Among the E7 developing countries, China is ranked as the most attractive consumer electronics market from investment point of view. Its consumer electronics market increased at a CAGR of 11.71% during 2002-2006 and is expected to grow at a CAGR of 12% during the forecasted period (2007-2011).

The market is becoming increasingly crowded. To be more competitive, companies are shifting their research and production towards more advanced products, such as Liquid Crystal Display (LCD) TVs, digital TVs, DVD recorders and digital cameras with eight-megapixel or higher resolution.

On the consumption front, the continuously falling prices of consumer electronics together with increasing disposable income is giving reasons to consumers to spend more on electronics products. These factors indicate a bright future for the consumer electronics industry in China.

Key Findings

- In terms of sales volume, TV will post the highest sales followed by washing machines in the home appliances segment during the forecasted period. (2007-2011).

- In the sound and images segment, Portable Media Player (PMP) and Digital Video Camera sales will increase with the highest CAGR values of 39.43% and 15.21% respectively during 2007-2011.

- Mobile Phones and Personal Computers are among the consumer electronics with low penetration rates, indicating ample room for growth in sales in the medium-term.

- Retailer credit will play a critical role in extending consumer electronics to the lower socio-economic segment, thereby increasing sales from this segment. Although price will continue to be a key driver, financing options such as installment plans will drive penetration into these segments.

- It is expected that per head disposable income in China will increase during 2007-2011 at a CAGR of 12.28%, thus spurring growth in the consumer electronics market.