Going global: strategic implications for Chinese brands

China is a global powerhouse for consumer electronics and home appliances. As the ‘world’s factory’, China has massive electronic manufacturing and exporting capability across a wide range of electronic products including smartphones, computers, televisions, consumer appliances and electronic components.

China consumer electronics and home appliances market overview

Factors nurturing the growth

The growth of the CEH market is primarily fueled by macro-economic as well as technological advancements. The growing preference for online channels is providing customers with enhanced convenience and a broader product choice. Additionally, the surge in disposable incomes is leading to increased spending on high-tech devices. The rapid evolution of products integrated with AI, Internet of Things (IoT) and 5G is captivating consumers attention.

Major trends in the market

The consumer electronics industry in China is undergoing a transformative phase, marked by several notable trends. Trends in 5G, IoT, smart devices, AI, personalization, and sustainability are transforming the industry, supported by the demand for new innovative products from Chinese consumers.

Key trends in Chinese consumer electronics market

Global CEH market opportunity

To gain a recognizable position swiftly, Chinese brands continue to customize their product strategies based on the specific country and segment in which they operate. Leading smartphone manufacturers leverage competitive technological features and efficient local distribution networks to gain a dominant market position in the country they aim to expand operations. To build consumer trust and increase product penetration, Chinese brands are also adjusting customer-oriented features such as extending the smart fridges warranty from 10 to 25 years in Europe.

Global opportunity for China consumer electronics and home appliances market

CEH market segmentation

As each CEH market segment has its own characteristics and exhibits varied market dynamics and growth potential, understanding the key growth drivers and factors driving them are crucial. Even the growth patterns of each segment are distinct in nature which would narrate a unique growth story.

Industry best practices

As Chinese CE products continue to exhibit strong demand globally, there remains huge opportunity for growth. It is of vital importance to understand how successfully Chinese companies overcame the domestic growth dynamics and established their local presence before exploring their potential for scaling the operations globally. To achieve the same, they undertook a range of strategic initiatives including collaboration with local vendors, exploring e-commerce channels in local countries, acquiring niche companies to expand their presence, making strategic product enhancements to fit the specific customer base and more. Their demonstrated growth trajectory could inspire emerging companies with aims to grow globally.

From domestic brand building to localization lead home appliance companies to go global

EY solutions

EY provides various professional services with rich industry experience & solutions in assisting enterprises in realizing their internationalization strategies, including:

• Tax solutions for overseas investment
• Tax efficient holding and financing structure
• Global human resource (HR) regulatory and compliance 
• Customer data protection and integrated channel operation

Thanks to Megha Arora and Neha Goel from EY Knowledge Team for their contributions to this article.