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Audio-visual Products Usurp Mobile Devices: the Spring 2016 Hong Kong Electronics Fair Survey

While a majority of electronics industry players interviewed at the Hong Kong Electronics Fair 2016 (Spring Edition) expected steady sales for the coming year, buyers were generally less optimistic than exhibitors. This absence of a shared view may reflect the fact that the uncertain global economic environment is clouding the immediate prospects for the electronics market, as well as many others. Regardless of this, there was a degree of consensus in terms of the most promising markets for the sector, with the traditional strongholds of North America and Western Europe, as well as the emerging economies of China and the ASEAN bloc, being backed by most respondents.

Meanwhile, after years of rapid growth, mobile devices have been usurped by electronic/electrical accessories and audio-visual items as the most promising growth products for 2016. The wearable electronic items are also expected to enjoy massive growth, and consumers are now willing to pay a premium for electronic items with smart features.

In April this year, HKTDC Research polled 551 buyers and 271 exhibitors at the Hong Kong Electronics Fair 2016 (Spring Edition), one of the world’s largest gatherings of electronics professionals. Attendees were asked for their views on the prospects for electronics market prospects and the trends likely to emerge over the coming years.

 

Photo: Wearable electronics: Ever more popular with consumers.
Wearable electronics: Ever more popular with consumers.
Photo: Wearable electronics: Ever more popular with consumers.
Wearable electronics: Ever more popular with consumers.
Photo: The Hong Kong Electronics Fair 2016 (Spring Edition).
The Hong Kong Electronics Fair 2016 (Spring Edition).
Photo: The Hong Kong Electronics Fair 2016 (Spring Edition).
The Hong Kong Electronics Fair 2016 (Spring Edition).

 

Diverse Views on 2016 Market Prospects

According to the survey results, respondents hold diverse views on the global market outlook for 2016. Notably, 34% of buyers and 56% of exhibitors said they expected their sales to rise this year. This represents an increase in the number with the same sentiment attending the October 2015 electronics fair. Although a higher number of buyers said they expected sales to decrease in 2016 (24% compared to 17% in the previous poll), only 6% of exhibitors said they expected a sales decline in 2016, compared to the 14% recorded in October.

On the whole, 76% of buyers and 94% of exhibitors expected their sales to either remain unchanged or to increase in 2016. Buyers are generally less optimistic than exhibitors indicating a lack of consensus across the industry.

 

Chart: Market Outlook for 2016
Chart: Market Outlook for 2016

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Overall, North America was rated as the most promising of the traditional markets for 2016, with 49% of respondents seeing it as “very promising” or “promising”. The next most promising was seen as Western Europe (45%), followed by Australia and the Asia-Pacific region (43%), and Taiwan (41%). In terms of emerging markets, the Chinese mainland was rated by 51% of respondents as having the highest potential, followed by ASEAN (37%), other Asian countries (32%) and Russia (27%).

All Respondents’ Opinions: Growth Prospects for Overseas Markets in 2016

Chart: Traditional markets
Chart: Traditional markets
Chart: Emerging markets
Chart: Emerging markets

Remark: The figures represent the share of respondents who rated the corresponding markets as “promising” or “very promising”.
Source: HKTDC Survey

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Mobiles Overtaken by Consumer Electronics

As indicated by 15% of all surveyed respondents, electronic/electrical accessories and audio-visual products have usurped mobile devices and related accessories as the products seen as having the best growth prospects in 2016. This is mainly due to the fact that demand for mobile items has levelled off after years of continuous growth. In fact, only 10% of respondents polled - compared to 19% last October - rated mobile items as the products with the most promising growth. Indeed, many industry players are now looking to other consumer items and their related accessories to boost market demand. Certain virtual reality (VR) gears, which are closely related to audio-visual applications, are now hotly discussed among the players. A number of categories, including home appliances, wearable electronics and digital imaging, are all rated higher than they were in October.

Chart: All Respondents: Product Category with Highest Sales Growth in 2016
Chart: All Respondents: Product Category with Highest Sales Growth in 2016

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Proliferation of Wearable Electronics

With regard to wearables, 70% of respondents thought that market demand for such items would be “promising” or “very promising” over the next two years. Smartwatches, smart wristbands and other health-care/sports-related wearables took the lead, with 46%, 37% and 24%, respectively, of respondents indicating that these are the items they would expect to enjoy the highest growth in the next two years.

