Business Keynote Impacts and Strategies of Chinese

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Business Keynote - Impacts and Strategies of
Chinese New Emerging Asian Brands on the U.S.
CE Market

• Todd Thibodeaux
• VP, Industry Relations
• CEA

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Section 1 Impacts and Strategies of Chinese
New Emerging Asian Companies on the U.S. CE
Market Results were drawn from a
pre-event survey of all registered
attendees. Some 50 individuals participated.
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Average of Products For Sale Sourced from Each
Country
(40 median)
(15)
(20)
(30)
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Similarity of Chinese New Emerging Asian
Companies Compared to the Influx of Japanese
Companies from 1960's and 1970's
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Similarity of Chinese New Emerging Asian
Companies Compared to the Influx of Japanese
Companies from 1960's and 1970's
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Comparison of Chinese Companies Japanese Influx
ALL MFG RET Very similar 19 22 18 Some
differences, some similarities 43 39 55 Very
different 16 13 18 Unsure 22 26 9
MFG Manufacturer, RET Retailer
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Comparison of New Emerging Asian Companies
Japanese Influx
ALL MFG RET Very similar 25 25 33 Some
differences, some similarities 39 31 56 Very
different 7 6 0 Unsure 29 38 11
MFG Manufacturer, RET Retailer
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Comments on Differences Between Chinese vs.
Japanese Influx
Many Chinese brand will be licensed, not owned.
Entities are already large and financially secure
IT product manufacturers. Products derive from
already world-class IT products, and leverage the
digital convergence movement.
The Japanese brands were largely focused on
creating new technology and and/or product
designs, applications. The Chinese brands are
largely focused on making largest volume products
at the lowest possible costs.
Focus on like goods at lower cost. Japanese
brands placed more emphasis on technology
development and new products.
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Comments on Differences Between Chinese vs.
Japanese Influx
Japanese brands were universally thought of as
junk. People today are less persuaded by brand
and relatively more persuaded by value.
Chinese brands are using "Brand Names" consumers
recognize without knowing the product is produced
in China.
The Chinese-made products appear to have an
easier time getting consumers to purchase without
the benefit of well established brand names known
to the U.S. market.
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Comments on Differences Between Chinese vs.
Japanese Influx
The Japanese were more focused on growing their
brands. It appears that the Chinese manufacturers
are more focused on becoming contract
manufacturers for existing brands versus building
their own brand.
Brands were traditionally created in large part
by the core competencies of the supplier. Digital
architecture has by in large commoditized
competencies and venerable brand names are
available for modest licensing arrangements.
They (the Chinese) seem to be better financed and
are willing to spend whatever it takes to gain a
foothold in the market. Very aggressive.
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Ranking of Priorities for Chinese New Emerging
Asian Companies in Entering the U.S. Market
Less Important
Getting more OEM Customers 100 Establish own
brands in U.S. 83 (17) Maximizing profits from
U.S. sales 61 (39) Expanding "in market"
manufacturing 57 (43)
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Ranking of Regional Priorities for Chinese New
Emerging Asian Companies
Less Important
U.S. market 100 Asian market 65 (35) EU
market 58 (42) Rest of the world 37 (63)
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Words to Describe Chinese New Emerging Asian
Products
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Categories Where Companies are Major OEM Players
Chinese Emerging Asian Video displays 70 65 Aud
io components 63 43 Portable audio 67 39 Car
stereo 73 35 In-car entertainment/navigation 60
26 Wireless handsets 63 35 Computer
peripherals 67 48 Personal computers 63 39 Har
d drives and storage 67 35 Accessories 70 26
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Categories Where Companies are Major Brand Players
Chinese Emerging Asian Video displays 40 48 Aud
io components 23 17 Portable audio 23 30 Car
stereo 10 9 In-car entertainment/navigation 3 1
3 Wireless handsets 7 9 Computer
peripherals 27 35 Personal computers 10 17 Har
d drives and storage 13 17 Accessories 17 22
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Categories Where Companies Will be Future Major
Brand Players
Chinese Emerging Asian Video displays 86 43 Aud
io components 38 22 Portable audio 62 48 Car
stereo 34 30 In-car entertainment/navigation 31
30 Wireless handsets 52 35 Computer
peripherals 45 52 Personal computers 41 26 Har
d drives and storage 38 30 Accessories 48 22
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Change from Current to Future Brand Status as
Major Players
Chinese Emerging Asian Video displays 46 -5 Aud
io components 15 5 Portable audio 39 18 Car
stereo 24 21 In-car entertainment/navigation 28
17 Wireless handsets 45 26 Computer
peripherals 18 17 Personal computers 31 9 Hard
drives and storage 25 13 Accessories 31 0
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Strategies Companies Will Employ to Gain Presence
in U.S.
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Strategies of Chinese New Emerging Asian
Companies in Gaining Presence in U.S. Market
ALL MFG RET OEM aggressively, brands
slowly 48 42 60 Brands aggressively,
minimize OEM 28 29 27 OEM and brands
equally 22 26 13 Other strategies 2 3 0

