Interesting Conclusion
As we have noted in the past, China’s outlook on the CE space tends to be positive regardless of the surrounding circumstances. This positive cast is quite pervasive, especially when reading local Chinese articles about various aspects of CE products and the industry in general. While we have come to assign ‘enlightened self-interest’ to this ethical challenge, there are times when it either makes no sense or bypasses some obvious questions.
In an article by a contributor to a local Chinese rag, the contributor defined a set of data concerning the price of TV sets in China. Citing the decrease in share of the two lowest priced segments, and the increased share in segments between 2,000 yuan and 40,000 yuan, the conclusion was that consumers’ price sensitivity had decreased over the last year and were more accepting of higher quality TV sets, essentially high-end TVs. While the high-end TV market is certainly a focus of TV brands, especially in China where margins are thin, the article does not mention the fact that TV panel prices have been rising and set prices have been doing the same for the last year, reducing the number of units available in low priced categories and increasing the number in higher priced categories. Yes, we would like to be optimistic as to the Chinese consumers’ ability to shrug off higher TV set prices but that tends not to be the way economics works, making a direct correlation between price tier share and customer buying plans more promotion than reality..
In an article by a contributor to a local Chinese rag, the contributor defined a set of data concerning the price of TV sets in China. Citing the decrease in share of the two lowest priced segments, and the increased share in segments between 2,000 yuan and 40,000 yuan, the conclusion was that consumers’ price sensitivity had decreased over the last year and were more accepting of higher quality TV sets, essentially high-end TVs. While the high-end TV market is certainly a focus of TV brands, especially in China where margins are thin, the article does not mention the fact that TV panel prices have been rising and set prices have been doing the same for the last year, reducing the number of units available in low priced categories and increasing the number in higher priced categories. Yes, we would like to be optimistic as to the Chinese consumers’ ability to shrug off higher TV set prices but that tends not to be the way economics works, making a direct correlation between price tier share and customer buying plans more promotion than reality..
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