Chinese Appliance Market Heating Up
Dec 27, 2002
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Domestic and foreign electric appliance manufacturers are taking various steps to improve market share next year in China’s growing market, which is already valued at 300 billion-yuan (U.S. $36.2 billion).

Sichuan Changhong Electric Co., China's largest television maker, has signaled its intentions to increase sales dramatically by ordering U.S. $4 billion worth of raw materials, including cathode ray tubes, projection television tubes and some other parts, this month - a massive order for a company with sales of U.S. $7.2 billion during the first three quarter of this year.

"According to our analysis, the purchasing power of domestic residents will be further strengthened next year, as the outlook for the nation's macro economy in 2003 is very bright," said Liu Haizhong, a spokesman for Sichuan Changhong.

But some industry officials doubt the company is capable of digest such a big order.

"They must be planning to buy into raw materials at cheaper prices before the arrival of an expected upsurge in the electrical appliance market next year," said an official with the China Household Electrical Appliances Association (CHEAA). "The large-size purchase can help it reduce costs to sell cheaper products."

Chinese electrical appliance producers have been engaged in steep price wars since 1999 when the domestic market for low-end household appliances became saturated.

But with the government pushing for more broadcasting of digital televisions signals, the market for digital TVs is expected to expand significantly over the next few years.

Japan's Sony Corp. is hoping to improve its position in the market by setting up eight new "Pick-up Points" in Shanghai, Beijing, and Guangzhou through an investment of 1.68 million yuan. "Pick-up Points," which Sony uses in many foreign markets, are collection places for appliances in need of repair that allow the company to track problems and hear consumer complaints.

"This kind of service is important for us as we can listen to customers' needs," Seiichi Kawasaki, president of Sony (China) Ltd., said. (Shanghai Daily news, Eastday.com)

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