4 June 2007
Market Moving Fast(HKTDC Enterprise, Vol 06,2007)
Hong Kong Electronics Fair (Spring Edition)
The constant need to stay abreast of new technologies and trends also keeps buyers like Edmar Faria coming back to winning exhibitions such as the Hong Kong Electronics Fair (Spring Edition).
The vice president of Miami-based MTT Int'l Corp, which exports consumer electronics such as digital cameras and notebook computers to Brazil and Paraguay, freely admitted that is why he attended the April 14-17 event at the Hong Kong Convention and Exhibition Centre.
"I am concerned about the falling prices and fast-changing technology for electronic products," Faria conceded, noting that a consumer can buy an MP3 or MP4 player today and something new will come out in a month or two.
As a result, buyers have to take advantage of a product for as long as it sells. "Because of the short product cycles, prices are falling," Faria explained. "To cope, we keep searching for new technologies."
He was using his first visit to the Hong Kong Electronics Fair (Spring Edition) to source products for sale. "I am looking for MP3 and MP4 accessories, but I also want learn about international trends and understand where the electronics industry is heading," Faria revealed.
"I want to see if there are products that we can manufacture ourselves with our own brand name and our own logo - if so, we may start to manufacture as well."
Currently, however, the hot items in his markets are notebook computers. "I think the international market is trending towards MP3 and MP4 players, which are popular in the US, Brazil and Paraguay," he explained. "Consumers don't care about design - they care more about memory, which is why MP3 and MP4 players have ever-larger memory capacities."
Faria's observations were shared by Francisco Madrid, import manager/product director of Spain's Taurus Group. "We are focusing on portable audio products, mainly DECT phones, portable audio players and MP3 and MP4 products," he revealed. "I am optimistic about the future of the electronics industry, because electronic products make life so much easier and more comfortable."
Madrid predicted that electronic products related to home automation will be the way forward in the next two or three years. "For example, a mobile phone that allows you to record TV programmes at home even when you are not home," he said.
Taurus, which is "mainly" in the small household appliances business, is ideally positioned to exploit this trend as it currently makes vacuum cleaners, food processors, blenders, washing machines and coffee makers at factories in Spain and Brazil.
"At the same time, we trade electronic products like DECT phones, weather stations, portable audio products, mini-radios, CD players, MP3 and MP4 players, weather stations, alarm clocks and projection clocks," Madrid explained. "We started our electronics business just a few years ago and we want to increase our sales volume and build a better catalogue."
He is making a start by examining the potential of GPS products, which are hot in Spain this year and becoming ever more popular. "We are exploring diversification into GPS," Madrid revealed. "We are going to check if we can obtain the right products, the right features, the right prices, and then we will check if our customers will be interested."
Spain is Taurus' biggest market, but it also sells to Portugal, Brazil, South Africa and India. "Brazil is our fastest-expanding market - it's booming and has tremendous potential," Madrid said. "The country is huge and we have a very good team there."
Taurus sources electronic products mainly from China, though it also has suppliers in Taiwan and Korea. "Prices are increasing all over the world at the moment because of the raw material situation," Madrid observed.
"But in China there are also rising labour costs, a strengthening RMB and high inflation, so it is not so cheap to source there any more and it will become more expensive in the future."
He has attended the Hong Kong Electronics Fair for the past eight years for the simple reason that is an ideal way to help Taurus increase its electronics sales.
"Here you can see new products, new trends and contact many people," Madrid explained, adding that the main thing was to get ideas to improve the company catalogue. "This is a real business fair - you can negotiate, buy and it's all very easy."
Fair neophyte Ilan Cejkinski was equally satisfied with his first visit to the Hong Kong Electronics Fair (Spring Edition), which saw him searching for sound machines like boomboxes, CD players, DVD players, standard players and MP3 players, as well as microwaves and data storage products.
"I want to find trustworthy suppliers and establish long-term partnerships," the chairman of Brazil's Saint Paul's Import & Export Ltda explained. "I have started promising conversations with some suppliers and am completely satisfied with the fair."
