China Daily thinks the VCD market in China was 1.5M units in 1996. Where did all the chips go? DVD hits China........................
Digital video disks hit China
Date: 01/19/97
Author: Gao Wei and Wang Chuandong
Page: 8
Electronics industry analysts are paying close attention to the birth of a market for digital video disks (DVD) in China.
"We've been doing research on DVDs since 1995, even though VCDs (video compact discs) were in high demand," said Bai Weimin, an official with the Ministry of Electronics Industry.
The DVD player, a more advanced audio-video product than its VCD cousin, was sold first in Tokyo and New York on November 1, 1996.
Twenty days later, several types of DVD players became available on the Chinese market.
As those machines are exclusively imported from Japan, their disks and instruction booklets are only in Japanese, according to Li Bin, a shop assistant at the Beijing Super-wave Audio-video Garden.
Even so, they have aroused great interest among audiophiles, Li said.
The store has sold five DVD players to date and takes more than a dozen telephone inquiries per day, Li said.
Ministry official Bai nonetheless emphasized that consumers should be prudent when considering the DVD, since its market is unpredictable.
Agreement on specifications and standards of DVDs was reached between electronics conglomerates such as Philips of the Netherlands and Toshiba and Matsushita of Japan in September 1995.
So far, only a handful of Japanese electronics companies such as Matsushita and Pioneer have brought DVD products to the market.
Electronics giants Philips and Sony plan to present their DVD products in the second half of 1997.
At present, only a small number of disks are available on the US and Japanese markets and even fewer on the Chinese market.
Moreover, DVD makers have not reached consensus with content providers such as Hollywood entertainment producers on ensuring a stable and high-quality source of DVD programmes, according to Bai.
Since China's DVD products should comply with international rules, China's electronics industry must wait for definitive settlement of those problems.
And Bai noted that DVDs will face a stiff challenge from VCDs on the Chinese market.
VCDs saw unexpected growth in China since Anhui-based Wanyan Electronics Co, one of the world's earliest VCD producers, turned out a first batch of 20,000 players in 1994.
Sales of VCDs in 1996 are estimated at 1.5 million units, up from 600,000 of 1995.
"VCDs are so hot that demand exceeds supply in some Beijing stores," Bai said.
Experts attribute the success of VCDs to their relatively low price and adequate variety of programmes.
Although foreign producers such as Samsung of South Korea and Sony of Japan have poured into China, especially in 1995, domestic producers took around 70 per cent of the market last year.
Viewing VCDs as a growth area, both domestic and foreign producers are striving to expand production capacity.
Not only are DVD players and disks more expensive than their VCD counterparts, their operating costs are higher: optimal results can only be achieved with high-end audio-video equipment, currently beyond reach of the average Chinese household.
Many experts predict VCDs will continue to hold the lion's share of the audio-video market until at least the turn of the century.
Bai said the ministry is prudently considering the applications of dozens of Chinese enterprises to import VCD production lines, and is carefully observing DVD development on both international and domestic markets. |
