HKTDC April Fairs 2011

On-site Survey

HKTDC April Fairs 2011

On-site Survey

Actrium Solutions Actrium Solutions

3 May3 May 20112011

2

Methodology

Date of Fieldwork : April 13 - 28, 2011

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

Sample Size :

a. Electronics Fair 255 exhibitors; 302 buyers

b. Houseware Fair 208 exhibitors; 310 buyers

c. Gift & Premium Fair 256 exhibitors; 308 buyers

3

Key Findings Exhibitors

Key Findings Exhibitors

Impact of Japan Earthquake Impact of Japan Earthquake

4

Impact of Japan Earthquake on Business

18%

23%

18%

19%

48%

61%

0% 20% 40% 60%

Buyers (N=308)

Exhibitors (N=256)

Buyers (N=310)

Exhibitors (N=208)

Buyers (N=302)

Exhibitors (N=255)

Electronics Fair (Spring Edition)

Houseware Fair

Gift & Premium Fair

5

Key Areas of Impact (Exhibitors of Electronics Fair)

55%

78% 71% 71%

30%

11% 4%11% 3% 0%

18% 41%11%

29%

67%

-20%

80%

(a) Overall demandfor electronic

products

(d) FOB Sellingprice of your

products

(e) Delivery leadtime for your

products

Increase

Maintain

Decrease

(c) Sourcingprice of

your materials

Base: Exhibitors (N=155)

(b) Demand foryour products

6

Key Areas of Impact (Buyers of Electronics Fair)

82%72% 73%

64%71%

14% 10%16% 1% 0%

13%8%

12% 36%28%

-20%

80%

(a) Overall demandfor electronic

products

(d) Retail priceof

your products

(e) Deliverylead time foryour products

Increase

Maintain

Decrease

(c) FOBsourcing price

(b) Demand foryour products

Base: Buyers (N=172)

7

Proportion of Material Supplies Affected (Exhibitors of Electronics Fair)

15%

16%

24%

9%

21%

15%

0% 10% 20% 30%

No impact

1-5%

6-10%

11-20%

21-30%

More than 30%

Base: Exhibitors (N=66)

8

Duration of Earthquake Impact on Business (Electronics Fair)

31%33%

28%

8%

20%

25%

38%

17%

0%

10%

20%

30%

40%

Within 3 months 3-6 months 6-12 months More than 12 months

Exhibitors (N=107)

Buyers (N=119)

9

Key Findings Exhibitors

Key Findings Exhibitors

Market Outlook Market Outlook

10

Market Outlook for 2011

46%42%40%

19%11% 16%

31%40% 36%

9%6%

4%

-25%

25%

75%

Electronics Fair(N=534)

Houseware Fair(N=501)

Gift & Premium Fair(N=546)

Much Better

The same

Worse

Better

11

Forecast of Growth

57%

51%

41%

42%

46%

58%

1%

3%

1%

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

Respondents (N=191)

Respondents (N=211)

Respondents (N=262)

Single-digit Growth Double-digit Growth Uncertain

Electronics Fair(Spring Edition)

Houseware Fair

Gift & Premium Fair

12

Biggest Growth Regions

Top 3 Biggest Growth Regions

Electronics Fair

(Spring Edition)

Chinese mainlandUSRussia, Central & Eastern Europe

Houseware Fair USWestern EuropeChinese Mainland

Gift & Premium Fair

Chinese MainlandWestern EuropeUS

Other Potential Markets

Western EuropeCentral & South America

Russia, Central & Eastern EuropeAustralia & Pacific Islands

Russia, Central & Eastern EuropeAustralia & Pacific Islands

13

Change of Average Unit Price in 2011 (Buyers)

35% 32% 30%

5%12%

5%

63%53% 65%

-20%

30%

80%

Electronics Fair(Buyers, N=302)

Houseware Fair(Buyers, N=310)

Gift & Premium Fair(Buyers, N=308)

Increased

The same

Decreased

14

Main Reasons for Average Unit Price Change (Buyers)

27%

62%

85%

38%

64%

84%

26%

61%

81%

0% 20% 40% 60% 80%

Changes in exchange rate (esp. RMB)

Increase in labour cost

Increase in the cost of raw materials

Changes in exchange rate (esp. RMB)

Increase in labour cost

Increase in the cost of raw materials

Changes in exchange rate (esp. RMB)

Increase in labour cost

Increase in the cost of raw materials

Electronics Fair (Spring Edition)Buyers, N=159

Houseware FairBuyers, N=194

Gift & Premium FairBuyers, N=201

15

Key Findings Exhibitors

Key Findings Exhibitors

Product Trend Product Trend

16

Electronics Product Category with Biggest Market Growth Potential in 2011

Best Sellers Digital living & multimedia Audio visual products Telecommunications products

