Friday, May 20, 2011

Chinese household electrical appliance enterprises rush rural market but difficult to avoid a price war

"This time-limit of home appliances to the countryside products increase for foreign investment enterprises, is a very good chance. "27 January, sharp business (China) co., Ltd. in the Sakai Board of Directors accepted the Nanfang daily reporter as is said, he noted that, based on the countryside products price increase this year, the sharp not only increased the tender type and category of products, but also expanded its sales territory.

Through the Department of Commerce's latest home appliances to the countryside to sales data, the reporter noted that in the past year the performance of household appliances to the countryside, and Qingdao Haier, Guangdong midea, Tcl, and other domestic appliances giant is in stark contrast to the usual in Beijing, Shanghai, Guangzhou and other first-tier cities "yelling at the maximum winds" foreign brand performance without exception. Of these, only the Hangzhou Panasonic a hard packed into the sales section 26, including Hitachi, LG and other foreign brands in sales you are far left behind.

Household appliance industry veteran observer liubuchen analysis noted that, while home appliances to the countryside to limit price increases for foreign investment enterprises can further expansion of the product category and model, but because of foreign brands in rural markets, distribution channels, as well as its own high-end price positioning, in the next year, the household appliances to the countryside policy will remain in the hand-made brand a "trump. However, some analysts said, accompanied by a large number of foreign-funded enterprises to participate actively in the household appliances to the countryside bidding as well as in rural areas develop sales channels of progressive, rural household appliance market become and foreign enterprises rush battle inevitable.

Tender announcements in the countryside of foreign-funded enterprises have hurried to tender

Different from home appliances to the countryside 2009 have been bidding on the side line of foreign-funded enterprises, January 25 to 26 November in Beijing home appliances to the countryside, in addition to the Sony bid, including sharp, Samsung, LG, foreign TV companies have joined the household appliances to the countryside of the tender.

Obviously, the foreign company is not involved in the household appliances to the countryside act urgently on the spur of the moment. As household appliances to the countryside of CTV limited price $ 3500 for numerous foreign capital CTV brand had to abandon the countryside opportunity, according to the Department of Commerce's data show that in 2009, in addition to the sharp, LG, CTV enterprises, Samsung, Toshiba, Philips, foreign TV collective aphasia.

But this also led to a foreign capital CTV brand sales in the household appliances to the countryside was sales system is far behind. However, the 2010 TV the price-cap raised to $ 7000 to foreign brands bring a lot of temptation, which, although the first bid TV, Samsung countryside will take out 22, 26, 32, 40 inch LCD television and a tender for the 42-inch plasma. In addition, Panasonic, Philips, Toshiba also has a variety of flat-panel TV.

Also this year the "sharp will refrigerators, washing machines product included in the tender. "Sakai power told reporters that the reporter noted, in the white areas, this year's home appliances to the countryside products bidding has shaken off the Siemens washing areas dominated the ice, Samsung, LG, Panasonic, HP, and other foreign brands have joined it.

Industry noted that foreign brand, the price increase is most favourable to foreign brand products extended to rural areas. At the same time, since early last year, Japanese household electrical appliance enterprises almost all fall into the trap of losses, and also makes them slow down the pace of foreign expansion, now, with the global economy, a warming of the recapture of the domestic sales share or will be the next foreign-funded enterprises are the focus of attention. It is understood that, at present, including the sharp, many foreign companies have started bringing home appliances specifically set up for the product development team.

Issues channel construction is the most restrictive in foreign

In this year's home appliances to the countryside bidding process, despite the large number of foreign-funded enterprises demonstrated a positive attitude, however, Sony, still no go for it. According to Sony (China), Nagata Qing Kang, Chinese home appliances to the countryside products have special requirements, if you meet this demand, Sony flat panel TV production efficiency and product models to be considered.

In this regard, China electronic Chamber of Deputy Secretary-General Lurenbo points out that now Sony 's, city market shrinking, rural market and the sharp, LG, and Samsung to participate in a new tender, Panasonic and other companies will be pulling the gap, Sony's rejuvenation will be more difficult.

According to the household appliances to the countryside to the requirements of bidding documents, home appliances to the countryside of color television service and maintenance points must reach 90 per cent of County and city-level coverage, tender of color must also be based in our rural market power instability, weak, and so on design, and most of the foreign-funded enterprises do not have these conditions. In addition to product model, the reporter noted, for foreign-funded enterprises, the constraints involved in home appliances to the countryside to tender factors lies in the rural channel building vacancies. To color TV as an example, including Sony, sharp, Toshiba, Samsung, LG, foreign capital CTV brand, their branch and after-sale maintenance points are mostly concentrated in the first and second-tier cities, three or four-stage market layout almost blank State.

"It is true that in the rural market channels, we did not occupy a dominant position, therefore, we also hope to cooperate with more agents, and actively develop its network in rural areas. "Sakai power told reporters; Nagata Qing Kang also admitted that China's rural market, Sony is an unfamiliar brand.

On the one hand, domestic electrical appliances manufacturers "in rural markets have congenital advantage, already have the corresponding basis; on the other hand developing rural market is not an overnight, short time to dry. "For bringing foreign brand is rushed to join the army, Skyworth Group Vice President Yang Wen yesterday in the interview, as is the evaluation. Problem-fire spell rural market led to a price war, however, even foreign brands in rural market level to develop and prices still exist & ldquo

; Short-Board ", but does not impede foreign brand deeply exploit the rural market confidence. LG Guangzhou body long Park Hee Jong recently in an interview with reporters, said that in the next year, the LG will further speed up three or four-stage market expansion.

"In the early home appliances to the countryside to bid, LG finalist products less, however, as the household appliances to the countryside to the maximum limit of step by step, and we are working to increase them to rural markets. "Park Hee Jong said the reporter noted, in this year's home appliances to the countryside to bid at the meeting, in addition to flat panel TV, LG is also the first time put ice cleaning products.

Samsung (China) headquarters TV marketing lesson long Li Ying also admits, in the countryside at the beginning of last year tenders, because their own channels, as well as after-sales service building is weak, Samsung did not give priority to home appliances to the countryside, but after a year of positive improvement, Samsung has in some areas of home appliances to the countryside products bidding.

However, apart from channel construction aspects of short, prices are also tied to foreign-funded enterprises towards one of the reasons for the rural market. Journalists visited Guangzhou suning, GOME, etc chain stores to find the same size of flat panel TV, most foreign brand than domestic brands 20%-30% of the price, but the price difference does not necessarily accepted for rural consumers. To this end, Li Ying told reporters, and not worry about Samsung products in rural market price advantage exists, "Samsung join home appliances to the countryside, on the one hand to support national policies, on the other hand can also give rural consumers more affordable."

Industry noted that foreign brand, in rural areas and the possibility of establishing channels will not be too large, is still mainly through SUNY, GOME chain stores, etc, as well as three or four-stage market agents cooperate to boost sales, however, once the foreign brands in price to continue to make concessions, the domestic brands in the marketplace or in rural areas will be challenged, and foreign brand price war inevitable.

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