Price war forecast for VCDs and fridges in China ...
01/07/98
Agence France-Presse
(Copyright 1998)
Price war forecast for VCDs and fridges in China
BEIJING, Jan 7 (AFP) - Chinese manufacturers will find themselves locked in a price war with foreign competitors for sales of refridgerators and video compact discs (VCDs) players, the Chinese Society of Statistics said in a study.
There will also be strong competition for sales of digital video disc (DVDs) players, the latest in hi-tech equipment which foreign makers are due to put on sale for around 2,000 yuan (240 dollars), slightly more than a VCD player, the society's secretary general Zhang Zehou said, according to a report in the China Daily on Wednesday.
The study was carried out in 600 shops in 121 cities across China which accounted for 39 percent of total sales of home appliances last year.
It showed that last year Chinese manufacturers won 70 percent of sales of televisions, washing machines, refrigerators, air-conditioners, VCD players, electric cookers, freezers and micro-wave ovens.
"However domestic companies are facing mounting pressure from overseas competitors," Zhang said.
Domestic goods have sharply fallen in price in recent years due to price wars, and Chinese companies have little room for maneouvre.
Foreign companies which already account for 96.5 percent of video recorder sales and 53 percent of the hi-fi equipment market, are already eating into refrigerator sales with aggressive television marketing campaigns and attractive prices.
And several foreign firms have set up factories in China.
Zhang said refrigerators and VCD players, the latter a new craze among China's urban families, may become the two main areas of market competition in 1998.
A VCD player costs between 600 and 1,300 yuan (72 to 156 dollars) and a film can be bought on the black market for around 15 yuan (1.8 dollars), half the price of cinema ticket which costs around 30 yuan.
"DVDs are likely to enjoy unprecedented development in 1998, adversely affecting the booming VCD market," Zhang said.
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