HKTDC HK Electronics Fair (Autumn Edition)

HKTDC HK Int’l Lighting Fair (Autumn Edition)

On-site Survey

HKTDC HK Electronics Fair (Autumn Edition)

HKTDC HK Int’l Lighting Fair (Autumn Edition)

On-site Survey

Actrium Solutions Actrium Solutions

07 Nov07 Nov 20112011

2

Methodology

Date of Fieldwork :

a. Electronics Fair Oct 13 - 16, 2011

b. Lighting Fair Oct 27 - 29, 2011

Method : Face-to-face interview at the Exhibition Venue

Sample Size :

a. Electronics Fair 302 exhibitors; 507 buyers

b. Lighting Fair 206 exhibitors; 305 buyers

3

Key Findings Exhibitors

Key Findings Exhibitors

Impact of Global Issues on Business

Impact of Global Issues on Business

4

European/US Debt Crisis Has Impact on Exhibitors’ Business

45% 49%

75% 77%

16%

25% 23%

0%

39%35%

0%

16%

-50%

50%

Increase

Maintain

Decrease

Total Sales Value Payment Risk of Clients

(Electronics)

(Electronics)

(Lighting)

(Lighting)

5

European/US Debt Crisis Has Impact on Buyers’ Business

52% 52%67% 66% 65%

72%81%

10%

10% 7%7%

12%

23%

46% 38%24% 28% 21%

0 %0%

88%

2%

10%

19%

-50%

50%

Total Sales Value Sourcing Volume/Order Size

Increase

Maintain

Decrease

Request for FullPayment before

Delivery by Suppliers

Retail Price ofProducts

(Electronics)(Lighting)

(Lighting)(Lighting)

(Lighting)

(Electronics)(Electronics)

(Electronics)

6

US, Greece & Italy Are Among the Hardest-hit Markets by the Debt Crisis

12%

23%

26%

30%

46%

0% 20% 40%

UnitedKingdom

Spain

Greece

Italy

United States

Base: Electronics Fair (N=666)

12%

19%

23%

28%

37%

0% 20% 40%

UnitedKingdom

Italy

Spain

Greece

United States

Base: Lighting Fair (N=447)

7

RMB Is Expected to Extend Uptrend Against USD

Trend of RMB Exchange Rate Against USDin the Next 12 Months

4%

21%

75%

4%

21%

75%

0% 20% 40% 60% 80%

Depreciate

Stabilize

Appreciate

Electronics Fair(N=799)Lighting Fair(N=511)

8

Key Findings Exhibitors

Key Findings Exhibitors

Market Outlook Market Outlook

9

Market Outlook for 2012 Is Cautiously Optimistic

33% 25%

27%33%

40%29%

9%

5%

-40%

60%

Much Better

The same

Worse

Better

Electronics(N=809)

Lighting( N=511)

10

Biggest Growth Regions

Top 3 Biggest Growth Regions

Electronics Chinese MainlandIndiaSouth East Asia

Lighting Chinese MainlandWestern EuropeUS

Other PotentialMarkets

USCentral & South AmericanWestern Europe

JapanCentral & South AmericanIndia

11

Key Findings Exhibitors

Key Findings Exhibitors

Product Trend Product Trend

12

Product Category with Biggest Market Growth Potential in 2012 (Electronics)

Best Sellers Computer & peripherals Telecommunications products Audio visual products

Products With Great Potential Mobile devices and accessories

Home appliancesSolar generated products & cells In-vehicle electronics and navigation systemHealthcare electronics

Rising StarsElectronic accessoriesPersonal electronicsSecurity products Digital imaging Electronic gaming

13

Change of Sourcing Patterns for Electronics Products (Buyers of Electronics Fair)

73%

34% 36%

78%

42%

1% 3%1% 2% 3%

63%

24%

65%

19%

56%

-20%

80%

Environmentally-friendly products

(N=198)

Silver-hairproducts(N=102)

Pet electronicsproducts(N=99)

Increase

Maintain

Decrease

Electronicaccessories

(N=186)

Mobile devicesproducts(N=171)

14

Change of Product Price in 2011 (Buyers of Electronics Fair)

Change of Average Unit Pricein 2011

Decreased,18%

The same,25%

Increased,57%

Base: Buyers (N=507)

Main Reasons forAverage Unit Price Change

4%

9%

32%

68%

80%

0% 25% 50% 75%

Source more products for the higher-end market

Source better quality products to cope with the demand in my existing market

Changes in exchange rate (esp. RMB)

