Hisense goes overseas, but the story of upgrading to high-end products hasn't been clearly communicated?

From “Hisense TV, China’s No. 1,” “China’s No. 1, the world’s second,” to “Hisense 100-inch, the world’s No. 1,” the changes in Hisense’s advertising taglines at major global top-tier sports events fully expose its ambitions for globalization and high-end positioning.

The massive investment in sports marketing has indeed given Hisense greater brand awareness, but it has failed to bring about a significant improvement in profitability. In particular, its gross margin margins in both domestic and overseas markets are seriously inverted, and it has not achieved the transformation from “brand volume” to “profits.”

Perhaps this may be the biggest obstacle on Hisense’s path toward globalization and high-end development.

Gross margin “inversion” between domestic and overseas markets

Hisense’s globalization seems to be trapped in a paradox of “high investment, low gross margin.” This paradox is clearly and painfully reflected in the financial report data of Hisense Visual and Hisense Home Appliances.

Hisense Visual’s domestic gross margin in 2023 was 23.47%, while overseas was only 13.21%—a difference of 10.26 percentage points; in 2024, domestic was 22.58% and overseas fell to 10.91%, widening the gap to 11.67 percentage points; in 2025, domestic gross margin rebounded to 23.58%, while overseas was only 12.03%, fixing the gap at 11.55 percentage points.

This comparison is even more pronounced for Hisense Home Appliances. In 2023, domestic gross margin was 31.91%, overseas 10.20%, a difference of 21.71 percentage points; in 2024, domestic 30.73% and overseas 11.38%, a difference of 19.35 percentage points; in 2025, domestic 29.85% and overseas 12.59%, still a difference of 17.26 percentage points.

During this period, the importance of the companies’ overseas businesses continued to rise. In 2023, Hisense Visual’s overseas revenue had already exceeded its domestic revenue; by 2025, the revenue share had reached 50.68%, supporting half of its revenue. Meanwhile, Hisense Home Appliances’ overseas revenue share also increased from 32.62% to 43.13%.

Overseas revenue has continued to grow, but profitability has not increased in step—this is the most obvious contradiction in Hisense’s globalization.

When compared with major peers, Hisense’s “spread” between domestic and overseas profits is almost unique in the industry. In 2025, the difference in gross margin between domestic and overseas for Haier Smart Home was only 4.23 percentage points (domestic 28.81%, overseas 24.58%); TCL Electronics’ difference was 6.7 percentage points (domestic 21.7%, overseas 15.1%); and Midea Group has maintained overseas business gross margin higher than domestic for many years—its values in 2025 were 26.60% and 26.24%, respectively.

From the above data comparison, it is not hard to see that for Hisense, the issue with globalization is not “hard to go global,” but “hard to make profits.” This stands in sharp contrast to Hisense’s continuous increase in sports marketing and pursuit of high-end positioning.

In recent years, Hisense has repeatedly bet on top-tier sports IP, consecutively sponsoring three editions of the World Cup and the UEFA European Championship, and adding cooperation such as the FIFA Club World Cup and the Australian Open, with enormous investment. The billboards at sports venues have indeed given Hisense greater “voice volume,” and over the past decade, its global brand awareness rose from 37% to 59%, while its overseas market share has continued to increase.

However, with such massive investment, why has that “voice volume” not translated into profit performance in its financial statements?

Overseas high-end development hits obstacles

Hisense’s relatively low overseas gross margin and its stalled high-end development are not caused by a single factor, but rather the result of multiple shortcomings stacking up.

Product structure is the main reason for the inversion of Hisense’s gross margin between domestic and overseas. In fact, Hisense’s products have already completed its high-end layout. In 2025, Hisense Visual’s 75-inch+ large-screen share reached 39%, Mini LED accounted for 23%, and the global market share of laser TVs is as high as 70%. These high-gross-margin products continue to pull domestic gross margin upward. For Hisense Home Appliances, the share of mid-to-high-end products such as built-in refrigerators, vacuum magnetic fresh-keeping refrigerators, and heat pump washer-dryer systems has increased significantly, which is enough to support high domestic gross margin levels.

