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Looking for Changes in TV World
Technological upgrading and modernized management are two catchphrases said by the leaders of China's color television industry last year. However, the actual situation seems not to live up to what they say.
"We need to make a big effort to speed up the reform of the current TV market," said Liang Yugu, assistant professor with the business school at Renmin University of China.
With China's prospective entry into the World Trade Organization (WTO) this year, the nation must get a firm foothold in the domestic market, Liang stressed.
Industry experts and analysts were shocked when China's colour TV industry encountered setbacks last year.
Latest figures from the National Bureau of Statistics show China produced 27.71 million colour televisions in the first 10 months of last year, a drop of 106 per cent on the same period of 1999.
Meanwhile, sales dropped 5 per cent to 29.02 million units.
But foreign brands have increased their market share here from 10 per cent in 1999 to 30 per cent last year.
"We need to do something to sustain the development of our TV industry," said Zhong Pengrong, an economist at Beijing Shiye Consultancy Center.
Price wars are one of the main reasons for the decline in sales and production, he said.
Analysts also fear price wars will penetrate into other electrical appliance sectors such as air-conditioners and refrigerators.
It is expected that a new nationwide TV price war is approaching with the traditional Chinese Spring Festival.
This is unavoidable because of oversupply, according to Tang Yeguo, general manager of Hisense Electrical Appliances Shareholding Co Ltd.
It will contribute to the renovation of the industry, though, he added.
Since 1996, the country's color TV industry has been haunted by endless price wars.
For example, the price for a 21-inch color TV has dropped from around 1,400 yuan (US$168.67) in early 1999 to 800 yuan (US$96.38) late last year.
The result of such price wars is meager profits and a shortage of funds for technological development and research.
Domestic color TV enterprises badly need to upgrade technology and services in order to gain a firm foothold in the domestic market, according to Jiang Feng, secretary general of China Household Electrical Appliances Association.
"Only with new and advanced technology can they compete with foreign enterprises," she said.
In wake of the fierce competition, many color TV manufacturers are altering their strategies.
For example, Guangdong Tony Electronics Group Co Ltd, formerly Guangdong Conrowa Television Factory, has joined two Hong Kong-listed companies -- Dongning High-tech (shareholding) Co Ltd and China Data and Information Co Ltd.
The group plans to realize sales of 2 billion yuan (US$240 million) this year, and by the end of 2003 it hopes that figure will be 6 billion yuan (US$722 million).
"The production of color TVs will continue to be one of our main focuses," a company executive said.
The current price wars among major color TV manufacturers has pushed many weak enterprises out of the market.
"However, the Chinese color TV market is still a big pie for all competitors," he said. (China Daily)
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