Home Appliance Market Competition Intensifies In China
01/07/98
Xinhua English Newswire
(Copyright 1998)
Domestic home appliance companies are feeling mounting pressure from overseas counterparts in market competition, today's China Daily quoted a recent survey report as saying.
Chinese makers hold at least 70 percent of the market in color televisions, washing machines, refrigerators, air-conditioners, video compact disc (VCD) players, electric cookers, microwave ovens and freezers, said the survey conducted by the Chinese Society of Statistics.
However, their advantage of low product prices has little room for manoeuvre after multiple price wars in recent years, warned Zhang Zehou, the society's secretary-general.
Meanwhile, foreign appliance manufacturers, backed by their strong financial and technological clout, are eyeing a larger slice of the Chinese market, and many of them are opening production bases in the country, Zhang said.
The survey, which covered 600 department stores in 121 cities in China, showed that home appliance sales in those stores accounted for 39 percent of the country's total in 1997.
It also showed that foreign companies had seized 96.5 percent of the video cassette player market and 53 percent of the hi-fi equipment market. They are likely to pose a stronger challenge this year to Chinese refrigerator producers, Zhang predicted.
Domestic and foreign appliance manufacturers are launching cut-throat competition for a solid position in the market, supported by dazzling TV advertisements. Their common efforts to expand production capacity have led to serious oversupply. And this, in turn, has intensified competition.
Refrigerators and VCD players may become the two major areas of market competition in 1998.
The rivalry over digital video disc ( DVD ) players, the latest generation of video appliances, has already started in earnest, while the fight for a bigger share of traditional products continues.
Some foreign firms are now preparing to present DVD players priced at around 2,000 yuan, slightly more expensive than a VCD player. "DVDs are likely to enjoy unprecedented development in 1998, adversely affecting the booming VCD market," Zhang said.
Urban families remain the major purchasing power for home appliances. But rural areas are emerging as a potential market, Zhang reminded producers. |