His company imports and distributes electronic goods in Brazil, such as audio and video products like MP3, MP4 and standard DVD players, as well as media and data storage products such as CDs, DVDs, flash memories and pen drives. "We distribute mostly to retailers, both big and medium-sized, including Wal-Mart," Cejkinski added.
Currently, Saint Paul's is focusing on developing Brazil's northern and northeastern markets. "Those regions are not as developed," Cejkinski said. "But now the government is making efforts to develop them and new consumers are emerging, so the demand is there for cheaper products."
Hot items in Brazil this year are MP3, MP4 and data storage devices. "The product trend is towards convergence, meaning the integration of multiple functions into one product - for example the iPhone," Cejkinski stated. "Convergence is the future for the international market as well."
That said, his main concern about the industry was environmental. "I think electronics companies must address the issue of environmental product disposal as they develop them," Cejkinski added.
Saint Paul's major source is China, which supplies 60% of its products. "We also import from Taiwan and Hong Kong, and have plans to open our own trading company in Hong Kong, maybe in 2008," Cejkinski concluded.
MP4 and GPS items are equally hot items in Canada, according to Alberta Computer Warehouse director Thomas Cheuk. "We are starting to sell these devices," said Cheuk, whose company imports computer components and accessories for wholesale in Canada, mainly Alberta and British Columbia. "In coming years, I believe the big trend in Canada will be MP3, MP4 and GPS mobile phones."
Overall, he was "very optimistic" about the Canadian market. "On the whole, the industry has efficient control over production costs," Cheuk maintained. "The global market should also be okay as I think the industry will adapt to the short product cycles."
Alberta Computer's main supply source is Taiwan. "It's far from home but prices there are competitive," Cheuk said. "I believe we will work more closely with Asia in the coming years, which will help us in terms of product diversification and business expansion."
However, he is thinking of setting up an office in Hong Kong. "This is the first time we've come sourcing in Hong Kong, where we are able to get in contact with many Chinese mainland suppliers as well," Cheuk noted.
He hoped to meet new suppliers, source new products with potential, find new supply sources and get new ideas. "I am looking for computer components and accessories like keyboards, mice, computer monitors, multimedia speakers, computer cases and power supplies," Cheuk revealed. "This fair is pretty big - I'm impressed with the number of stalls and confident I will find what I want."
Equally impressed was Gustavo Routaboul, industrial director of Argentina's Radio Victoria Fueguina S.A., a manufacturer and importer which was established in 1947.
"I have been to the Hong Kong Electronics Fair about 10 times, including the spring and autumn editions," Routaboul explained. "We plan to increase our market share and expand our product range, and I think this fair will definitely help."
He was looking for audio products, as well as LCD-related products such as monitors and TVs. "We have seen some very interesting audio products - micro components mainly - and have found some suitable suppliers and may place orders later," Routaboul revealed.
It was good to have so many suppliers together in one place, he maintained. "The exhibitors here are very good, the fair is very well-organised and I am very happy with it."
Radio Victoria makes TVs - LCD, plasma and CRT models - air-conditioners and audio mini systems. "Apart from manufacturing, we trade audio products such as boomboxes, micro systems, MP3 and CD players," Routaboul added.
The company works under licence from major international names like Hitachi of Japan, RCA of Thomson, and Kelvinator. "We also have our own HitPlus brand, which consists mainly of audio products such as boomboxes, micro-components, MP3 and CD players and some microwave ovens and appliances," Routaboul noted.
Radio Victoria sells to retailers in Argentina, where the economy is currently "very strong", which in turn encourages consumption. "MP3 players are popular audio products, while LCD-related TVs are also hot," Routaboul remarked.
"I think the trend is moving very fast towards LCD-related products, which will get bigger and bigger, while split-type air-conditioners are very popular and likely to become even more popular."
Routaboul noted that electronic product prices were going down but costs were going up, so margins were narrowing every day. "We are trying to be more efficient in our operation by working with our suppliers to shorten the delivery time and also to reduce our inventory," he explained.
Fellow Argentinean Manuel Miranda was also trying to increase market share for his company Newsan S.A. by better marketing and sourcing. "That's why we are here," he said. "The Hong Kong Electronics Fair enables us to meet existing suppliers as well as look for new ones."
