China Consumer Electronics Report Q2 2015
BMI View: The outlook for consumer electronics spending growth in China is strong over the medium term as incomes continue to grow and vendors tap the relatively low penetration in key device categories. An additional boost is the package of economic and social reforms announced by the government in late 2013 should boost consumption, which had been affected to some extent by the cessation of government subsidies in 2013. We forecast the market value will grow by 3.1% in 2015 and we expect growth momentum will be maintained over the medium term with a CAGR of 3.9% forecast for 2015-2019. As incomes rise in China, consumers will spend an increasing proportion on consumer electronics devices, a trend which will be amplified by declining prices for tablets, TVs and smartphones.
Headline Expenditure Projections
Computer hardware sales: USD78.3bn in 2014 to USD81.7bn in 2015, +4.3% in US dollar terms. After contracting in 2014 we expect tablets to grow in volume terms in 2015, but it is notebook sales that will account for the largest share of the overall market.
AV sales: USD31.0bn in 2014 to USD31.5bn in 2015, +1.4% in US dollar terms. The TV market is saturated and a trend of price erosion is limiting value growth, but there is significant potential in the games console market following the removal of the 13-year ban on the sale of such devices in China.
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