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Show Report(HKTDC Electronic Components & Parts, Vol 01,2001)

Hong Kong Electronic Components & Parts

Vol 1 2001

Show Report

New Technology Nurtures Wealth Of Opportunities At Electronics Event

What's Hot? What's Not? Market Experts Hold Answers

New Technology Nurtures Wealth Of Opportunities At Electronics Event

RECORD numbers of international buyers, seeking everything from IT gadgets to enhanced components, flocked to the 20th Hong Kong Electronics Fair and concurrent events at the Hong Kong Convention and Exhibition Centre (HKCEC) from 11-14 October.

More than 44,000 visitors, including 22,847 from overseas, attended the annual electronics fair, the largest of its kind in Asia, organized by the Hong Kong Trade Development Council (TDC).

"The new age of wired, wireless and broadband telecoms creates immense opportunities for suppliers and their customers alike," said TDC senior exhibitions manager Anne Chick.

According to independent auditors, the Society of the Voluntary Control of Fair and Exhibition Statistics (FKM), from Germany, total attendance surged 12% on the 1999 fair, with overseas attendance up 19%. The largest number of overseas visitors came from Asia (12,708, up 25%), followed by Europe (5,040, up 10%) and North America (2,203, up 17%).

Concurrent fairs and seminars helped to attract the impressive crowds. TDC and Messe M俲chen Int'l co-organized electronicAsia and LaserAsia 2000, while TDC alone organized the Hong Kong International Lighting Fair. Altogether, more than 2,300 exhibitors, including 1,538 in the Hong Kong Electronics Fair, filled the HKCEC.

electronicAsia, a concurrent fair offering components and parts, related equipment, products and services, attracted 22,521 visitors to see displays from 460 exhibitors. Nearly half those visitors and two-thirds of the exhibitors came from overseas.

Belgian buyer Patrick Van de Sande said electronicAsia had improved. "There's much more to choose from, the quality is better and there are a lot more people. China's products have become more impressive too," he said, while searching for LCD touch panels, relays, connectors and cables.

In electronicAsia, group pavilions represented the Chinese mainland, Germany, Taiwan, the UK and the US. As a value-added feature, LaserAsia 2000 covered laser technology and technical optics.

In the Hong Kong International Lighting Fair, 329 exhibitors displayed new lighting products and technology.

"The Hong Kong Electronics Fair and related events have grown beyond being a Hong Kong showcase to become a meeting place for electronics professionals from all over the world," said TDC Electronics/ Electrical Appliances Industry Advisory Committee chairman Allan Wong.

A survey, commissioned by TDC and conducted on-site by AC Nielsen, showed that the most-popular electronics products included those applying digital and information technology. Telecom items and MP3 players were widely pursued.

Hong Kong and overseas exhibitors presented numerous creations using new technology and applying previous technology in new ways. Among the innovations were: a GSM cellular phone billed as the world's lightest; portable MP3 players capable of playing SVCD; DVD TV; multi-media plasma TV, entering its second generation; Bluetooth appliances; Brain PDA, cable-free weather stations and devices to help the hearing-impaired appreciate music.

The new-tech trend also dominated in the Frontiers of Brain Power, a special section of the electronics fair presenting various university projects on wireless-telecom and mobile-commerce solutions, thereby linking research to commercial application.

For the first time, there was a special e-commerce section. "According to industry forecasts, all consumer electronics manufacturers will be on the Internet in five years' time. Most Hong Kong manufacturers already are," Allan Wong said.

Hong Kong-based, B2B e-commerce firm, Bizipoint.com, is only one year old. "This electronics fair gave us valuable exposure to buyers from other parts of the world. We could talk to people and find out what they are looking for," said the company's vice-president for corporate development Dora Hung.

Many visitors to the Bizipoint.com stand were from India, Pakistan and Bangladesh, as well as Europe, the US and Middle East. "It was a good mix," Hung said.

Bizipoint.com has participated in other exhibitions focusing more on IT, but to which 60% of the visitors came from the general public rather than other businesses. "This was more beneficial," Hung said.

Among the first-time fair visitors was Aroma Housewares Co sales manager Mel Pethel, from San Diego, California, who welcomed such an ideal opportunity to pursue the world's best deals.

"To come here and meet all the people who put our name on products is interesting. Fairs in the US deal with finished products and usually sell to retail, but here you can actually talk to the manufacturers themselves. This also has been very helpful because there are so many products. Five different vendors may produce the same item, so you can look around for the best quality, value and price point," Pethel said.

Michael Creek, representing Creek Audio in the United Kingdom, combined his trip to Hong Kong with factory visits on the Chinese mainland. "I am looking to buy OEM products in the home-entertainment category," he said. "Everything new in the industry is here, and I like the way it is presented."

