Samsung Elec. Eyes China’s Mid to Low-end TV Market

Samsung Electronics will shift from high-end TVs to mid to lower priced models to grab a piece of the rapidly expanding television market in rural China.

The Chinese government is subsidizing up to 13 percent of home appliance purchases by rural households.

Park Keun-hee, president and CEO of Samsung Group Greater China Region, told The Dong-A Ilbo that his company will take advantage of the Chinese government’s TV subsidy to expand its market share.

The subsidy program began in several areas of China in December 2007 and was expanded to the entire country in February this year.

Samsung has begun to mass produce 26-inch LCD TVs costing some 3,500 yuan (518 U.S. dollars), the limit of the subsidy. The company had focused on 46-inch models.

“Demand is rapidly shifting from cathode-ray tube TVs to LCD in China’s rural areas,” Park said. “While maintaining our premium product strategy, we will also try to increase our share in the Chinese market to more than 10 percent.”

Samsung has participated in the subsidy for several products including mobile phones, refrigerators and washing machines but not for TVs. The company, however, is believed to have decided to target the mid- to lower price TV market since focusing on premium products could undermine its commanding presence in the rapidly growing Chinese market.

According to market researcher GfK, Samsung is the third-biggest seller of LCD TVs in China with 9.9 percent of the market, behind Sharp of Japan with 9.5 percent and Konca of China with 9.3 percent.

In addition, Chinese TV makers are rapidly expanding their market shares by taking advantage of the subsidy program. A source at an LCD panel supplier to Chinese TV makers said, “One analysis suggests that the share of Chinese makers in the Chinese TV market jumped to more than 60 percent from 50 percent last year.”

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