9 June 2015
Surge in Online Sales of Electronics and Electrical Appliances in China
- Photo: Online shopping plays a significant role in the mainland consumer market (1)
- Photo: Online shopping plays a significant role in the mainland consumer market (2)
- Chart:Place of Latest Purchase of Consumer Electronics & Electrical Appliances_Audio-visual Products
- Chart: Wearable_Connected Items
- Chart: Small Kitchen Appliances
- Table: Reasons for Shopping at Physical Stores
- Table: Reasons for Shopping Online
- Photo: Some consumers said that in future they might try cross-border online shopping.
China is the largest producer of electronics and electrical appliances in the world, as well as a leading consumer market for such products. As online shopping is fast becoming a global norm, it is no surprise that it also plays a significant role in the mainland consumer market. In particular, online shopping has gradually emerged as one of the important channels for consumer purchases of electronics and electrical appliances.
Rise of Online Shopping
The Hong Kong Trade Development Council (HKTDC) recently conducted a questionnaire-based survey with regard to the consumer market in eight mainland cities.
The survey found that about 20% of middle-class consumers used online platforms in their latest purchase of consumer electronics as well as small electrical appliances, with the majority conducting their online shopping via taobao.com and jd.com, the mainland’s two largest e-commerce platforms. However, it is worth noting that about 80% of consumers currently still buy such products at bricks-and-mortar stores, including dedicated counters at hypermarkets, specialty stores in shopping malls and special counters in department stores.
When buying different products, more consumers purchase wearable/connected items via online platforms (22%) and at independent specialty stores (12%). But in buying audio-visual products, only 15% make purchases via online platforms and 5% would do so at independent specialty stores. On the other hand, consumers mainly purchase small kitchen appliances at dedicated counters at hypermarkets (35%) and specialty stores in shopping malls (18%). This shows that consumers tend to use different shopping channels for buying different products.
The main reasons given by consumers for shopping at bricks-and-mortar stores include good after-sales service, the availability of a wide range of choices allowing them to pick from among different brands, styles, grades and price points, reasonable prices, good word-of-mouth and reputation of the shop and convenient location.
Among consumers whose latest purchase of such products was made online, the main reasons given by them for doing so were: more choices available online, convenient online payment tool, and online prices are normally lower than those at physical stores. Some respondents pointed out that online shops offer more promotional initiatives during festivals such as Singles’ Day, and that online shopping offers them the convenience of shopping without leaving home.
Cross-border Online Shopping
In the meantime, about one third of the respondents said that in future they might try cross-border online shopping for audio-visual products (32%) and wearable/ connected items (33%) via foreign websites (including Hong Kong websites). But only about one-fourth would consider the same for small electrical appliances. The reasons given by consumers who indicated that they might try cross-border online shopping are: possibility of getting latest products within a shorter time, more product choices, and making purchases on foreign websites is the trend.
Still, a higher share of the respondents said they would not consider cross-border online shopping at present. The main reasons given were: they are not familiar with foreign websites and are wary of after-sales service; physical stores and websites on the mainland already offer a wide range of choices, so they do not see a need to do cross-border online shopping; some are wary of the higher prices of import goods; and online shopping on foreign websites involves higher freight charges, longer delivery time and more cumbersome customs clearance procedures.
In sum, amid the surge in online sales in the globe, the significance of online channels should not be overlooked by Hong Kong companies wishing to tap the mainland market. But it is worth noting that when consumers undertake online shopping activities, they typically favour domestic mainland online platforms, with cross-border online shopping only accounting for a relatively small percentage of the current market share. As such, Hong Kong companies wishing to make use of the Internet to access the mainland market may need to rely on the mainland’s proprietary online platforms to effectively capitalise on business opportunities. Also, a large proportion of consumers currently still shop at bricks-and-mortar stores, such as dedicated counters and specialty stores. With this in mind, Hong Kong companies looking to develop their mainland market share are advised to strike an appropriate balance between online and offline channels.
(For more details, please see HKTDC Research reports: “China’s Electronics Market: A Consumer Survey of Audio-Visual and Wearable/Connected Items” and “China’s Small Electrical Appliances Market: A Consumer Survey”)
 The HKTDC recently conducted a questionnaire-based survey with regard to the mainland consumer market. The survey focused on eight mainland cities and was carried out between December 2014 and the end of January 2015. The eight cities covered were - Beijing, Shanghai, Guangzhou, Wuhan, Chengdu, Shenyang, Nanjing and Qingdao. A total of 1,621 middle- to upper-class consumers were surveyed. For more details, please see HKTDC Research reports: “China’s Electronics Market: A Consumer Survey of Audio-Visual and Wearable/Connected Items” and “China’s Small Electrical Appliances Market: A Consumer Survey”
 In this article, consumer electronics means (i) audio-visual products; and (ii) wearable/connected items.