But in overseas markets, Hisense still follows a “trading volume for price” approach, mainly relying on mid-to-low-end cost-effective models. According to relevant research reports, Hisense’s overseas product pricing is generally lower than that of international brands such as Samsung and LG; the proportion of high-end products is insufficient, and high-end brands such as Gorenje and ASKO have also failed to form volume expansion.

Differences in channel model directly determine the ability to retain profits. In the domestic market, Hisense deeply controls the entire supply chain and adopts a “direct operation + core distributors + e-commerce” model, building its own warehousing, logistics, and after-sales service systems, resulting in a high rate of channel profit retention.

In overseas markets, Hisense’s approach is mainly “buyout-style exports,” primarily relying on local agents and chain retailers/supermarkets, such as Media Markt in Europe and Best Buy in North America. Under this model, Hisense earns only the difference between the ex-factory price and production cost; profits from channel promotion, after-sales service, warehousing, and other links are taken by local agents, which greatly compresses gross margins.

Comparing with Haier, the difference is obvious at a glance. Haier achieved “localized R&D, production, and sales” through the acquisition of GEA and Candy, has a higher share of overseas self-owned channels, and therefore forms a stronger level of profitability.

Top-tier sports event marketing has solved the problem of “letting overseas markets know Hisense,” but it has not quickly created high-end recognition. In overseas markets, Hisense’s brand recognition still remains at the “high value for money” level. Compared with Samsung, LG, and Sony, it lacks high-end mindshare support.

How “voice volume” turns into “profits”

Hisense’s insufficient overseas profitability is the result of an imbalance in the pacing of its globalization strategy. In the early stage, it overly pursued scale expansion and brand exposure while ignoring coordinated upgrades of products, channels, and branding, which directly caused sports marketing investments to fail to translate into profit returns.

Of course, Hisense is not without cards to play. It has core advantages such as technology, factories, and multi-brand capabilities, and since its overseas gross margin base is low, there is broad room for improvement.

The key to breaking through does not lie in continuing to increase marketing investment, but in precisely addressing shortcomings and realizing the transformation of “voice volume” into “profits.”

To break out of the domestic “price-for-volume” grind, the first priority is to replicate the advantages of domestic high-end products in overseas markets. Focus on core high-end markets in Europe and the U.S., deeply bind large-screen laser TVs and high-end home appliance sets with sports event scenarios to enhance product premiumization. At the same time, accelerate overseas volume expansion of high-end brands such as Gorenje and ASKO, bringing them in line with the high-end levels of major peer companies.

Hisense has certain technological advantages. The key is how to turn core technologies such as RGB-Mini LED and laser display into support for overseas high-end development, conveying the recognition of “Hisense $1 high-end technology” to overseas consumers.

Channel transformation is the key to improving gross margin. Hisense needs to step out of its current comfort zone in overseas channel models, gradually reduce the share of buyout-style exports, and expand the layout of overseas self-owned channels and joint ventures—especially in core European and U.S. markets—directly connecting with consumers and getting out of dependence on agents.

In the current international environment, Hisense must also continue to deepen its overseas factory layout, expand production capacity in overseas markets, and achieve “local manufacturing, local sales,” effectively offsetting tariffs and logistics costs. By optimizing the global supply chain, improving overseas manufacturing efficiency, and lowering unit production costs, it can create more room for gross margin improvement.

Hisense’s severe inversion of gross margin between domestic and overseas markets is a hurdle that must be crossed in its globalization development. But breaking through overseas high-end development cannot rely solely on pouring money into expanding influence; instead, it must “targeted efforts,” turning voice volume into sales of high-end products and the company’s profits—so that it can truly make the leap from “a China home appliance leader” to “a global high-end brand.”