Why are Hisense TVs so cheap? How can the brand make profits by selling electronics at such low prices? Here are a few reasons why Hisense TVs are cheap.
1. Hisense TVs are made in China
Hisense TVs are cheap because they’re made in China, where labor costs are lower than in the US.
It all began in 2002 when Hisense and Ligent Photonics, Inc. (recently changed its name to Hisense Broadband, Inc.) established a joint venture.
Under the joint venture, Hisense TVs are designed in St. Charles, Illinois and made in China. The TVs are then sold in North America, Europe, and the Middle East.
An engineer in China earns roughly enough monthly to buy a 60” TV, costing no more than $800.
Compare that to the United States, where an engineer can get an annual salary of around $91,000. It becomes clear that outsourcing production to China really cuts costs down.
Because of China’s low labor costs, Hisense can produce TVs more cheaply. Hisense couldn’t sell their TVs at these prices if made in America.
2. Televisions have become cheaper in the past decades
Decades ago, people saw televisions as big pieces of furniture, not as gadgets. They were huge, heavy, and passed down from generation to generation. But TVs aren’t like that anymore.
Like so many other gadgets, TVs have gotten much better, and much less expensive. In fact, the drop in television prices is surprising.
This is a chart of the price changes in US consumer goods and services made by the American Enterprise Institute:
Prices of key items, like college tuition, have risen 180 percent since 2000. But TV prices dropped a huge 97 percent.
As TV prices drop industry-wide, Hisense must also lower its prices. That’s the current market trend. Almost everyone can buy televisions now.
3. Fierce competition in the television industry
TV prices have dropped mainly due to one key factor in the market: strong competition.
While a few big companies control the smartphone market, low display costs let many TV makers enter.
These TV makers just need to buy the display, make a case, and add streaming software.
James Willcox from Consumer Reports noted that new brands like Hisense have grabbed market share from older ones.
New brands, such as Hisense, attract customers in America by being cheaper. This forces other TV brands to lower their prices.
4. Post-purchase monetization
Hisense is also able to sell its TVs at ridiculously cheap prices because of post-purchase monetization. Hisense watches users and profits from the data they collect.
I recently decided to treat myself to a 50” 4K TV and settled for a Hisense TV. Once I got the TV, I unboxed it and began the setup. To activate the adaptive sound and image functions, I had to let Hisense collect my data. They also sent ads to all devices on my IP.
I was okay with them collecting my data, so I agreed. But, it made me see that some 4K TVs have ‘hidden conditions’ for features.
Smart TVs, like social networks and search engines, monitor us in exchange for services. Then, they can sell that information to advertisers.
This means Hisense can sell their TVs almost at cost and still earn by selling data long-term. Besides selling your data to advertisers, Hisense TVs also display ads in the user interface.
If you buy the Hisense Roku TV, for example, you’ll see recommended TV shows on the home screen’s right side. Those are paid ads.
Simply put, Hisense sells TVs cheaply because they profit by selling your data and showing ads.
5. Hisense operates in the mid-range market
First, it’s important to note that not all Hisense TVs are cheap.
Hisense OLED TVs, for example, cost more than £1,000 in the UK, which isn’t cheap by any means. But Hisense OLED TVs are cheaper than similar models from other brands.
You see major price differences in the mid-range sets. The chart below that shows the average prices of Hisense TVs versus other brands for models over 65 inches.
|TV Brand||Average TV Price|
Established brands often price higher than Hisense TVs. I think this has to do with Hisense’s strategy of targeting middle-class consumers.
Rather than compete with brands like Samsung, Sony, and LG, Hisense targets the mid-range market with less fierce competition.
By focusing on affordable pricing, Hisense differentiates its products more by cost than by features. This means Hisense TVs are generally cheaper.
Very few Hisense TVs, even the 65-inch models, top $1,200. You can expect to pay between $480 and $600 for the models people most often buy (43- to 50-inch TVs).