Consumer electronics retailer Suning Appliance Co. yesterday said it will cut product prices by up to 50 percent this month because the costs of raw materials have tumbled and it tries to boost demand amid a lackluster retail market.
Suning, based in Nanjing, Jiangsu Province, will also open another 50 outlets by the end of this year to fulfill this year's goal of adding 200 stores, it said in an e-mailed statement.
"There is much room to reduce the prices of electronic products due to falling raw material prices," said Jin Ming, executive president for marketing at Suning Appliance Co..
He sees prices of white goods such as air-conditioners and refrigerators to fall by 30 percent while those for television sets, mobile phones and computers to drop by at least 15 percent.
According to statistics from the Nonferrous Metal Industry Association, prices of major nonferrous metals, including steel and aluminum - the major raw materials for electronics products, plunged about 20 percent last month. Transport fees on raw materials also slumped as freight charges from Brazil and Australia, the major metal-exporting countries, eased an average 10 percent.
Suning also reiterated it would boost its presence in third- and fourth-tier cities.
"The current economic turmoil enhances our determination and confidence to expand our footprint," said Sun Weimin, the company's president, after many small retailers in third- and fourth-tier cities suffered a sales drop and many have been forced to close.
The pace of Suning's growth will not slow and will accelerate in the coming year, a company official said.
(Shanghai Daily November 5, 2008)