China Consumer Electronics Market Trend Report for the first half of 2018


China’s consumer electronics industry has shown an upward trend in consumption upgrades and new retail, accelerating the promotion of product upgrades, and requiring manufacturers and retailers to have a global outlook on channel layout


The potential value of traditional channels will be reevaluated, and more types of smart new retail will emerge. In the future, the retail market in China’s consumer electronics market will change, and the online plus offline model will dominate the future.

With the rapid rise of China’s middle class, the purchasing power of consumption and the pursuit of quality life are constantly improving, and the trend of consumer electronics consumption is also on the rise.

Consumption upgrades become the core driving force for the growth of the consumer electronics retail market


In the first half of 2018, according to GfK retail monitoring data, the retail sales of home appliances, including TV, air conditioners, refrigerators and washing machines increased by 3% year-on-year, retail sales increased by 5% year-on-year, and the demand for better products was growing. According to the scale of retail sales, the omni-channel market of the home appliance market in the first half of 2018 exceeded 32.2 billion USD (200 billion yuan).

As one of the important categories of technical consumer goods, 3C products (computer, communication and consumer electronics) have also shown a good development trend. In the first half of 2018, according to GfK retail monitoring data, retail sales of the mobile retail market increased by 6% year-on-year, and PC products increased by 5% year-on-year.

Among them, Suning’s mobile phone growth rate is higher than the market several times. It can be seen that the advantages of the integrated retail platform that is dominated by offline and online are gradually emerging.


China’s overall online and offline consumer electronics market consumption upgrades intensified


In China’s overall consumer electronics market, offline channels are the main channel for consumption upgrades. Taking traditional home appliances as an example, according to GfK monitoring data, the proportion of retail sales in offline markets reached 70% in 2018. High-end consumer groups pay great attention to product experience and design, so the offline market has an innate advantage over the online market.

The sales of omni-channel high-end products have been on the rise. If retailers pay attention to the high-end consumer demand of traditional home appliances, the proportion of retail sales of high-end products in the offline market is as high as 87%.

The consumption upgrade trend has continued in the past few years, and the proportion of retail sales of high-end products has increased from 21% in 2012 to 23% today. All-channel retailers such as Suning, high-end products accounted for 27%, which is the driving force. An important channel for consumption upgrades.

The trend of consumption upgrading has gradually shifted from the primary and secondary markets to the third- and fourth-tier markets. The primary and secondary markets are the main market dominated by traditional home appliance chain channels. Major retailers are responding to consumer experience and demanding consumer upgrades through storefront transformation and remodeling.

In the third- and fourth-tier markets, the pursuit of good products by consumers has become stronger. The retail sales of mid-to-high-end products are growing faster than the first- and second-tier markets. Retailers are aware of this huge market and are beginning to accelerate their layout in the offline market.

From the beginning of the year to the end of the year, the marketing war in the consumer electronics industry has never stopped. E-commerce promotions have been normalized, and consumers are becoming accustomed to it, so prices will no longer be the only concern for consumers. The demand for consumption upgrades has also spread to the whole channel.


Smart home and IOT (Internet of Things) scenarios will reshape the retail format, and offline channels gain value revaluation opportunities


In the past few years, the AI of home appliances has remained at the stage of simple intelligence. However, smart speakers have been introduced frequently in the past year. The popularity of AI applications has brought new development opportunities to smart homes. In the next decade, smart homes and IOTs are a huge development opportunity for manufacturers and channel providers.

How to show and experience the value of IOT in retail;how to make different smart home scenarios in retail and how to provide one-stop smart home solutions are very important issues for manufacturers and retailers.

For offline channels, there will be new value revaluation opportunities due to the innate advantage of the consumer experience. Visionary vendors and retailers have focused on rebuilding their smart home retail prospects in the future, and retailers with online and offline advantages will have more imagination space in new retail.


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