Business Intelligence on Retailing, Franchising, and Consumerism in China

Dazhong Posts Net Profit Increase Due To Beijing Olympics

Dazhong Electronics has recently released a sales report on its appliances sales during the 2008 Olympic Games and Mao Xiaojun, general manager of Dazhong, said that the company's net profits doubled in the first six months of 2008.

The report shows that in July and August, the sales of Dazhong flat panel TV sets increased by 121%. Of this, the sales of LCD TVs with screens of 42 inches and above reached 35,000. In addition, the its sales of computers, communications, and consumer electronic products were tripled compared with the same period last year.

Commenting on Dazhong's performance over the past six months, Mao said that Dazhong was still one of the top appliances channels in Beijing. After integration, the profitability of the company was raised greatly and it had achieved a doubled increase in net profit in the first half of 2008.

Referring to the process of integration, Mao added that the most difficult part was the integration of corporation cultures. The company will neither adopt the culture of Gome nor insist on its original way, but will develop a new way which is suitable for the new company.

Regarding consumers' concerns about price increases, Mao said that they had not received any notices from manufacturers and the company will not automatically raise prices even if they received a notice. He said that since 2000, a price surge has only happened in the air-conditioning sector of China's appliances industry. Once new products come into market, the prices of old products will continue to decline.

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