Increase in labour cost

Increase in the cost of raw materials

Base: Buyers (N=292)

15

Product Category with Biggest Market Growth Potential in 2012 (Lighting)

Best Sellers LED

Commercial Lighting

Household Lighting

Products With Great Potential

Other Green Lighting Products

Outdoor Lighting

Lighting Accessories, Parts & Components

16

Change of Sourcing Patterns for Lighting Products (Buyers of Lighting Fair)

17%22%

43%

0% 2% 0%

76%83%

57%

-20%

80%

Products with LEDtechnology(N=245)

Increase

Maintain

Decrease

Products with moreadvanced technology

(N=142)

Environmentally-friendly products

(N=162)

17

Change of Product Price in 2011 (Buyers of Lighting Fair)

Change of Average Unit Pricein 2011

Decreased,37%

The same,28%

Increased,35%

Base: Buyers (N=305)

Main Reasons forAverage Unit Price Change

14%

22%

29%

44%

64%

0% 25% 50% 75%

Source more products for the higher-end market

Source better quality products to cope with the demand in my existing market

Changes in exchange rate (esp. RMB)

Increase in labour cost

Increase in the cost of raw materials

Base: Buyers (N=108)

18

Key Findings Exhibitors

Key Findings Exhibitors

Green Manufacturing(Exhibitors Only)

Green Manufacturing(Exhibitors Only)

19

Vast Majority of Respondents Indicate Increased Efforts on Green Manufacturing

90%

89%

0% 20% 40% 60% 80% 100%

Exhibitors (N=206)

Exhibitors (N=302)

Electronics Fair

Lighting Fair

20

Customers’ Demands on Green Manufacturing

25%

30%

50%

26%

30%

50%

0% 20% 40% 60%

Energy efficient products or services (including investment/ consulting services)

Environmentally friendly (or green) manufacturing processes

Eco-certifications of any sort

Environmentally friendly (or green) manufacturing processes

Energy efficient products or services(including investment/ consulting services)

Eco-certifications of any sort

Electronics FairExhibitors, N=302

Lighting FairExhibitors, N=206

21

Majority of Respondents Indicate Additional Investment in Green Manufacturing

Remark: Key Investment Areas- R&D activities to improve green features of our products/services- Compliance with green manufacturing requirements- Install energy saving equipment for production facilities- Purchase energy saving equipment for office operations

79%

68%

0% 20% 40% 60% 80%

Exhibitors (N=206)

Exhibitors (N=302)

Electronics Fair

Lighting Fair

22

ConclusionConclusion

23

Conclusion

Impact of Global IssuesImpact of Global Issues

Exhibitors Buyers

Key Areas of Impact of

Debt Crisis

Total sales value Payment risk from

clients might increase

Total sales value FOB price Sourcing volume Request for full payment before deli

very by suppliers might increase

Hardest-hit Markets by Debt Crisis

US Italy Greece

Trend of RMB Exchange Rate

75% of respondents expect the RMB exchange rate against USD will appreciate in the next 12 months

24

Conclusion

Market Outlook in 2012Market Outlook in 2012

Electronics Lighting

Positive Market Outlook

67% of respondents 75% of respondents

Key Growth Regions

Chinese Mainland India South East Asia

Chinese Mainland Western Europe US

Rise in Unit Price

57% of buyers 35% of buyers

Drivers of Price Rise

Increased raw material cost Increased labor cost Exchange rate factor (esp. RMB)

25

Conclusion

Product Trend in 2012Product Trend in 2012

Electronics Lighting

Biggest Growth Product Categories

Computer & Peripherals Telecommunications

Products Audio Visual Products

LED Commercial Lighting Household Lighting

Product designs with technology and green concepts can make a splash in the market

26

Conclusion

Green ManufacturingGreen Manufacturing

Electronics Lighting

Increased Efforts in Green Manufacturing

Around 90% of exhibitors indicate increased efforts on green manufacturing

Customers’ Demand on Green Manufacturing

Eco-certifications of any sort Environmental friendly manufacturing process Energy efficient products or services

Additional Investment in Green Manufacturing

Majority of exhibitors will invest more in green manufacturing

Key Investment Areas include: R & D on products with green features Compliance with green manufacturing requirements Install energy saving equipment for production facilities Purchase energy saving equipment for office operations

27

Key Findings Exhibitors

Key Findings Exhibitors

End Thank You

End Thank You