Fierce competition in China's saturated colour television-set market will force about two-thirds of manufacturers out of business in the next few years, according to a government survey. The survey, jointly conducted by the State Council Development Research Centre, Ministry of Information Industry and China Home Appliances Association, said the growing wealth in mainland urban families had been leading to a structural change in the TV market. Future development of the market would be technology-driven as an increasing number of wealthier families were willing to pay higher prices for quality products. The era of gaining market share through large sales volume was over, it said. The survey interviewed 23,400 families across the country. In light of changes in the development of the industry, the survey said the mainland's television market would be shared by three types of manufacturers, or about 15 brands in the next five years, State Council Development Research Centre researcher Lu Renbo said yesterday. At present, there are about 40 to 50 producers in the highly competitive market. In the early 1990s, the number was more than 80. 'Leading mainland players will control the mass TV market by volume, with their full production lines, lower manufacturing costs, well-covered distribution network and hot brand names,' Mr Lu said. 'There will be two to three enterprises to share this segment, which will account for more than 60 per cent of the market.' Mainland TV makers produce roughly 35 million units every year. 'Their products are medium to high-end products but profit margin is much lower when compared with the top-end market,' said Mr Lu. The top-end market would be dominated by several major foreign brands such as Sony and Panasonic, while a number of the smaller manufacturers would produce cheap and price-sensitive products to cater for consumers in rural areas, according to Mr Lu. Smaller or medium players would be either merged with or acquired by the larger producers, he said. 'Manufacturers with strong capital back-up such as sound financing ability will have more power to compete,' he said. The survey found that 96.3 per cent of urban families interviewed had colour TVs, reflecting the market in urban cities had become saturated. Of these, 30 per cent had more than one TV set at home. TCL International Holdings and Sichuan Changhong Electronics were the most popular brands for families which bought flat-screen TVs. About 1.4 per cent of interviewed families had rear-projection TVs, which mostly are foreign brands. Mr Lu anticipated that total production volume of the TV market would not decline, sustaining almost 35 million units per year. Faced with a saturated TV market at home, manufacturers would accelerate the expansion of their overseas markets, according to Mr Lu. This year, total exports of TVs was estimated at more than 10 million units and this number would continue to increase in the coming years. Exported products were lower-end and cheaper than foreign brands, he said. For instance, Sichuan Changhong exported TV sets worth US$614 million in the first nine months of this year, compared with US$100 million for the whole of last year. Increased exports helped the company post a 20.8 million yuan (about HK$19.4 million) third-quarter net profit this year.