Wearable Electronics in China

PROSPECTS

Growth slows, constrained by maturity and limited innovation potential

While wearable electronics continued to see volumes rise in 2019, growth slowed markedly over the course of the review period. As well as moving towards maturity, the category is seeing growth constrained by factors such as a limited scope for innovation, with the majority of bands and smart watches focusing on providing health- and sports-related functions, including heart-rate monitoring, sleep-status tracking and fitness-performance tracking.

Demand for children’s phone watches boosts smart wearables sales

Smart wearables offers the greatest potential for development in wearable electronics. At the end of the review period, smart wearables growth was being driven by demand for children’s phone watches, with growing numbers of manufacturers launching such products with access to third party apps and advanced functions, such as video calls and digital payment.

Innovation in design and technology

Both activity and smart wearables saw manufacturers increasingly focus on design as a means of stimulating consumer interest and differentiating their products. One notable direction taken by manufacturers was to make wearables look like real watches with added-value functions, like NFC, by introducing features such as pseudo-analogue watch dials.

COMPETITIVE LANDSCAPE

Huami continues to develop the Mi Band offer

Huami remained the largest player in wearable electronics in 2019, thanks to the strength of its Mi bands, which offer low prices and strong functions. Aside from Mi bands, the company also launched its premium smart watch brand, Amazfit, which is primarily focused on providing sports-related functions.

New product developments spur strong performance for Huawei

Ranked second in overall wearable electronics, Huawei was amongst the fastest-growing players in the category in 2019. The company’s dynamic performance was supported by the launch of the relatively highly priced Huawei B5 series band with large AMOLED screen and embedded Bluetooth earphones, and the Huawei GT Watch, another relatively premium product which received a positive response from consumers.

Overseas players fail to justify brand positioning

A number of overseas manufacturers, including Samsung, Fitbit and Misfit, experienced decline in wearable electronics in the final year of the review period. These companies positioned their brands in the premium segment but failed to deliver an image capable of justifying their higher prices.

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