Some buyers said they saw products at the Hong Kong Electronics Fair they could not find at events elsewhere. Thomas Wildberger, from Germany, has attended since the late 1980s. "I come to see wireless communications products, and here I can meet a lot of suppliers at one time, not just from Hong Kong, but from Taiwan, Korea and other places, too. Some of the products here you just cannot get elsewhere. The prices are good too."

According to Elst Co Ltd representative Kovalchuk Sergey, from Russia, "I've found what I was looking for ?telecoms products and MP3/CD players. We've made some important contacts with manufacturers while seeing a wide range of prices and qualities."

TDC chairman Peter Woo officiated at the opening ceremony in the first official function since assuming his high-profile, trade-promotion post. On developing TDC's trade fairs, he said: "The key is to constantly increase their critical mass and move them up to the next level; to facilitate buyers and sellers; and to make their jobs easier in a user-friendly setting."

Altogether, 771 exhibitors and 1,066 buyers participated in the AC Nielsen survey. More than 75% of them believe the market outlook in 2001 will be better than in 2000.

One reason for such optimism is China's pending entry to the World Trade Organization. Most respondents expect to conduct more business on the Chinese mainland.

The buyers surveyed cited numerous reasons for sourcing electronics-related products via Hong Kong. These included attractive pricing and high quality, strong supporting industries, solid infrastructure, flexibility in meeting customers' needs, adoption of IT in business linkage, willingness to take small orders and short delivery times.

Most fair participants are already looking to the future. The 21st Hong Kong Electronics Fair, again with numerous concurrent events, is scheduled for 15-18 October, 2001.

What's Hot? What's Not? Market Experts Hold Answers

MOBILE phones and DVD are the growth areas set to explode, according to experts from the US, UK and Germany addressing industry traders in an Electronics Market Seminar at the Hong Kong Convention and Exhibition Centre on 11 October.

Consumers in all three countries are major buyers of new products created by manufacturers based in Hong Kong with production facilities on the Chinese mainland. Dynamics in these markets generated brisk discussion during the seminar, held during the 20th Hong Kong Electronics Fair and concurrent events like electronicAsia and LaserAsia 2000.

Although the US electronics market grew steadily in the past five years, some sectors, including colour TV, home radio and corded phones, became saturated, said Janet Pinkerton, editor-in-chief of Dealerscope, a monthly trade magazine covering consumer electronics.

Pinkerton provided an overview of the US retail landscape. Charles Ward, managing editor of ERT Weekly and Electrical Retailing Magazine, highlighted developments in the UK. In addition, technical trade journalist and industry consultant Peter Weber spoke on the importance of the large German market.

Computers with CD-ROM, separate-component audio systems, home CD players, personal computers and modems or fax/modems are also hot in the US.

Price erosion is a constant market force, and suppliers should not underestimate it. "In the first eight months of 2000 (versus the same period in 1999), according to NPD Intelect data, unit sales increased 14.5%, but US dollar sales rose only 6.8%," Pinkerton said.

Despite the hype of electronic retailing, location-centric retail remains dominant. "Consumers are buying into the idea of electronic retailing. They just don't have time to visit stores. However, the volume drivers are still multi-regional electronics and appliance stores."

Pinkerton listed the lessons potential suppliers must learn before succeeding in the US. "If your company fails to deliver what it promises, don't expect loyalty from US retailers," she said.
Retailers want products with services attached, accessories are hot and brand doesn't always matter. "Another lesson is that inventory can kill, so supply-chain control is mandatory. Also, US buying groups are learning to use the Internet to stay in closer communication with retail members and vendor partners to respond more quickly to market forces."

In the UK, consumer electronics and domestic appliances have enjoyed record sales at the expense of declining retail prices. Digital technology dramatically affects all production, with new-tech products leading the way.

"The developments surrounding colour television are foremost. There is a major change in viewing habits with the introduction of digital broadcasting," Ward said.

Specialist retailers account for the lion's share of spending, more than 76%. "In the next five years, the biggest potential impact will be from electronic-based sales of Interactive TV, especially for games and software, via the Internet," he added.

With 82 million people, Germany is Europe's biggest market. As the EU expands to Eastern Europe, Germany's position will strengthen.

"We still have a strong base of traditional consumer electronics retailers," Weber said. Most are members of marketing and buying groups, through which suppliers can approach retailers.

Importers want new items and brands, but suppliers should avoid pitfalls. "There are already too many brands, and the trend is to reduce choice. Having too many products creates inventory problems. For newcomers, access is impossible without pre-marketing. Brand awareness, product awareness and personal contacts are necessary. Unlike in the US, it is not strictly about price. Unknown companies receive no business."

Weber suggested making contacts by attending fairs, finding a representative or opening an office and undertaking basic marketing activities, like printing German literature.

"Come to Germany with production-ready samples, not mock-ups or ideas," he said, agreeing with Pinkerton on the need to listen to market expectations and respond accordingly.