DVD players sold in China for $240................
chinadaily.net
Domestic appliance makers gear up for competition
CHINESE home appliance makers have established a dominant presence in the domestic market, according to a
survey report released yesterday.
These enterprises hold at least 70 per cent of the market in colour televisions, washing machines, refrigerators,
air-conditioners, video compact disc (VCD) players, electric cookers, microwave ovens and freezers, according to a
survey conducted by the Chinese Society of Statistics.
However, domestic companies are facing mounting pressure from overseas competitors, warned Zhang Zehou, the
society's secretary-general.
Domestic companies' advantage of low product prices has little room for manoeuvre after multiple price wars in recent
years, he said at a press conference.
Meanwhile, foreign appliance makers, backed by their strong financial and technological clout, are eyeing a larger slice
of the market. Many are setting up more manufacturing bases in China, Zhang said.
The survey covered 600 department stores in 121 cities in China. Home appliance sales in these stores represented 39
per cent of the country's total last year.
The survey found foreign manufacturers have gained 96.5 per cent of the video cassette player market and 53 per cent
of the hi-fi equipment market.
They are likely to pose a stronger challenge this year to Chinese refrigerator manufacturers, Zhang predicted.
Supported by dazzling TV advertisements, domestic and foreign appliance producers have launched cut-throat
competition for a solid position in the market.
Their efforts to expand production to critical mass level and diversification of their business into a variety of products in
the appliances sector have resulted in serious oversupply. This, in turn, has intensified competition.
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. The battle in the refrigerator market will be fuelled by foreign firms'
participation.
While the fight for a bigger share of traditional products continues, the rivalry over digital video disc (DVD) players, the
latest generation of video appliances, has already started in earnest.
Some foreign firms are now preparing to present DVD players priced at around 2,000 yuan (US$240), slightly more
expensive than a VCD player, according to Zhang.
"DVDs are likely to enjoy unprecedented development in 1998, adversely affecting the booming VCD market," he said.
Zhang said urban families still represent the major purchasing power for home appliances. However, rural areas are
emerging as a promising new market, he reminded producers.
The urban market's potential for expansion is limited, as home appliance coverage in urban areas is already very high,
he said.
Date: 01/07/98
Author: Xu Binglan
Copyrightc by China Daily |
