Exclusive Interview China Brands Show Comes to IFA Innovative technology, inspirational quality… the growing importance of Chinese exhibitors China continues to grow in importance as an exhibiting nation at IFA. We asked Wang Guiqing, Vice President of China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) what people can expect to see at the China Pavilion this year at the show. China is the world's largest manufacturing base and consuming market of electronic products. Chinese enterprises have always attached great importance to IFA, which is regarded as an important platform to showcase new concepts, new products and new technologies for global exchange and communication. Since the first Chinese exhibitor came to IFA Berlin in the mid-1980s, there has been increasing participation of Chinese enterprises every year in both exhibitor numbers and quality. This year, Chinese exhibitors are estimated to exceed 30% of the total number of exhibitors. There are 350 exhibitors in the Chinese Brand Pavilion, taking up nearly 4,000 SQ M net exhibition area. When it comes to big international brands, we can see a lot of Chinese leading enterprises like Huawei, ZTE, Lenovo, Haier, Hisense, TCL, Midea, Galanz, Changhong, BOE and Ecovacs moving forward. With brands like Cuori, Kaibo, Huayu, Yueli and Jide, the Chinese Brand Pavilion 32 brings together many of China's outstanding home appliance suppliers, with the latest design and trade opportunities for consumer electronics products and small domestic appliances. From a product perspective, the Chinese exhibitors will showcase all the mainstream consumer electronics and home appliances including smart phones, computers, routers, navigation equipment, acoustic appliances, gaming devices, major domestic appliances, small domestic appliances. It will also include wirelessenabled charger, a variety of wireless headphones, childrens’ computers, air purifiers and other innovative Currently, China is the largest electronic consuming market as well as the largest manufacture base for electronic and home appliance products technical products. Some cutting-edge technology like wearable devices, 3D printing, virtual reality, intelligent robots, smart appliances, smart home, and intelligent transportation will also be shown. Of course apart from the many smaller exhibitors, the bigger players are taking on major importance on a global scale - no longer just in China. Why it is important for them to become global players, and how are they managing this? In recent years, in the process of China’s wide and deep participation in global economic cooperation, Chinese enterprises grow rapidly, which is more distinct in electronic and home appliances sector. Currently, China is the largest electronic consuming market as well as the largest manufacture base for electronic and home appliance products. Thanks to their production quality, mobile phones and TV sets, as well as major and small appliances made in China are in the leading position around the world. And brands such as Huawei, ZTE, Haier, TCL and Hisense are well-known globally. The development of these prominent Chinese brands has reinforced their participation in international arenas such as IFA. China has always attached great importance to product quality and technology innovation. For example, Haier boasts five R&D centres in Japan, Australia, Europe, America, and Qingdao in China, which help that company in the localisation of designs. GREE invests more than 3 billion RMB every year in air-conditioner R&D. TCL has nearly 5,300 high-end R&D talents worldwide. Huawei pumps more than 10% of their annual sales revenue into R&D. In 2014, Huawei has 76,000 employees engaged in R&D, which amounts for 45% of the total employees. Their R&D expenses were RMB 40,845 million, representing 14.2% of total revenue. In the recent decade, Huawei invested more than RMB 190 billion in R&D. Furthermore, Chinese brands’ market share has been increasing. In 2014, Wang Guiqing Vice President of China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) Haier’s major domestic appliances ranked No. 1 globally in retail sales units, accounting for 10.2% market share. This is the sixth consecutive year for Haier to win this position. In the global TV sales ranking list, TCL and Hisense are among top 5. Chinese brands also build up their global aftersale service system. China's home appliance industry is undergoing a massive machine substitution strategy. China's home appliances feature the newest functions, superior quality, and stable after-sales guarantees. At IFA this year, Haier exhibits a new twin-drum washing machine and four-door adjustable freezer-fridge refrigerator. And Hisense brings its laser TV and ULED TV. ZTE will showcase a series of innovative products, such as the off-line voice recognition Star 2 mobile phone and multifunctional mobile laser projector SPro2, which improves PICO projector into a higher level. It can project 120”HD video with 200 lumens and can also act as a Wi-Fi router. During IFA 2015, Huawei will also release its flagship mobile phone product, and Lenovo will release Vibe X3. And Midea will probably present latest smart interconnected home appliances designed together with Xiaomi since their cooperation.
