Suning Appliance Chains Group released a report earlier in March that indicated the price of air-conditioners could rise 11 percent in 2005. The next day, Gome Home Appliances, Suning's competitor, announced prices of air-conditioners will continue to decrease as in the past 5 years. The retailer's confidence was reinforced by the 10.81-billion-yuan (U.S. $1.3 billion) contract it signed with domestic and foreign suppliers.
Suning notes prices are likely to rise 20 percent, as China imposed higher energy-saving standards on air-conditioners in 2004. Also, Suning's officials said, prices of major raw materials, such as steel, have increased in recent months.
In 2004, Suning sales revenues reached 22.11 billion yuan ($2.67 billion), while Gome reached 23.88 billion yuan ($2.88 billion). In 2003, there was a gap of 6 billion yuan ($724.6 million) between the two firms. This year, both are expecting sales revenues of 40 billion yuan ($4.83 billion). (China Daily)
to Daily News