The Newsan business manager was looking at appliances such as air-conditioners and microwaves for his 1,500-worker company, which is 45% owned by Sanyo of Japan.
"We are in the business of consumer electronics, such as TVs, air-conditioners, microwaves, audio products, small appliances, cell phones and computers," Miranda noted, some of which are made by Newsan while others are imported.
Newsan's main supply source is China, both for finished goods and components, while other sources are Brazil, India and Japan. "Our major market is Argentina, where air-conditioners, LCD TVs and MP3s are popular items and these markets are growing fast," Miranda concluded.
TEXT BY LIZA LEE
SOUNDS CERTAIN TO STEAL
Digital audio and video dominated proceedings at Asia's largest electronics fair and looks set to dominate demand during the coming year.
Consumers worldwide still can't get enough of MP3 and MP4 audio and multimedia products, and the trend shows no sign of slowing down in the coming year.
That's the considered opinion of experienced industry observers at the Hong Kong Electronics Fair (Spring Edition), held at the Hong Kong Convention and Exhibition Centre from April 14-17.
"MP3 and MP4 are the fastest-growing consumer electronics categories," maintained Tom Dudderidge, managing director of UK-based Disruptive Group.
He should know as MP3s and MP4s are Disruptive's major product categories, along with iPod-related products that include speaker systems, headphones, remote controls, AC chargers and cables and FM transmitters.
Disruptive took active steps to capitalise on this demand by establishing Asian subsidiary Disruptive China in 2006 to specialise in providing consumer electronics solutions to Western companies.
The new company seeks to combine Western market awareness with its manufacturing and procurement expertise in China by focusing on product development and sourcing for European retailers.
Its competitively-priced range of iPod accessories, which can be sold under Disruptive's iLab brand or as an OEM solution, attracted buyers from Europe, the Middle East, Australia and New Zealand at the Hong Kong show.
"Buyers have been telling us that we're giving them all the advantages of sourcing in China and taking away the risks," Dudderidge said. "It's the best of both worlds."
Dudderidge predicted Russia would be a key market of the future. "The retail revolution just happened there - they have lot of money and aspirations," he observed.
A first-time exhibitor at the Hong Kong Electronics Fair (Spring Edition), Disruptive also exhibits at fairs in the US and Europe. "The Hong Kong show is probably the best for Disruptive China because customers are looking to buy direct from China, so it's a good match," Dudderidge admitted, adding that the company plans to exhibit at the fair's autumn edition to be held from October 13-16 this year.
California-based dreamGEAR is similarly dedicated to providing the latest in design and performance in video game accessories and consumer electronics.
Its iSound plasma speaker (US$65 FOB US) featuring a built-in electromagnetic light show that reacts to the beat of music from an MP3 player was a hit, according to the five-year-old company's vice president of sales Moris Mirzadeh. "We've had it in all the major retailers and specialty stores in the US for the past year," he added.
Another product attracting a lot of attention was the company's iSound Audio Vault (US$15 FOB US), a protective carrying case for MP3 players that also features two high-quality speakers for great stereo sound on the go. "The market is growing for MP3 and MP4 players - it's just the beginning of what's ahead," he says.
The company plans to start manufacturing its own high-end MP3 and MP4 players which have recording capability, a calendar and SD cards for transferring movies or songs instead of flash memory.
Mirzadeh maintained that buyers have liked dreamGEAR's exhibits. "We've had retailers from Radio Shack to Sharper Image and buyers from South America, the UAE and the US, but our best potential market is still the US," he averred.
Mirzadeh added that the best thing about the Hong Kong Electronics Fair was that it enabled dreamGEAR to reach customers from all over the world. "Twenty-five per cent of our annual orders come from this fair, though we also exhibit at the Consumer Electronics Show in Las Vegas and CeBit in Germany," Mirzadeh said. "We'll come back to Hong Kong next year with a bigger booth, maybe twice the size."
Local Hong Kong companies such as MP3 manufacturer R. Stone Ltd, which seeks to combine Bluetooth and cell phone technology for a seamless world of music and communication, were equally upbeat about future prospects.
"We think the future for MP3 players looks good," manager Rita Tong enthused. "The market in Hong Kong is mature but in many overseas countries MP3s are new, so we see sales growing - especially because of Bluetooth technology."