NOMADIC LIFESTYLE LAPTOPS & HYBRIDS HEADPHONES/EARPHONES WIRELESS SPEAKERS DRONES MUCH FOR THE DIGITAL NOMAD Mobile Still Reshaping CE Industry SMARTPHONE TRENDS Those with screens between 4.5" and 5.5", a thin body (less than 8mm), and premium camera features (more than 12 megapixels for the main camera), says GfK. More smartphones will have sports/fitness and health tracking to steal business from wearables... 4G unit share more than doubles in a year, capturing 58% in Q2 2015. Almost 58 % smartphones old in Q2 were 4G-enabled. TABLET MAKERS WILL FIGHT BACK "Longer life cycles, increased competition from other categories such as larger smartphones, combined with the fact that end users can install the latest operating systems on their older tablets has stifled the initial enthusiasm for these devices in the consumer market," said Jitesh Ubrani, IDC Senior Research Analyst, Worldwide Mobile Device Trackers. "But with newer form factors like 2-in-1s, and added productivityenabling features like those highlighted in iOS9, vendors should be able to bring new vitality to a market that has lost its momentum." Consumers continue to cut the cords more and more, taking their technology wherever they go. Not satisfied with any single device, they want it all wireless. And the speed of market change remains impressive with tireless innovation. Bob Snyder takes a closer look at the market. Yesterday they were heroes. Today smartphones and tablets have grown from teenagers to middle age adults in a few short years. Tablet sales are falling (worldwide unit sales declined -7.0% from last year in Q2, says IDC) and smartphones... well, as an industry we sell more and more but we make less money on those increased sales with each quarter (up 9% in W. Europe in units in Q2, but down 7% in value, says GfK). Mobile categories believe they compete against one another for the discretionary spend of consumers. We blamed tablets for killing laptop sales...we blamed smartphones (at least the 4.5" and larger ones) for Q2 2015 wearable device global shipments reached 3.6m units, with fitness and smart watches leading the way... SMARTPHONE SALES Q2 2014 VS Q2 2015 Units Sold (in mil.) Q2 2014 Q2 2015 killing tablet sales. But the real culprit is market maturation, a maturity that naturally comes with hardening of the sales arteries. Yet rather than a dead end on the street of mobile technology, the flat sales growth is more like a speed bump before entering the steady highway that goes for as far as you can see. As an industry we are selling hundreds of millions each quarter and the percent sales growth in certain categories is challenging precisely because we are already selling hundreds of millions of units. In that sense we are the victim of our own success: the industry pushed smartphones into the market in record time, pushing penetration up, up and up. Wireless broadband subscriptions now outnumber % Change Sales Value (in billion USD) Q2 2014 Q2 2015 Latin America 25.0 25.2 1% 7.4 6.2 -16% Central & Eastern Europe 14.7 15.2 3% 3.7 3.2 -15% North America 40.3 44.4 10% 15.4 18.2 19% Emerging APAC 36.2 44.2 22% 7.1 7.5 5% Middle East & Africa 31.9 39.4 24% 9.5 10.5 11% Western Europe 27.8 30.3 9% 12.5 11.7 -7% China Units 98.6 88.7 -10% 22.8 26.8 17% Developed APAC 13.8 14.7 6% 7.6 8.3 10% Total global units 288.3 302.1 5% 86.0 92.4 7% Source: GfK point-of-sales (POS) tracking data in 90+ markets, August 2015 % Change people in at least seven countries (Finland, Australia, Japan, Sweden, Denmark, South Korea and USA)- - a sure sign consumers have more than one mobile device that can go online. That alone ensures a healthy business in add-ons and accessories: music to the ears of headphone makers, cases manufacturers, mobile storage, mobile sound and others who live off the big, corpulent base of addictive mobile users we have created. Consumer electronics business has always worked to this maxim: when one door closes, another one opens. Today the nomadic lifestyle eagerly awaits the promising market development of wearables, a large category (with many types of products) but not so-large sales... yet. The Q2 2015 wearable device global shipments reached 3.6 million units, with market leader Fitbit selling 4.4m units. According to IDC, Apple debuted in second place in Q2 2015 with shipments of 3.6 million units-- in the smart watch category. Even fashionista Ralph Lauren feels compelled to present their take on wearables-- the PoloTech, a "smart" fitness shirt. The one trend you can be assured of is that mobile tech (it’s with you always, almost a part of you) will remain very much a business of fashion, design and quick change. The instruments of “selfies” do reflect how much of the consumer’s identity is invested in with his/her mobile technology. www.ifa-international.org IFA International • Friday 4 th September 2015 33