Electronic components, especially PCB(Printed circuit board) business in China expect continued revenue growth of 30% from 2012- 2013, despite ongoing economic pressures in the global market. This is among the findings of the 13th Annual Electronic Components Distributor Survey announced today by Electronics Supply & Manufacturing-China (ESM-China), a leading electronics management title published by Global Sources’ joint venture, eMedia Asia Limited.
Surveyed distributors indicated an average revenue growth of 18% in 2012, with main markets being consumer electronics, industrial electronics, and networking and communications systems. This year, the markets of note are security and surveillance, medical electronics, smart grid and LED pcb lightings(aluminium based PCB).
A total of 126 senior managers working for leading components distributors in China and 2,274 corporate, purchasing, and procurement managers from China’s electronics manufacturers participated in the survey, which aims to take an in-depth look into their current challenges and future strategies.
On average, China manufacturers purchased 197 million yuan worth of components in 2012, of which 61% were from distributors. This represented a 7 percentage point increase compared with 2011. Additionally, 69% of the manufacturers indicated that they would further increase the proportion of components purchased from distributors in 2013.
Manufacturers are deepening their relationships with distributors due to the latter’s increasing capability to deliver value-added services. For franchised distributors, the most valued services are technical support (49%) and small-volume procurement (28%); for independent distributors, the most valued services include sourcing of hard-to-find components (54%) and small-volume procurement (37%). For technical support, reference design (71%) and field application support (70%) are most in demand.
Manufacturers Choose by Quality and Price
Product quality remains the prime consideration when choosing distributors (49%), followed by price (34% for franchised distributors and 37% for independent distributors) and delivery lead times (23% and 32%, respectively).
Unstable quality, long delivery lead times and uncompetitive prices are China manufacturers’ major issues when working with distributors.
“Thanks to the continued support from local and international distributors, ESM-China ‘s annual Survey continues to provide a strong and credible barometer of the industry. Despite the challenging global economic environment, these distributors remain cautiously optimistic about the China market in 2013. This is in line with manufacturers’ plans to increase the ratio of components purchased from distributors,” said ESM-China Publisher, Brandon Smith.
Softening demand was the main challenge facing distributors in 2012 which they addressed by developing new application markets, expanding customer base as well as strengthening marketing activities.
The proportion of online transaction in 2012 was 11% for franchised distributors (2 percentage points higher than 2011), and 20% for independent distributors (unchanged from 2011).