The electronics industry in China has developed rapidly over the last few decades. China overtook the United States and became the largest consumer electronic market in 2013. A third of global consumer electronic sales occur in China.
China is becoming the main driver in the global consumer electronics industry. It’s no surprise to see the rapid growth in the consumer electronics market in China considering the countries large population, with 160 Chinese cities having a population of more than one million people, in comparison to the U.S. having only nine cities with more than one million people.
In addition, China’s economy is expected to grow 7.4% this year, a figure also higher in comparison to the U.S. The most significant growth in China’s retail market is mainly with mobile phone products, which has a 16% retail sales growth.
Note: This article was originally written in 2015.
How is the Chinese Market?
China is still known as the world’s factory, despite recent potential changes. Electronic devices and home appliances from companies ll over the world are made in China. However, these foreign products are more and more being challenged by domestic ranges.
Samsung electronics like the incredibly popular Samsung Galaxy line of smartphones are now competing with Chinese brands like Huawei and Xiaomi. Larger electronic products like smart home TVs, washing machines, and series 4k home theater systems are being developed in larger numbers than ever by Chinese producers.
The Television Market
China’s television (TV) market is rather mature, with the main focus of development on new technology and new sales channels in order to have stronger growth. There were 42 million TV units sold in 2014, and in 2015, this figure declined by 6.7%.
The main driving factors of sales are the large screen, high definition (HD) smart TVs. China’s HD TV sales now account for 14% of the market, where 40% of TVs sold in China are 46” or more, and 70% are smart TVs. Smart TVs and HD screens make up the more significant current trends in the TV market.
Online market sales are an obvious trend, accounting for annual total TV sales of 15%. With the rapid development of the online market, the proportion of online sales is expected to grow sharply.
PCs and Tablets
China’s PC market is still developing, and the tablet will take up much of the growth in this area. The smartphone market is very active, with the market demand for smartphones continuing to rise.
China’s mobile communications products have grown in recent years, as evidenced by a 75-80% penetration rate for 4G in just 2 years. This growth accounts for more than 420 million 4G devices.
Many Chinese consumes own more than one PC/laptop. This is typically because Chinese consumers often purchase a different PC/laptop to meet different needs rather than one laptop to meet all their needs. Rapid growth of the tablet market began in 2010, meaning the market’s history is short, however it does have a bright future.
The tablet market is expected to overtake the PC market, as there with its significant growth in sales and market share. The PC market in western countries may already be mature, however, as a developing country, China still has much room for growth in this area.
It is evident that the mobile phone market is the most significant opportunity in the consumer electronics industry, as computers and televisions proved to be in the more mature stages of development in comparison to the mobile phone market.
China is still a developing market, and there are still some factors that need to be considered.
Firstly, more and more people focus on mobile development when desktop development is also still demanded. There are an untold number of companies in China’s southern cities that are focusing solely on mobile development. It remains to be seen whether other companies will appear to fill the gaps left in desktop needs.
Secondly, online shopping platforms could grow sales immensely, however a combination of both online and offline sales is obviously the most ideal for growth. While online platforms like Taobao and Alibaba remain obvious leaders, Chinese consumers still report an interest in being able to physically see items when considering a purchase.
Thirdly, pricing and promotion should be localized, meaning companies need to pay greater attention to details when managing things like smartphone shipments in multiple countries. There is also a greater and greater need to ensure advertising fits with local consumer expectations.
Finally, emerging technologies are a major source of growth in the future electronics market. With AI and other high-tech solutions being explored in cities across China, companies should pay close attention to how the market adapts to new products.
Online retail is the biggest way for companies to reach consumers today. In the forecast period coming, companies like the Sony Corporation, Hewlett Packard, and Apple, are rethinking the ways they reach Chinese and international consumers.
Products such as smart watches, wearable health monitoring devices and 3D printing are main drivers for the future of market growth in the consumer electronics industry.
Furthermore, there are questions about the long-term potential for manufacturing to leave China and become more diverse. As countries across South-East Asia open themselves up to new investment opportunities, China may have to consider it’s role in supply-chains.
How Can INS Global Help You Benefit?
Taking advantages of the opportunities presented by the Chinese market means having the right people in the country. Whether that means seeking the services of a local recruitment expert, or finding a way to safely and efficiently place a sales team in China, INS can help you.
Our legal experts are always available to provide clear and up-to-date information on Chinese legal requirements for foreign companies. Also, our in-country HR outsourcing services can take the hassle out of expansion into this market filled with both opportunity and complexity.
For over 15 years we have been an industry-leading provider of global mobility solutions in the Chinese market. Our range of PEO and EOR solutions allow you to manage overseas staff compliantly from hiring to termination. Contact one of our experts today to learn more.