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International E-Appeal: New CEA Research Shows Strong Opportunity for International Tech Manufacturers Among Chinese Consumers

Arlington, VA – May 28, 2015 – 
Although eight in ten Chinese now own smartphones, televisions or wearable devices from domestic manufacturers, almost two-thirds (63 percent) say they prefer international brands for this technology, according to new research from the Consumer Electronics Association (CEA)®. The study, Chinese Consumers: Technology Brand Sentiment and Path to Purchase, also shows significant sales opportunities for international tech companies, as roughly two-thirds of Chinese consumers say they would consider buying brands from the United States (67 percent), Europe (66 percent) and South Korea (62 percent) rather than brands from China (41 percent).
 
International versus Domestic Technology Brands
           
The CEA research shows price largely drives brand preference, with international technology brands highly preferred as household incomes rise. A large majority of Chinese making RMB 20,000 (approx. 3,200 USD) or more per month (76 percent) or between RMB 20,000-10,000 (approx. 1,600 USD) per month (68 percent) prefer international brands. By comparison, 50 percent of Chinese consumers making RMB 10,000 or less per month prefer international tech brands over domestic manufacturers.
 
A key demographic for international tech brands is Chinese in their 30s. According to the CEA study, two-thirds (66 percent) of these consumers are more likely to purchase international tech brands than domestic brands (34 percent). Members of this group are also more likely to identify themselves as “early adopters” (63 percent) and see buying international brands as a means of differentiating themselves from other consumers (54 percent).
 
“Chinese in their 30s are in a ‘sweet spot’ for technology brands,” said Steve Koenig, senior director, market research, CEA. “These consumers are young enough to feel comfortable with technology and old enough to afford it. They’re buying more technology and perceive international brands as a status symbol. Chinese in this demographic want others to view them as cool and popular, which means they’re more likely to buy the latest and most innovative international products.”
 
While some domestic brand buyers see their purchases as patriotic, consumers are equally split as to how their purchase decisions affect the local economy. Six in ten like to buy domestic brands to support the Chinese economy (59 percent) and/or agree buying international brands doesn’t hurt the Chinese economy (58 percent), because many tech brands are manufactured in China.
 
Smartphones, Televisions, Wearables
 
The smartphone market is the most codified among Chinese consumers, with four dominant brands (international and domestic) constituting the “preferred brand” for 83 percent of Chinese. Consumers most value the features (90 percent) when purchasing a smartphone, with battery life (94 percent), memory/storage (93 percent) and screen resolution as the most important features.
 
When it comes to purchasing a television, nine in ten Chinese (91 percent) say features are the most important factor. Topping the list of desirable television features are sound quality (93 percent), screen size (90 percent) and 4K Ultra High-Definition (90 percent). Price (79 percent) and brand (78 percent) of television are less important, but still factors for eight in ten Chinese consumers. Unlike smartphones, however, Chinese consumers are more willing to trade better features and higher quality in a television for a lower price.
 
Sixty-seven percent of Chinese consumers want to use a wearable to achieve fitness goals, but they also would like to use such a device to communicate through text and phone call notifications (56 percent).
 
“There is a lot of room for movement in the wearables marketplace in China,” said Koenig. “Aside from the Apple Watch, consumers don’t know much about wearables. The wearables brands that do rise to the top are better known for their other products, so we see plenty of room for movement in this category.”
 
How Chinese Shop for Tech
 
While the study shows online shopping excels for researching specific product features, two-thirds of Chinese (65 percent) enjoy seeing and physically trying tech products before buying them. In particular, Chinese women (70 percent) appreciate experiencing technology in a retail store before making a purchase. However, almost six in ten (57 percent) of Chinese consumers in their 30s enjoy shopping online as a means of avoiding crowded stores.
 
Chinese consumers also approach purchase decisions differently than Americans. While American consumers tend to focus first on the price of consumer techonology, Chinese consumers prioitize the functionality and user-experience of technology products before evaluating brand and price options.
 
“International tech brands seeking to compete in China should promote their innovation and advanced features to attract consumers,” said Koenig. “Product placement in stores, tiered pricing and designing products specifically for Chinese consumers are worthwhile strategies to compete effectively in this market.”
 
Chinese Consumers: Technology Brand Sentiment and Path to Purchase was designed and formulated by CEA Market Research, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer electronics industry, to examine the Chinese technology marketplace to better understand how Chinese consumers feel about domestic and international brands, and the factors they consider in their purchase decisions for smartphones, televisions and wearables. The survey consists of 3,019 consumers who own or plan to buy either a smartphone, television or wearable device. Additionally, 60 online conversations were conducted to add further dimensions to opinions about domestic and international brands. Please cite any information to the Consumer Electronics Association (CEA)®. The complete study is available for free for CEA member companies at members.CE.org. Non-members may purchase the study for 1,999 USD at the CEA Store.
About the Consumer Technology Assocation

The Consumer Electronics Association (CEA) is the technology trade association representing the $286 billion U.S. consumer electronics industry. More than 2,000 companies enjoy the benefits of CEA membership, including legislative and regulatory advocacy, market research, technical training and education, industry promotion, standards development and the fostering of business and strategic relationships. CEA also owns and produces CES – The Global Stage for Innovation. All profits from CES are reinvested into CEA’s industry services. Find CEA online at CE.org, InnovationMovement.com and through social media.

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