VCD is a tough market...................................
cei.gov.cn
Trend of China's Home Electrical Appliances Market
Market analysts here predicted that competition on China's home electrical appliances market will become sharper in the coming years, with brand names consolidating their dominant position, high-income families contributing to the main buying power and excess capacity keeping expanding.
But greater potentials can be tapped on the rural market, analysts noted. A survey of China's home electrical appliances market shows that sales of old-fashioned products continued to go down in 1998, as against the steady growth of most home electrical appliances and strong momentum of growth for replacements.
-- Competition will become fiercer.
According to market analysts, competition will become fiercer as producers vie with one another to cut price, upgrade technology and improve service. Powerful firms with a high management level will clinch a bigger market share, while competition will be extended from domestic market to international market.
Competition in strength, strategy, cost, international business and brand will become the mainstream of the home electrical appliances market in the future, analysts predicted.
-- Greater potentials will be found in rural market.
Analysts predicted that in the wake of big reduction in rural electricity charge, the rural demand for home electrical appliances will swell and diversify. Besides TV sets, more home electrical appliances including refrigerators, washing machines, VCD players, microwave ovens and electric rice cookers, will enter into rural families soon.
The rural electricity charge will be lowered by a big margin in the next two years as the state will put more efforts into renovating rural power grids and gradually collect the same electricity charges as in urban areas. According to related departments, an estimated 18 billion yuan of burden will be lifted from the electricity for rural lighting alone.
-- Brand names will play a dominating role on the market.
Fierce competition has made brand names dominate the market over the past few years, with the non-brand name products having a shrinking share. According to a survey about sales of home electrical appliances in large super markets, the top 10 brands of TV, washing machine, refrigerator, air conditioner and VCD player, have acquired more than three-fourths of the market share each, standing at 80.5 percent, 91.3 percent, 91.6 percent, 76 percent and 81.5 percent respectively. Non-brand name products, by contrast, are sticking in the mire, and some even have to fade away from the market.
With advantages in development, marketing and brand, advanced management and sufficient financing methods, big home electrical appliance groups, such as Haier, Kelon, Little Swan, Rongshida and Gree, will maintain a momentum of rapid growth. However, the number of producers is predicted to contract sharply from 100-plus in 1997 to around 10 by 2007.
-- Consumption will vary with income.
High-income families will buy high-grade products such as large-screen, multi-picture and super-bass color TVs, fully-automatic tumbling washing machines, and automatic defrosting, large capacity and environment- friendly refrigerators.
A statistical survey of urban family income shows that high income families own 34 percent of the total income, though they account for 20 percent of the total families. Low income families, making up 20 percent of the total, own 11 percent of the total income. Families with an annual income exceeding 50,000 yuan, are mainly concentrated in economically-developed coastal areas.
-- There will be more surplus production capacity.
There is relatively a glut of industrial products. For instance, the color TV production capacity is 60 percent higher than what is demanded; only 30 percent of air conditioner production capacity and 43.4 percent of washing machine production capacity are being utilized. About 75 percent of the electronics products are in excess supply.
The excess capacity has touched off sustained and sharp price competitions. Due to blind and repeated construction and scattered distribution of color TV, refrigerator, air conditioner and other electric appliance processing projects, the industrial structures of all localities are identical, resulting in great waste.
(03/10/99)
|
