and in Australia, they rose by 47.7%. In South Africa, Hisense became the leading TV brand in the local market. From January to May 2017, Hisense accounted for 19.7% of TV sales and 24.1% of refrigerator sales in South Africa, ranking first in both categories.
From a market perspective, the North American market has been particularly strong. This coincided with Sharp's 2015 decision to seek out Hisense, hoping Sea Trust would manage its brand in North America, using the Sharp name to sell televisions in the region. Starting in 2016, Hisense began incorporating the Sharp brand into some of its products and quickly boosted the efficiency of the Sharp Mexico plant, reforming the supply chain for the U.S. market and significantly reducing lead times. These changes laid the groundwork for Hisense's rapid rise in market share in North America.
However, the situation took a dramatic turn. After Sharp signed its North American brand deal with Hisense in 2016, it was sold to Hon Hai Precision (better known in China as Foxconn) in August of the same year due to severe mismanagement. With Hon Hai taking full control of Sharp, the company regained some momentum and began seeking ways to reclaim its brand rights from Hisense. Reports indicate that after Hon Hai’s acquisition of Sharp in 2016, it filed multiple lawsuits in U.S. and international courts, demanding the return of Sharp’s North American branding rights. Some of these lawsuits were withdrawn shortly after being filed, creating confusion and frustration among observers.
Despite these legal challenges, Hisense has continued to invest heavily in television innovation, which remains a key driver of its success. On the other hand, Hisense's expansion into the North American market, through adjustments in its sales channels and the utilization of the Mexican plant, was still in its early stages when Sharp initiated its legal actions. These lawsuits have created significant uncertainty for Hisense. To understand how Hisense is responding, the Global Network spoke exclusively with Zhu Xi, Deputy General Manager of Qingdao Hisense International Marketing Co., Ltd.
Global Network: Following Hisense's acquisition of Sharp's North American market rights in 2015, how does Hisense view the use of the Sharp brand?
Zhu Xi: First, we recognize that Sharp is an excellent brand with a strong reputation among consumers. After taking over the Sharp brand, we leveraged Hisense's extensive resources, sending our best teams to revive the Sharp Mexico factory and restore consumer trust in the brand. In terms of R&D, Sharp's previous efforts had ceased, so we infused Hisense's advanced ULED picture quality enhancement technology.
After assuming control of the Sharp brand, Hisense invested considerable resources to ensure its success in North America. Thanks to these efforts, Sharp's performance and sales in the market have significantly improved. We remain optimistic about the future prospects of the Sharp brand under Hisense's management. Hisense has introduced high-quality Sharp-branded products that have been well-received by local mainstream channels, third-party professional evaluation agencies, and consumers in the U.S.
Global Network: Could you provide some specific figures?
Zhu Xi: In 2017, the total TV sales of the Sharp brand in the U.S. market increased by 47% compared to the same period last year. More importantly, the growth rate of 4K TVs—our high-definition models—was an impressive 360%. Hisense manages the Sharp brand as a premium offering, and we estimate that Sharp's 4K TVs will capture around 7.8% of the U.S. market by the end of the year. This reflects the success of our efforts and aligns with our expectations. Over the past six months, progress has been very encouraging.
Global Network: We noticed that Sharp filed lawsuits against Hisense last year in places like New York, reportedly aiming to reclaim the Sharp brand rights.
Zhu Xi: Let me explain the context. When Hisense and Sharp discussed managing the brand in North America, Sharp’s team valued our technological expertise and operational capabilities. It was Sharp's initiative to include its North American brand in the discussions, hoping for a potential merger or acquisition.
Following the agreement, Sharp expressed satisfaction with Hisense’s operational approach, both in terms of factory management and brand promotion. Both parties were pleased with the collaboration.
However, after Foxconn acquired Sharp, a new president was appointed who publicly stated that Sharp’s North American brand had not been properly communicated with Hisense. This disregard for the original agreement demonstrates a lack of respect and commitment to contractual obligations.
Global Network: Given this, is it reasonable for Hisense to continue with the contract?
Zhu Xi: Absolutely. We believe that honoring contracts is fundamental to a healthy market economy. Hisense must fully adhere to the trademark commitments made at the time and continue producing and selling Sharp-branded TVs in North America. We are committed to fulfilling the contract and advancing the Sharp brand and its products.
Global Network: There have been reports that Sharp accused Hisense of infringing on its intellectual property rights this year, even though Japanese media referred to these claims as "tricks." How does Hisense perceive these allegations?
Zhu Xi: While we cannot comment on legal matters directly, it’s important to note that Hisense has never acted improperly. We rely on legitimate means to protect our rights. With nearly 50 years of history and numerous patents in television technology, Hisense will continue to promote the Sharp brand and fulfill our contractual obligations.
Global Network: Now that Hon Hai plans to sell high-end Sharp TVs in the U.S., how does this impact your strategy?
Zhu Xi: Let me outline Hisense’s strategy. We are dedicated to elevating the Hisense brand to a global level. Our core strategy focuses on high-quality mid-priced products. By leveraging technological advancements, product innovation, and expanding our distribution channels, we aim to increase the market share of our mid-to-high-end products in various regions. Our overseas strategy over the past decade has proven successful, with most regional channels embracing our approach.
Currently, Hisense enjoys strong partnerships with leading channels in the U.S., Europe, Asia-Pacific, and the Middle East. We’ve entered major retailers like Best Buy and Walmart in the U.S. Our market share is growing rapidly, surpassing Sharp’s. In 2016, Hisense led the market in South Africa and Australia, and within a few months. In Europe, Hisense also forged a strategic alliance with Germany’s second-largest retail chain to promote its high-end products.
Global Network: What is the situation in Japan?
Zhu Xi: In Japan, Hisense holds the highest share of non-local brands. Hisense Japan was established at the end of 2010, launching TV products in March 2011. Refrigerators and washing machines entered the Japanese market in 2014, and air conditioners will follow in 2018.
Today, Hisense products are available in five major supermarkets and discount stores in Japan. Hisense Japan purchased real estate in March 2015 and December 2016 to serve as the base for after-sales services. In 2017, Hisense Japan is expected to generate sales revenue of 10 billion yen. Third-party data from GFK indicates that Hisense Japan’s sales volume could reach 4.6%.
Looking ahead, Hisense’s global TV shipments ranked third in 2016, trailing only Samsung and LG. Television remains a critical business segment for Hisense. While Hon Hai is pursuing a new strategy to sell high-end TVs in the U.S., Hisense’s strategy has consistently been clear and effective. We’ve grown in a highly competitive market environment, and Hon Hai’s moves won’t deter us from our commitment to promoting high-tech products.
Global Network: Why is Hisense so confident?
Zhu Xi: Because we have established seven overseas R&D centers, enabling us to develop targeted solutions tailored to local consumer needs. Whether it’s quality, performance, or design, we are ready to meet any challenge head-on.
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