Yi Ma, CE China’s product manager responsible for marketing, retail
partnerships and conference programs, explores the dynamics in the ever-evolving Chinese consumer marketplace in this Q&A with Ivan Zou, Director of Category Management for CE and Home Appliances at Alibaba.com
Yi Ma, Product Manager CE China: How has the global pandemic affected the landscape for the consumer electronics (CE) and home appliances (HA) categories? And what factors do you think will continue to affect CE and appliances retailing in the world, for the near future and for the long-term future?
Ivan Zou, Director of Category Management for CE and Home Appliances, Alibaba.com:
I want to use the following three key words to describe the current global CE and appliances landscape.
The first key word is China: Approximately 90 percent CE products and 70 percent HA products are manufactured in China. At the same time, China is the largest consumer market of CE and HA products. Over the past five years, some Chinese brands have become leaders in the CE and HA industries –¬ brands such as Xiaomi, Huawei, Haier, Gree, Midea, DJI and Hikvision, across the smartphones, drones, security cameras and home appliance product categories.
The second key word is Smart Technology: Due to technology breakthroughs in the semiconductor and Internet of Things (IoT) areas, more than 80 percent of conventional electronics products are being upgraded to smart devices. On the other hand, barriers in certain categories have disappeared. For example, Huawei has launched laptop products – a category where HP and Dell prevailed. Apple has launched Airpods, moving into a category where Sony and JBL have prevailed.
The third key word is E-commerce – especially cross-border e-commerce: The share of e-commerce sales for CE products has already surpassed 50 percent in both China and North America. For Alibaba.com, as a leading cross-border B2B e-commerce platform, sales in 2020 increased by more than 100 percent, compared with sales in 2019.
Yi Ma: What factors do you think will continue to affect CE and appliance retailing in the world, for the near future and for the long-term future?
Ivan Zou: The pandemic has caused a significant impact on the CE and HA industries, such as the shortage of electronic parts and components materials, the increase in cost for CE and HA products, the offline business shift to online, and the delay in application of 5G technology. However, due to the shift to remote work and virtual learning, the demand for personal computers has increased by 17 percent, overturning the year-over-year sales shrinkage of 10 percent in 2019.
In the coming one to two years, consumers will pay more attention to the health-tracking functions of CE products such as heart rate detection, due to the experience of COVID. More sales will be generated from the e-commerce channel. And remote work will become the norm, so laptops, tablets, computer accessories, small home appliances and energy-saving home appliances will continue to be popular.
Yi Ma: What will be the most popular CE products in the world in 2021?
Ivan Zou: Based on trends observed on Alibaba.com, the most popular CE products will be smartphones, True Wireless Stereo (TWS) earbuds and smart wearable products.
Yi Ma: What are the most popular HA products in the world in 2021?
Ivan Zou: Based on other trends we’ve observed on Alibaba.com, the most popular HA products in 2021 will be air purifiers, small kitchen appliances, vacuum cleaners, refrigerators and freezers. This is mainly driven by two factors: a) consumers will pay more attention to maintaining a healthy home environment; and b) consumers will be spending more time at home.
Yi Ma: What overall factors are behind the increase in CE and appliances sales in the world, and how has that affected the growth in prominence of brands?
Ivan Zou: One factor is newer technologies: Newer technologies improve human life and generate new demand. For example, 4K high-definition products improve the gaming experience, SSD products significantly save time in transferring files, and wireless chargers enable users to get rid of cables.
Another factor is the growth of cross-border ecommerce: Today customers in Africa can directly purchase value-for-the-money products with decent quality from suppliers in China. Fans of PlayStation products in China were able to buy latest PS5 when PS5 was launched in Japan. Regarding the impact to brands, those brands that have unique and cool technology stand to gain more market segment share.