China’s Soaring Flat Panel TV Market

As the first year of “the Twelfth Five-Year Plan”， the year 2011 will witness many emerging opportunities for development. Meanwhile， the CES (Consumer Electronics Show)， which is the herald of the global consumer electronic industry， has been held in Las Vegas， the United States.Almost all renowned brands in the flat panel TV market， both foreign and native， have made use of this opportunity to promote their products. The purpose of promotion is just enhancing brand popularity and grabbing more market share.From a global perspective， the rapidly developing Chinese market has become indispensable to flat panel TV producers for conducting business. More and more foreign brands are ready to find their ways into the Chinese flat panel TV market in a fashion that is easily accepted by Chinese consumers.The product quality of many foreign flat panel TV brands is always an important factor that wins favors of consumers. For example， industrial giants like SAMSUNG and LG have been always dedicated to research on display technology and strive for perfections in technological accumulation， process conditions and product workmanship.Another example is SHARP， which has been claiming that their products sold in China all use panels originally manufactured in Japan， showing that SHARP is promoting the delicacy of its products for market recognition.From another perspective， the higher price enjoyed by foreign branded products over native brands is due to their absolute advantages in quality. The price will be higher if the LDC panel is produced in South Korea or Japan， and that is why in those early years， the average price of foreign branded flat panel TV exceeded the domestic ones by about 25%.However， the ever increasingly fierce competition of the Chinese flat panel TV market forces these foreign brands into price wars， which are very common in Chinese market. Currently， the price of foreign branded products has been very close to， or even lower than that of domestic brands， which is due to the powerful agent processing system of the foreign brands.Now many foreign brands， including PHILLIPS， SONY， SHARP and TOSHIBA， have all produced the TV panels and other end products through the agent factories in Chinese mainland and the Taiwan region. Take AOC for example， PHILLIPS not only allows AOC to use its brand in Chinese Mainland， but also extends such privileges to AOC in European regions， which indicates that PHILLIPS has sold its agent products across the world.Also， Toshiba has given some of its orders to KONKA and TCL， shifting the advantage of low costs to its agent products， and then competing with Konka and TCL. This business model marks a new avenue for foreign brands to enhance their competitiveness in the Chinese market.As for Chinese consumers， the economic development and social advancements make them more and more mature， but generally speaking， products with high cost efficiency and differentiations seem more popular with consumers.From the perspective of urban consumers， as their disposable income rises， some high-end consumers have very strong consumption capacity. For example， around 100 LG 72-inch screen 3D TV sets were sold in China， each valuing RMB 180 thousand. For these high-end consumers， foreign branded products have strong attractions due to their quality advantage and brand popularity.However， common urban consumers seem to be more concerned about high quality， low price and after-sale service of products. Some time ago a foreign flat panel producer only provided a one-year guarantee， giving excuses that the LCD panel is not the main component. This issue soon escalated and triggered public concerns and discussions.Although this foreign brand producer later modified its guarantee package， this issue gave a warning to the whole flat panel TV industry: consumers not only pay attention to the price， but also attach great importance to the after sale services of products with high price and technologies like the flat panel TV. For this the foreign brands get along with consumers’ habits and captured their consumption preferences.In those third or fourth-tier cities or rural regions， flat panel TV enters the local market in accordance with the national encouraging policies. Based on the study of the policy of “home appliance to rural regions”， this policy brings diverse home appliances to consumers in towns and rural regions， and also ensures the producers’ profits， leading to a win-win situation. Therefore， the grab of this policy opportunity will better facilitate the entry of foreign branded products into the small cities and rural markets.China’s flat panel TV market is huge and it could be predicted that in future the market will be full of competition. For foreign brand producers， they should place more focus on the domestic consumers， adapt more to their needs， and develop new products that please consumer’s habits. They will have more market opportunities if they set up research center in China， establish more partnerships with domestic companies and add more Chinese elements to their products.