Digital Trends - China - April 2019

OVERVIEW
What you need to know
Covered in this Report
Sub-group definitions
EXECUTIVE SUMMARY
The consumer
Living in a hyper-connected era is around the corner
Figure 1: Ownership of digital products, 2015-2018
Figure 2: Usage frequency of different digital products, December 2018
Two key expansion strategies for smartphones: to higher-end market and to less developed areas
Tablets enjoy robust growth among young consumers and parents
Smart home is expanding fast, but be careful not to be white elephants
Wearable and VR products experience slow expansion but are on the way to gaining more heavy users
Rising favourability towards domestic brands
Figure 3: Top seven favourite brands and their products, December 2018
Consumers prefer to dominate the purchase decision of digital products
Figure 4: Decision-makers of different types of digital products, December 2018
Ergonomic design is a nice-to-have after achieving functional upgrades
Figure 5: Motivations to buy digital products, December 2018
Stereotype of brands in mind limits consumers’ acceptability towards crossover products
Figure 6: Comparison of brands’ crossover products related to their core business, December 2018
What we think
ISSUES AND INSIGHTS
Achieve market expansion by taking corporate social responsibilities
The facts
The implications
Move to kids market to avoid being replaced
The facts
The implications
Figure 7: Marketing images related to kids of Huawei’s tablet, MediaPad M5
Figure 8: Marketing image of The ONE piano
Slow down the pace of brand crossover
The facts
The implications
THE CONSUMER – WHAT YOU NEED TO KNOW
Consumers are ready for IoT era
Stimulate sales by targeting specialised markets
Pursuing upgraded functions is the main reason to buy digital products
Consumers are not so convinced by crossover products
OWNERSHIP OF DIGITAL PRODUCTS
Smartphone, laptop/desktop and camera markets recovered from the decline in 2017
Figure 9: Ownership of smartphones, laptops/desktops and digital/video cameras, 2015-2018
Almost all have a smartphone
Tablets have witnessed robust growth since 2017
Figure 10: Ownership rate of tablets, 2015-2018
The penetration of tablets among old consumers reached a peak
Figure 11: Ownership of tablets, by age, 2017-2018
Tablets have successfully caught parents’ attention
Figure 12: Ownership of tablets, by family status, 2017-2018
Can smart TVs/projectors be the control system of a smart home system?
Figure 13: Ownership of smart home devices, 2015-2018
Young consumers are the key group to target for smart home market
Figure 14: Ownership of smart home devices, by age, December 2018
Smart TVs/projectors are more favoured beyond tier one cities
Figure 15: Ownership of smart TVs/projectors, by city tier, December 2018
The interest in wearables has faded
Figure 16: Ownership of wearable products, 2016 and 2018
The era of VR has not yet arrived
E-readers and games consoles markets grow slowly
Figure 17: Ownership of e-readers and games consoles, 2015-2018
Male consumers didn’t buy into the innovations of e-readers
Figure 18: Ownership of e-readers, by gender, 2015-2018
Consumers restart to buy more types of digital products
Figure 19: The number of digital products consumers own, 2015-2018
TRENDS IN PRODUCT USAGE
Addiction to smartphones will grow even higher
Figure 20: Comparison of products’ ownership rate and usage frequency (% of using more often), December 2018
Smart home appliances and wearable products stand out from emerging tech products
Raise young consumers’ usage intention towards wearables by adding more complicated health data-tracking functions
Be prepared for the competition of VR products
VR products start to gain more attention in lower tier cities
Figure 21: Ownership and usage frequency (% of using more often) of VR products, by city tier, December 2018
Smart TV/projector market is not as so promising as expected
Losers: e-readers and games consoles
Unavoidable addiction to be online
Figure 22: Usage trends (% of using more often) of selected digital products, 2015-2018
FAVOURITE BRANDS AND PRODUCTS
Huawei is becoming the national brand of smartphones
Figure 23: Top seven favourite brands and their products, December 2018
Xiaomi wins as an ecosystem provider
Cameras surpass laptops and tablets to have the second best reputation
Figure 24: Percentage of favourite products mentioned by consumers, December 2018
Cost-efficient smartphones contribute to the development of the current market
Figure 25: Percentage of consumers who mentioned smartphone as their most satisfied digital product, by income level, December 2018
Smartphone brands ranked behind need to focus on product quality control and provide higher-end ones to cultivate brand reputation
Figure 26: Favourite brands of smartphones mentioned by consumers, December 2018
Apple faces the challenge of losing the next generation
Figure 27: Top four brands of smartphones mentioned by consumers, by age, December 2018
Japanese brands are dominating the camera market
Figure 28: Favourite brands of cameras mentioned by consumers, December 2018
Camera fans are more likely to be owners of niche products
Figure 29: Satisfaction rate of cameras of owners across products, December 2018
Figure 30: Marketing images of Huawei’s 360° camera and Insta360, March 2019
Brands famous for smartphones are trying to gain market share of laptops
Figure 31: Favourite brands of laptops, December 2018
“Android party” is still struggling in tablet market
Figure 32: Favourite brands of tablets, December 2018
DECISION-MAKERS OF DIGITAL PRODUCTS PURCHASE
Personal opinion matters the most when buying digital products
Figure 33: Decision-makers of different types of digital products, December 2018
Men vs women, who are more impulsive when buying digital products?
Figure 34: Percentage of making purchase decision by myself, by gender, December 2018
MOTIVATIONS TO BUY DIGITAL PRODUCTS
Function is the key motivation
Figure 35: Motivations to buy digital products, December 2018
Look and feel of the product have limited influence on consumers’ decision-making
Upgrading is the main reason for new purchase
To be more convenient and unique
Figure 36: TURF analysis of motivations for buying digital products, December 2018
Ergonomic design is a plus when technology hits a ceiling
ATTITUDES TOWARDS CROSSOVER PRODUCTION
Domestic brands need to work hard to gain reputation in health sector
Figure 37: Comparison of brands’ crossover products in health sector, December 2018
Crossover products related to core business are more likely to be accepted by consumers
Figure 38: Comparison of brands’ crossover products related to their core business, December 2018
Manufacturers of electronic devices are not expected to enter food and drink industry
Figure 39: Comparison of brands’ crossover products in food and drink sector, December 2018
Home appliance companies match better with baby market
Figure 40: Comparison of brands’ baby stroller, December 2018
Opportunity for tech companies in outdoor activities?
Figure 41: Comparison of brands’ electric scooter, December 2018
Xiaomi has succeeded in building its loyal consumer base
Figure 42: Supporting rate towards selected crossover products of Xiaomi fans vs non-fans, December 2018
MEET THE MINTROPOLITANS
Not yet to switch off
Figure 43: Comparison of products’ usage frequency (% of using more often), by consumer classification, December 2018
Target consumers of games consoles and digital/video cameras might lean to MinTs
MinTs are technology-driven
Figure 44: Motivations to buy digital products, by consumer classification, December 2018
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations