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Bullish China component distributors expect average revenue growth of 30 percent in 2012

June 6, 2012

SHENZHEN, China, June 6, 2012 /PRNewswire-Asia/ — China’s electronic components distributors are expecting strong revenue growth of 30 percent in 2012, despite economic pressures across Europe and North America. This is according to the results of the 12th Annual Electronic Components Distributor Survey announced today by Electronics Supply & Manufacturing-China (ESM-China), an electronics management title of Global Sources’ joint venture, eMedia Asia Limited.

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Growth is being fueled by robust demand for components used in smartphones, LED lighting, power generation, portable medical electronics and hybrid vehicles.

China’s electronics manufacturers confirm this positive outlook, with 51 percent of surveyed manufacturers planning to increase their orders from distributors. In 2011, they purchased a total of over RMB400 billion of components. On average, each bought RMB207 million worth of components from their distributors, representing 54 percent of their total component purchases.

A total of 137 senior managers working for China’s leading component distributors and 1,980 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.

Manufacturers value distributors’ services

Apart from ordering components, manufacturers are deepening their relationships with distributors due to the latter’s capability to deliver value-added services such as technical support, small volume procurement, sourcing of hard-to-find components and logistics services.

Manufacturers, however, are selective with the distributors they work with. Product quality remains the prime consideration when choosing franchised (61 percent) or independent distributors (59 percent), followed by price (43 percent).

Untimely delivery and longer delivery lead times are China manufacturers’ major issues when working with distributors. To overcome these timing issues, distributors are carrying more inventory than ever. In 2011, only 43 percent carried at least four-week worth of inventory while this year, 70 percent of the surveyed distributors plan to do so.

ESM-China Publisher, Brandon Smith, said: “The ESM-China Distributor Survey is a good measure of the industry’s pulse. Despite softening global economies, surveyed distributors remain optimistic in 2012 and the Survey results outlining manufacturer purchasing expectations tend to correspond. The good news is that distributors are finally beginning to develop the combination of product quality, price and service that their customers expect.”

Distributors look to new markets, brands

The Survey also outlines distributors’ topmost concerns being aggressive competition, declining profit margins and mounting operational cost. To overcome these challenges, they are adopting multiple strategies including developing new application markets (59 percent), carrying new brands (32 percent), increasing their marketing activities (31 percent) and offering more extensive technical support (28 percent).

China‘s most preferred distributors announced

Further, the Survey revealed the most preferred component distributors, as voted by managers of China’s electronics manufacturers. Winners of each category (in alphabetical order) are:

  • Top 10 Most Preferred Local Franchised Distributors: Asiacom Technology, Burnon International, China Electronic Appliance Shenzhen, Comtech Group, Fengbao Electronic, Guangzhou ZLG-MCU, Honestar Electronics, Interine Electronics, Mornsun Electronics and Secom Telecom.
  • Top 10 Most Preferred Overseas Franchised Distributors: Arrow Electronics, Avnet, Cytech Technology, Excelpoint System (HK), Future Electronics, HK Baite (Group), Jetronic Technology, Mouser Electronics, Willas-Array and WPG Holdings.
  • Top 5 Most Preferred Independent Distributors: Advanced MP, America II, Compo Electronics, Mogultech International and Pioneer Electronics.
  • Top 5 Most Promising Distributors: Ample Solutions, Hi-Hone, Powertek Group, RightIC and Vadas International.
  • Top 3 Best e-Commerce Distributors: ICKEY, RS Components and Shenzhen Shenmei Technology.
  • Top 3 Best Technical Support Distributors: Beijing Microseen Technology, DXY Technology and Richardson RFPD.
  • Top 3 Best Logistics Service Distributors: Mission Electronics, North Technology and Sigmatek.
  • Editor’s Choice — The Manager of the Year: Simon Yu, President of Arrow Asia Pacific Components.

For more information on the 12th Annual Electronic Components Distributor Survey, please contact Cindy Hu, Chief Analyst of ESM-China at cindyhu@esmchina.com.

About Global Sources

Global Sources is a leading business-to-business media company and a primary facilitator of trade with Greater China.

The core business facilitates trade between Asia and the world using English-language media such as online marketplaces (http://www.globalsources.com), print and digital magazines, sourcing research reports, private sourcing events, trade shows, and online sourcing fairs.

Over 1.18 million international buyers, including 85 of the world’s top 100 retailers, use these services to obtain product and company information to help them source more profitably from overseas supply markets. These services also provide suppliers with integrated marketing solutions to build corporate image, generate sales leads and win orders from buyers in more than 240 countries and territories.

Global Sources’ other businesses provides Chinese-language media to companies selling to and within Greater China. These services include online web sites, print and digital magazines, seminars and trade shows. In mainland China, Global Sources has a network of more than 40 office locations and a community of over 4 million registered online users and magazine readers of its Chinese-language media.

Now in its fifth decade, Global Sources has been publicly listed on the NASDAQ since 2000.

About eMedia Asia Limited

eMedia Asia Limited is a joint venture between Global Sources (60.1%) and United Business Media (39.9%).

eMedia Asia provides 500,000-plus technology decision-makers throughout Asia and China with access to a multichannel media network. Through its technical events, publications and online network, eMedia Asia leads in providing the region’s electronics community with the business and technical information they need to remain competitive.

    Press Contact in Asia               Investor Contact in Asia
    Camellia So                         Suzanne Wang
    Tel: +852-2555-5021                 Tel: +852-2555-4747
    e-mail: cso@globalsources.com       e-mail: investor@globalsources.com

    Press Contact in U.S.               Investor Contact in U.S.
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Source: PR Newswire