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Co-branding of Different Brands and Events Invigorates China Consumer Electronics Industry

January 22nd, 2017

Manufacturers of consumer electronics are seeking solutions to improve their profitability, but are restricted by saturation and fierce price competition. Thus, transformation seems to be urgent in order not to be squeezed out of the industry. With the fast development of video content on video websites, TV manufacturers started to cooperate with these platforms to promote sales by providing access to online video content, or by launching online TVs. For instance, Hisense Group launched the 8K ULED TV and ultrathin TVs in 2016. Besides the improvement in hardware, it cooperated with WASU, iQIYI.com, iCNTV and Tencent to extend its online TV content (VIDAA), thus maintaining its leading position. Letv, on the other hand, taking advantage of its platform resources, promoted its TVs with the sales strategy of “pay a membership, receive free TV” to stimulate consumption.

The industry is booming and co-branding is not limited to traditional consumer electronics. Watch manufacturer Fossil Group acquired a wearables manufacturer, Misfit Wearables Corp, to enter wearable electronics, looking to combine wearable electronics with fashion elements. On the other hand, Huawei Technologies Co, cooperating with Swarovski, launched the world’s first smart watch designed for women at the IFA 2015, and received a lot of attention from both home and abroad.

Although in 2016 there was a decrease in volume sales of computers, the situation was different with regard to gaming computers. The high-end gaming brand of ASUS, ASUS ROG (Republic of Gamers), sponsors gamers taking part in influential e-sports event such as LoL and WGT. By providing cutting-edge computers to professional gamers, it increased its exposure and reputation during competitions and live broadcasts. Furthermore, ROG attracts gaming lovers by video advertising and brand insertion, in order to promote both the event and its sales.

Outlook

According to Euromonitor International’s estimate, annual disposable incomes and consumer expenditure may continue to increase over the forecast period. Co-branding of brands and events are in accordance with development at the high end of sales. Better services can be expected from innovative manufacturers of consumer electronics. In addition, the concentration on consumer experience matches the idea of stimulating consumption from the “supply side” which will accelerate the transformation of companies and result in mutually beneficial cooperation.

With increasing subscription to broadband and growing internet speeds, online TVs and gaming computers may be further improved with a better connection to popular VR devices. As electronic sports and VR devices are growing in maturity, more computer manufacturers are entering this niche area to develop their gaming computers.

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