 

Photo: Hong Kong Electronics Fair 2016 (Spring Edition).
Hong Kong Electronics Fair 2016 (Spring Edition).
Photo: Hong Kong Electronics Fair 2016 (Spring Edition).
Hong Kong Electronics Fair 2016 (Spring Edition).
Photo: Audio-visual products: High hopes for growth in demand.
Audio-visual products: High hopes for growth in demand.
Photo: Audio-visual products: High hopes for growth in demand.
Audio-visual products: High hopes for growth in demand.

 

In addition, audio-visual accessories - including earphones/headphones that are compatible with mobile devices (23% for wireless and 20% for wired models), as well as 3D goggles for watching wide-screen movies (22%) - are among the items also seen as having a high growth potential. This is in line with the optimism relating to the audio-visual sector overall.

All Respondents: Market Potential of Wearable Electronics for the Next Two Years

Chart: Overall market demand
Chart: Overall market demand
Chart: Wearable products with greatest potential
Chart: Wearable products with greatest potential

* Compatible with smartphones, with smart wristband functions and enhanced functions like phone calls, email, music and/or camera, etc.
** Compatible with smartphones, with health monitoring, sports and/or GPS functions only.
Remark: Figures in brackets correspond to opinions for 2016 from the Electronics Fair held in October 2015.
Source: HKTDC Survey

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Smart Home: the Price Keys

Other items of interest were seen as smart home and smart living products. As well as a number of related systems/solutions and Internet of Things (IoT) applications, they were seen as products with a high growth potential by a little over 8% of respondents. This is lower than the 13% accorded them in October, possibly due to the slowdown in the economy that is expected to have a negative impact on short-term consumer spending on such “futuristic” products. Despite this, given the widespread uptake of IoT technology, the smart home and smart living sectors are still regarded by many industry players as having significant growth potential.

 

Photo: Smart technology: An important growth area for the electronics industry.
Smart technology: An important growth area for the electronics industry.
Photo: Smart technology: An important growth area for the electronics industry.
Smart technology: An important growth area for the electronics industry.
Photo: Buyers and exhibitors at the Hong Kong Electronics Fair 2016.
Buyers and exhibitors at the Hong Kong Electronics Fair 2016.
Photo: Buyers and exhibitors at the Hong Kong Electronics Fair 2016.
Buyers and exhibitors at the Hong Kong Electronics Fair 2016.

 

Wireless system items for connection to internet/mobile networks (including Zigbee, Bluetooth and Wi-Fi devices), audio-visual items with smart functions, and wireless charging devices for smart appliances were rated by 73%, 72% and 70% of respondents, respectively, as the smart product categories with the highest growth prospects in 2016.

Most respondents said they expected consumers would be willing to pay either an 11%-20% premium (according to 39% of respondents) or a 1%-10% premium (46% of respondents) to purchase electronic products equipped with smart home applications. Overall, industry players generally believe they could elevate the value of their products if smart features are appropriately incorporated into such items.

 

Chart: All Respondents: Growth Prospects of Smart Home Appliances in 2016
Chart: All Respondents: Growth Prospects of Smart Home Appliances in 2016

Download excel

 

Chart: All Respondents: Consumers’ Willingness to Pay a Premium to Purchase Electronic Products
Chart: All Respondents: Consumers’ Willingness to Pay a Premium to Purchase Electronic Products

Download excel

 

Respondents’ Profile

Of the 551 buyers canvassed, 38% were based in Hong Kong, with the remainder based overseas. Their major selling/export markets were the Chinese mainland (26%), Asia (other than the Chinese mainland) and Hong Kong (21%), and Western Europe (19%).

Of the 271 exhibitors polled, 41% were based in Hong Kong, with the remainder based overseas. Their major selling/export markets were Asia (other than the Chinese mainland) and Hong Kong (32%), Western Europe (23%) and North America (19%).

Content provided by Picture: Wing Chu
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