Products With Great Potential Electronic accessories

Healthcare electronicsComputer & peripheralsHome appliancesDigital imaging

Rising Stars In-vehicle electronics and navigation systemPersonal electronicsElectronic gamingSecurity productsTelecom, networking & wireless technologies

17

Change of Sourcing Patterns for Electronics Products (Exhibitors)

32%42%

78%

2%0% 0%

56%68%

22%

-10%

90%

Products with moreadvanced technology

(N=73)

Environmentally-friendly products

(N=66)

Silver hair products(N=23)

Increase

Maintain

Decrease

18

Change of Sourcing Patterns for Electronics Products (Buyers)

36% 38%

65%

2%0% 0%

60%64%

35%

-20%

80%

Products with moreadvanced technology

(N=74)

Environmentally-friendly products

(N=109)

Silver hair products(N=23)

Increase

Maintain

Decrease

19

Houseware Product Category with Biggest Market Growth Potential in 2011

Best SellersKitchenware & GadgetsTablewareHome Decorations

Products With Great Potential Health & Personal Care Items

Small Electrical AppliancesHousehold TextileFurniture

Rising Stars LightingBathroom AccessoriesPet SuppliesCleaning & SuppliesGardening & Outdoor Accessories

20

Gift & Premium Product Category with Biggest Market Growth Potential in 2011

Best SellersAdvertising Gifts & PremiumPersonal & Well-Being GiftsStationery & PaperFashion Jewellery & Accessories

Products With Great Potential

Toys & Sporting GoodsOutdoor & Travel GoodsFigurines & DecorationsWatches & ClocksPackaging

Remark: Product designs with technology and green concepts can make a splashin the market

21

Key Findings Exhibitors

Key Findings Exhibitors

Green Manufacturing(Exhibitors Only)

Green Manufacturing(Exhibitors Only)

22

Increased Efforts on Green Manufacturing

81%

86%

86%

0% 20% 40% 60% 80%

Exhibitors (N=256)

Exhibitors (N=208)

Exhibitors (N=255)

Electronics Fair(Spring Edition)

Houseware Fair

Gift & Premium Fair

23

Customers’ Demands on Green Manufacturing

15%

18%

43%

19%

24%

39%

24%

25%

51%

0% 20% 40%

Energy efficient products or services

Environmentally friendly (or green) manufacturing processes

Eco-certifications of any sort

Energy efficient products or services

Environmentally friendly (or green) manufacturing processes

Eco-certifications of any sort

Energy efficient products or services

Environmentally friendly (or green) manufacturing processes

Eco-certifications of any sort

Electronics Fair (Spring Edition)Exhibitors, N=255

Houseware FairExhibitors, N=208

Gift & Premium FairExhibitors, N=256

24

Additional Investment in Green Manufacturing

53%

60%

69%

0% 20% 40% 60%

Exhibitors (N=256)

Exhibitors (N=208)

Exhibitors (N=255)

Electronics Fair(Spring Edition)

Houseware Fair

Gift & Premium Fair

Remark: Key Investment Areas- Energy saving equipment for production facilities- Energy saving equipment for office operations- R&D activities to improve green features of our products/services

25

ConclusionConclusion

26

Conclusion

Impact of Japan EarthquakeImpact of Japan Earthquake

Electronics Houseware Gift & Premium

Have Impact on Business

61% of Exhibitors & 48% of buyers

19% of Exhibitors & 18% of buyers

23% of Exhibitors & 18% of buyers

Electronics Industry OnlyKey Areas of Impact

Rise in product sourcing & selling price Delay on delivery lead time No marked impact on product demand

Duration of Impact

Majority of of respondents expect the impact to last for a few

months to a year

27

Conclusion

Market Outlook in 2011Market Outlook in 2011

Electronics Houseware Gift & Premium

Positive Market Outlook

89% of respondents

84% of respondents

81% of respondents

Key Growth Regions

Chinese mainland Western Europe US Emerging markets such as Russia, Central & South America

Foresee a Rise in Unit Price

Over 50% of buyers 63% of buyers 65% of buyers

Drivers of Price Rise

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

28

Conclusion

Product Trend in 2011Product Trend in 2011

Electronics Houseware Gift & Premium

Biggest Growth Product Categories

Digital living & multimedia

Audio Visual Products

Telecom products

Kitchenware & gadgets

Tableware Home decoration

s

Advertising Gifts & Premium

Personal & Well-Being Gifts

Stationery & Paper Fashion Jewellery

& Accessories

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

29

Conclusion

Green Manufacturing Green Manufacturing

Electronics Houseware Gift & Premium

Increased Efforts in Green Manufacturing

Over 80% of exhibitors say that they will put 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: Energy saving equipment for production facilities Energy saving equipment for office operations R & D on products with green features

30

Key Findings Exhibitors

Key Findings Exhibitors

End Thank You

End Thank You