This article is aimed at introducing the present China consumer electronics market through the examples of some famous manufacturers in this field. Highlighting the point of view that a comprehensive market analysis of consumer electronics in China is of priority to the whole process of market entry.
The growth of the market due to the China’s government policies
It is quite unique that policies and regulations that the government promulgated play a critical role in the development of the consumer electronics market in China. This market rose to prominence after the liberalization of the economy under the national strategic policy of accelerating the “informatisation” of its industrial development. As of 2011, China is the world’s largest market for personal computers. Since China became the largest consumer electronic market instead of US, it is reported that approximately 1/3 of global consumer electronic sales happen in China. And in 2013, the Chinese government issued 4G licenses to three major Chinese telecom operators, namely China Mobile, Chine Telecom and China Unicom, marking the beginning of a new era in China’s high-speed mobile network. This significant move had brought rocketing retail volume sales growth of 4G smartphones, so that many manufacturers accelerated the speed with which they launched new 4G smartphones in order to grab the crucial opportunities. Meanwhile, retail prices of 3G smartphones declined due to the numerous launches of 4G smartphones, which also stimulated retail volume sales of total smartphones, as 3G smartphones became more affordable. The issuance of 4G licenses continues affecting the tendency of related industries and keeps the potential of the smartphone market in China.
The reshuffle of brands that have already entered China’s market
Sony and Panasonic are two famous foreign manufactures that have already entered the market in China, but they have since become much more insignificant. Statistics show that their market share only reach 30% of Samsung in China in 2014. During the period in 2013 that Chinas economy had endured deceleration, the consumer electronics industry was inflicted quite heavy loss, except for tablets, smartphones and LCD TVs. However, the market segmentation of both enterprises put great emphasis on those products whose retail volume growth continued decreasing because of the impact of the macro-atmosphere. The failure of PSV was just a start of Sony’s depression. Though it was know that Sony is excellent at innovation of technology and new products, it had to choose to give up expansion in Chinas market. And Panasonic has stopped producing and selling TVs for the Chinese market, according to reports from Japan. Panasonic is reportedly also reviewing the future of its TV business in the US market. Some critics pointed out that those two Japanese giant electronic manufacturers would have had the same ending as Kodak, if they insisted on those traditional electronic fields. Despite the depression of the shares of traditional electronic products, the dynamic growth of tablets and smartphones was mainly driven by the continuous shift from feature phones to smartphones, as well as product upgrades from existing smartphone consumers. The accelerating growth of LCD TVs in 2013 was boosted by the closure of the policy of providing subsidies for energy-efficient products. This policy went into effect in mid-2012 and ended in mid-2013, leading many consumers to upgrade their televisions in the first half of 2013.
The revolution of distribution channels has promoted the sales in more areas in China
Nowadays, in China, online selling is so popular that many manufacturers of electronics choose to sell products on JD.com or Tmall etc, which contributes to the diversity of the sales channel and avoids many problems like establishing an outlet in a rural place. Despite the relatively small base, continuously rising disposable incomes in rural areas, together with increasing education and interest in consumer electronic products has stimulated demand and continued to drive volume sales in rural areas. Meanwhile, the expansion and penetration of retailers such as Suning and Gome into the rural areas has also played an important role to boost volume sales in rural areas. However, urban sales still account for the majority of volume sales of consumer electronics products thanks to the higher acceptance of innovative technologies and disposable income levels in urban areas.
To sum up, we believe that consumer electronics market in China is optimistic but also risky. And those who can always survive the crisis are certain to focus on and seek chances from the policies that governments issued. In addition, with the development of online selling, marketing strategies should be emphasized on expanding the distribution channels. According to the whole article, all the results were concluded from related market researches and just present a small part of this market. If you would like to enter this field, you may require further research on the consumer electronics market in China.
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