MFG Manufacturer, RET Retailer
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Net Expectations for Success of Different
Strategies to Gain Presence in U.S. Market
Chinese Emerging Asian OEM aggressively,
brands slowly 75 27 Brands aggressively,
minimize OEM 29 33 OEM and brands
equally 100 75
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Expected Distribution Strategies of Chinese New
Emerging Asian Companies in Gaining Presence in
U.S. Market
Emerging All Chinese Asian Deal directly
with retailers 39 44 33 Working mostly
through distributors 26 20 33 Sell brands
with OEM customers 28 32 24 Other
strategies 7 4 10
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Expected Branding Strategies of Chinese New
Emerging Asian Companies in Gaining Presence in
U.S. Market
Emerging All Chinese Asian License
existing brands 31 24 39 Resurrect old
brands 21 24 17 Purchase existing companies
8 4 13 Develop their own brand
names 40 48 30
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of Manufacturers Approached about Licensing
Brands they Currently Own and/or Use
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of Manufacturers Currently Selling Brands they
Sell in the U.S. in the Chinese New Emerging
Asian Markets
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Number of Years Manufacturers Have Been Selling
U.S. Brands in the Chinese and/or New Emerging
Asian Markets
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Expected Challenges Facing Chinese New Emerging
Asian Companies in Gaining a Presence in the U.S.
Market
ALL MFG RET Perceived lower product
quality 38 32 43 Lack of existing marketing
savvy 27 32 22 Costs of building brand in the
U.S. 23 24 22 No challenges, they are
already there 8 8 9 Length of time/commitment
necessary 4 4 4
MFG Manufacturer, RET Retailer
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"Catch-Up" Facing Chinese New Emerging Asian
Companies in Gaining a Presence in the U.S. Market
ALL MFG RET Relationship/brand with
consumers 28 29 27 Building relationships
with resellers 24 21 27 Defining a
brand/marketing strategy 18 17 18 Improving
product quality 18 21 14 Generating buzz
around their products 13 13 13
MFG Manufacturer, RET Retailer
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Section 2 Consumer Acceptance and Attitudes
Towards Unfamiliar Brand Names in the CE
Market Results were drawn from a representative
sample of 1,200 online households
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of Consumers Saying Finding a Familiar Brand
Name is Important When Shopping for Various Items
Type of Adopter
All Early Mid Late Consumer Electronics 62 66
66 55 Clothing 26 31 27 19 Food 39 42 41
34 Cars 68 70 68 69 Appliances 57 57 57
58
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of Consumers Who Have Purchased an Unfamiliar
CE Brand Sometime in the Past
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of Consumers Purchasing an Unfamiliar Brand by
Product Category
Type of Adopter
All Early Mid Late TV 32 38 27 31 DVD
player 40 47 42 31 Wireless
phone [phone] Computer 29 38 24 28 Car
stereo 10 11 11 7 Home stereo 13 11 14 14
Portable music player 14 19 14 10 Digital
camera or camcorder 13 15 12 10
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of Consumers Who Would Feel "Comfortable"
Purchasing a Product with an Unfamiliar Brand
Type of Adopter
All Early Mid Late TV 32 35 30 31 DVD
player 39 44 37 36 Wireless
phone [phone] Computer 19 26 17 10 Car
stereo 32 37 30 32 Home stereo 31 32 30 33
Portable music player 36 41 35 35 Digital
camera or camcorder 24 27 22 26
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Ratio of of Consumers Purchasing an Item
and the of Consumers Comfortable with Making
Such Purchases
Type of Adopter
All Early Mid Late TV 100 109 90 100 DVD
player 103 107 114 86 Wireless
phone [phone] Computer 153 146 141 280
Car stereo 31 30 37 22 Home
stereo 42 34 47 42 Portable music
player 39 46 40 29 Digital camera or
camcorder 54 56 55 38
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of Consumers Saying They Were Satisfied with
the Performance of the Unfamiliar Brand they
Purchased
Type of Adopter
All Early Mid Late Completely
satisfied 31 34 28 31 Mostly
satisfied 47 42 49 47 Some good some
bad 13 12 14 13 Mostly unsatisfied 6 6 7 5
Completely unsatisfied 3 6 2 3
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of Consumers Agreeing with Each Statement
Type of Adopter
All Early Mid Late I'm willing to try an
unfamiliar brand if it has a low
price 31 39 30 28
I'm willing to try an unfamiliar brand if someone
recommends it 59 60 58 58
I'm willing to try an unfamiliar brand if it has
the features I want 61 65 59 59
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of Consumers Agreeing with Each Statement
Type of Adopter
All Early Mid Late High price usually means
high quality 18 21 18 15
A low price for a known brand usually means it's
a good value 42 37 43 42
A low price for an unfamiliar brand means the
product is inferior 13 16 13 11
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of Discount Where Consumer Begins to Consider
an Unknown Brand in the Purchase Decision
Type of Adopter
All Early Mid Late Unfamiliar brand is 10
less 3 4 4 3 Unfamiliar brand is 20 less
16 18 19 13 Unfamiliar brand is 30 less
47 44 52 45 Unfamiliar brand is 40 less
64 61 68 62 Unfamiliar brand is 50 less
86 86 89 83 Unfamiliar brand same or
more 13 13 11 17
Percents are Cumulative Down Each Column Not
Including Last Row
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Impact of the Country of Origin on Product
Purchase Choices
All Early Mid Late Major factor 18 19 18 18
Minor factor 46 37 50 47 Not a
factor 36 44 32 35
18 - 34 35 - 44 45 - 55 Over 55 Major
factor 11 15 23 24 Minor factor 43 55 44 4
7 Not a factor 46 30 33 29
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Business Keynote - Impacts and Strategies of
Chinese New Emerging Asian Brands on the U.S.
CE Market

• Todd Thibodeaux
• VP, Industry Relations
• CEA