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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
There was a time when nearly every hotel room seemed to have a TV with a Sony, Panasonic, Samsung or LG logo on the bottom of the screen. Affordable Chinese models have long been chipping away at the dominance of such Japanese and South Korean brands. Now, however, China’s ascent is about more than just price.
Take what’s happening in Japan. Local brands are increasingly being displaced by Chinese manufacturers on their home turf. Chinese makers accounted for more than half of all flat-screen TVs sold in Japan last year for the first time on record, according to research firm BCN.
In the past, Chinese companies have disrupted industries primarily through cheapness. That meant even as they gained market share, a clear distinction remained between premium and budget segments. The high-end market, which typically has fatter margins, still provided a lucrative buffer for incumbent players to sustain their business as Chinese makers focused on affordability. That may now be changing.
TV makers aiming to capture the premium segment typically differentiate themselves in two ways: advancements in display technology and the integration of artificial intelligence features. Chinese electronics groups including Hisense, TCL and Xiaomi have been quick to integrate the latest AI features into their TVs to enhance picture clarity, contrast and colour based on real-time scene detection, as well as suggest content based on user preferences. They also offer seamless integration with global smart TV platforms and streaming services.
Premium TVs using Oled technology, which enables ultra-slim display panels and vivid colours, were once the exclusive domain of Japanese and South Korean makers. These TVs offered higher profit margins compared with traditional LCD TVs, offsetting weakness in the lower-end market. Yet over the past five years, Chinese makers led by Xiaomi, TCL and Hisense have been aggressively expanding their offerings here, as their investments in display innovation begin to pay off.
Shares of Xiaomi have more than doubled in the past six months, while TCL Electronics stock has nearly tripled in the past year. Even after those gains, TCL trades at just below 12 times forward earnings — a steep discount to Japanese peers. That would be justifiable if Chinese TV makers weren’t moving upmarket.
Underestimating the ingenuity of Chinese competitors has proven unwise: look no further than DeepSeek’s dramatic arrival in the AI arms race. Investors in Japanese electronics groups used to regarding China as no more than a supporting actor should be on guard.
