HKTDC Research: Cautious Electronics Market Outlook for 2012
Electronics consumers in both mature and emerging markets have continued to chase after such trendy technological products as smartphones and tablets. But the global economy is currently clouded by the debt crises hitting Europe.
At the Hong Kong Electronics Fair 2011 (Autumn Edition) held from 13 to 16 October 2011, which is one of the world’s largest gatherings of professionals in the electronics field, HKTDC Research conducted a survey against such a market environment.
Interviews were conducted with 507 buyers and 302 exhibitors, who were asked their views about the prospects for the electronics market and the impact of the debt crises. Major findings are as follows:
Impact of the debt crises
About half of the buyers (46%) and 39% of the exhibitors forecast that the debt crises would bring down their electronics sales by around 10% in the next 12 months.
Majority of the respondents indicated the US and west European countries like Italy, Spain and Greece were the markets most affected by the debt crises. But only a few (less than 10% of the respondents) named Asian countries like the Chinese mainland and Japan as the most affected markets.
Nevertheless, 25% of the exhibitors perceived that payment risk of their clients was increasing, and 12% of the buyers found that their suppliers were increasingly asking for payment before delivery in view of the slowing global economy.
16% of the exhibitors projected the FOB price of their products would be slashed by 5%. The buyers were a little bit more pessimistic, with 23% of them indicating that the retail price of their products would decrease by 10% in the next 12 months.
Cautious outlook, though relatively positive
On the whole, about two-thirds (67%) of all the surveyed buyers and exhibitors at the Fair expected their business in 2012 would be the same or better than 2011.
The Chinese mainland is the brightest spot among the respondents, as it is perceived as the fastest growth market in 2012 by 53% of the buyers and 32% of the exhibitors.
Meanwhile, buyers choose India (19%), Southeast Asia (15%) and the US (12%) as the next fastest growth markets, while exhibitors look to Central and South America (18%), Southeast Asia (18%), the US (16%) and Russia/Central and Eastern Europe (15%).
It seems that the respondents are adopting a more cautious outlook towards the future. The proportion of respondents indicating a worse market prospect for 2012 amounted to 33% #, up from the 11% * that predicted a worse market outlook for 2011.
Nevertheless, a majority of respondents (79% of buyers and 73% of exhibitors) revealed that the Japan earthquake of March this year no longer had an impact or only had a slight impact now on their business, lessening pressure on buyers and exhibitors to a certain extent.
Product and sourcing trends
Product-wise, computer products, especially tablets, were praised by most buyers as the fastest growth products, whose sales were expected to grow by 15% in 2012. This was followed by telecommunications products, including both smartphones and basic mobile phones, as well as audio-visual products like large-screen TV sets.
A point of interest is that buyers expected sales of solar products, which were ranked seventh as the fastest growth products, would grow by 13% next year. Interested items include solar or photovoltaic (PV) cells, panels, batteries and battery chargers.
Buyers’ Opinions: Selected Products Enjoying Fastest Growth in 2012
Product
Preferred features
Growth rate*
Computers & peripherals
- Tablet computers
Light weight with 7”-10” touch screen
+20%
- USB flash memories
Good design with large capacity
+8%
- Notebook/PC computers
Multimedia functions
+20%
Telecommunications products
- Mobile phones (incl. basic models & smartphones)
Touch screen, voice recognition
+15%
Audio-visual products
- Large-screen TV’s
Interactive functions, 3D, LED backlight
+15%
- Earphones/headphones
Simple but stylish design
+5%
- Speakers
Support iPhone/iPod and MP3
+18%
- Sound and hi-fi systems
Wireless functions, slim design
+14%
* Median rate
65% of the buyers were increasingly sourcing environmentally friendly products, amid the growing concern on environmental protection around the world. Also, buyers tended to source more mobile devices (63%), accessories (56%), silver-hair products (24%) and pet electronic products (19%) at the same time.
Profile of respondents
302 exhibitors: 48% are based in Hong Kong, 34% in China and 18% in other regions.
507 buyers: 24% are with major export markets in the US, 17% in the Chinese mainland, 8% in Germany, and 5% each in Hong Kong and France.