R. Stone's colourful egg-shaped Sync3 Bluetooth Stereo MP3 headset (US$55 FOB Hong Kong) is aimed at today's fashion-conscious youth market.
"The auto-switchover function answers calls wirelessly when the user is listening to an MP3 player and receives a phone call," Tong explained. "This is our first MP3 player and we think it's going to be very popular."
Another new product from R. Stone - the Vibe3 Stereo Mobile Hearing Assistant (US$80 FOB Hong Kong) - is based on bone-conduction technology.
The headset, which rests on the skull and provides clear ambient sound without the need for earphones or ear buds, also employs Bluetooth technology to switch automatically from music to cell phone calls.
R. Stone also makes chargers, GPS systems and headsets and exports its products mainly to Europe and the US. "This is our fourth time at the fair," Tong revealed, adding that a lot of overseas customers attend the Hong Kong Electronics Fair. "The traffic has been very satisfying and the customer quality makes us very happy."
Taking a slightly different approach, iPod speaker, mobile TV and tablet DVD player manufacturer Apollo Worldwide Ltd launched its first digital photo frame under its NEXTBASE brand.
The unit features an 8-inch screen, high picture quality and a sturdy retractable and adjustable stand. "One of the selling points is that the frame is interchangeable," explained corporate marketing manager Evon Chow. "The user can buy whatever frame they like and put it on top of the existing one."
The 10-year-old, Hong Kong-based company hopes its low-to-medium priced digital photo frames will account for 5%-10% of orders this year. "We plan to add 2-3 more models with extra functions, such as a clock and a calendar," Chow revealed.
He said that Apollo Worldwide had seen "mostly European buyers" at the fair. "We're looking for distributors from Italy and France and we've been able to meet those buyers as well as some buyers from India."
Chow maintained that the main benefit of the Hong Kong Electronics Fair was that it enabled Apollo Worldwide to meet new buyers and show its products.
"We've been exhibiting for the past 4-5 years and it has allowed us to meet our internal sales targets for new customers in the three months after the fair," Chow remarked.
"We exhibit at the China Sourcing Show and the Consumer Electronics Show in Las Vegas and IFA in Germany - the Hong Kong show and IFA are the best."
Similarly convinced of the value of the Hong Kong Electronics Fair was first-time exhibitor Shenzhen Elephant Technology Development Co Ltd. "The fair has a long history and it's become a brand itself," declared Tony Wang, president of the seven-year-old mainland Chinese firm, adding that it is a "big opportunity" to meet buyers. "This fair is the best and it's our first choice - maybe later we might try other fairs."
Shenzhen Elephant was displaying its Colour Field Series of digital photo frames, which feature a rubber border, rounded corners and a protective acrylic cover over the screen.
"The acrylic cover protects the screen, the rubber protects furniture from being scratched and children won't hurt themselves with the rounded corners," explained Wang, whose firm also produces MP4 players.
The frames, which can be ordered in any colour or colour combination and add a fashionably decorative element to home, office, hotel and coffee or wine bar, are popular in the US and Europe.
"Our sales of photo frames have gone up recently and we think they'll increase even more," Wang predicted. "Digital photo frames were a gift item, but now they've become more of a standard item in the home."
Also focusing on digital photo frames was G B Electronics Co of Shenzhen, China, which was promoting an oval digital photo frame measuring 45.4x54.2x20.2mm with a 1.1-inch screen, plus voice recorder.
The three-year-old company showed a comprehensive range of 13 basic to full function models. "We have 10 engineers in our factory who can design two new photo frame models each month," claimed sales manager Jerry Chen.
He said G B's main markets are the UK and Italy, though the company also exports to France, Germany and Poland. "South America is getting better, and we'd like to sell more in China if possible," Chen added.
Added features such as Bluetooth, TV capabilities and screen sizes up to 15 inches were among his forecasts for future digital photo frames. "The market will become bigger but also more difficult as the competition grows," Chen predicted.
Similarly positive about future prospects was 18-year-old Yusan Industries Ltd, which manufactures MP3 players, boom boxes, micro systems and Internet radios and is known for its slim, hi-tech designs.
Spokeswoman Linna Yiu said buyers were impressed by the company's sophisticated-looking products. "We had a lot of Europeans stop by our booth as well as Russians and South Americans," she explained, adding that Europe and Russia were Yusan's best overseas markets. "Most were looking for new products that had a lot of functions."
The new Bluetooth MP4 player that was the firm's most popular item certainly met their needs as it also included an MP3 player, FM tuner, voice recorder and a clock among its functions.
Yusan has exhibited at the Hong Kong Electronics Fair since the company was first launched. "It's a way for us to let customers know what new products we have, to get more new customers and to check on what the new trends are," Yiu said. "This is the only fair we are currently exhibiting at and we exhibit at both the spring and autumn editions."
TEXT BY ANDREA PAWLYNA
RECORD ATTENDANCE RECORDED
This year's Hong Kong Electronics Fair (Spring Edition) and International ICT Expo at the Hong Kong Convention and Exhibition Centre set a new record with nearly 3,000 exhibitors.
The Spring Electronics Fair from April 14-17 featured:
- 2,406 exhibitors - up nearly 7% from last year
- first-time participation from Belgium, the Czech Republic, Finland, India, Ireland and the UK
- a total of 576 International ICT Expo exhibitors - up nearly nine per cent over last year - with new exhibitors Denmark, Germany, Italy and Japan
- more than 51,000 buyers - mainly from the Chinese mainland, the US, Taiwan, Korea, Japan, Australia, Germany, India, the UK and Singapore - visited the fair
- numbers of buyers from outside Hong Kong increased by 4%
The record attendance reflects the buoyant outlook for an industry that accounts for nearly 50% of Hong Kong's total exports and which surged 14% to US$156bn last year.
Little wonder the fairs attracted 25,000 registered buyers and 137 buying missions with 3,000 companies, including 5,500 new buyers from such well-known chain stores as Breville, Sharper Image, Karstadt Quelle GmbH, Carrefour and Autobacs.
Two new zones at Expo Drive Hall met this increased demand for digital electronics and home automation products: Home Tech offered a wide range of intelligent home appliances, while Vision & Sound featured home theatre and entertainment systems.
Brand-name collections were displayed in an elegant setting at the Hall of Fame, while the Lighting Section spotlighted the latest lighting design and technology.
Fair highlights included the Hong Kong Electronics Parts Procurement Square, where top Japanese electronics companies Lauda, RB Controls and Tescom met potential suppliers.
The Metal Parts and Components Pavilion showcased a wide variety of metal components from 16 Hong Kong Metals Manufacturing Association companies.
Popular exhibits included digital imaging, electronic manufacturing services, health-care electronics, multimedia, office automation and equipment, personal electronics, security products, telecommunication products and trade services.
Running alongside the Hong Kong Electronics Fair, International ICT Expo brought together the latest software applications, information technology and computer solutions.
ICT Expo was divided into eight zones:
- Enterprise Solutions
- E-Logistics & Retail Technologies
- Digital Living & Multimedia
- Home-grown Innovations
- IT Outsourcing
- Linux & Open Source
- Network & Mobility
- Trade-related Services
Industry conferences, seminars and forums covered such essential industry topics as intellectual property rights, the Russian consumer electronics market, hazardous waste management, mobile business and marketing, e-public services development, IT outsourcing, digital trade and transportation networks, near-field communication (NFC) and "green" ICT.
SURE TO SHINE
The electronics and ICT markets are expected to shine this year, according to an independent survey released by the Hong Kong Trade Development Council (TDC).
Fuelled by popular items, including AV products, home appliances, IT, multimedia, digital imaging and telecom products, industry growth worldwide is expected to reach 12%, with retail growth in emerging markets pegged at 16%.
Traders pointed to the Global Positioning System (GPS) and Digital Multimedia Broadcasting (DMB) as the hottest new areas in personal electronics.
Networks and mobility were seen as the information and communication technology industry's most promising categories for future growth.
More than 200 exhibitors and 400 buyers attending the 4th Hong Kong Electronics Fair (Spring Edition) and its sister event, the International ICT Expo, were interviewed for the survey.