Despite economic pressures in the global market, China will continue to be a growth market for electronics distributors. Component distributors can expect growth of 23 percent in 2013, according to the 13th Annual Electronic Components Distributor Survey by Electronics Supply & Manufacturing-China (ESM-China), published by Global Sources.
Distributors indicated an average revenue growth of 18 percent in 2012, with main markets being consumer electronics, industrial electronics, and networking and communications systems, the survey found. This year, the markets of note are security and surveillance, medical electronics, smart grid and LED lightings.
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 percent were from distributors. This represented a 7 percentage point increase compared with 2011. Additionally, 69 percent of the manufacturers indicated that they would further increase the proportion of components purchased from distributors in 2013.
The report also found 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 percent) and small-volume procurement (28 percent); for independent distributors, the most valued services include sourcing of hard-to-find components (54 percent) and small-volume procurement (37 percent). For technical support, reference design (71 percent) and field application support (70 percent) are most in demand.
Manufacturers choose by quality and price
Additional findings from the survey include:
- Product quality remains the prime consideration when choosing distributors (49 percent), followed by price (34 percent for franchised distributors and 37 percent for independent distributors) and delivery lead times (23 percent and 32 percent respectively).
- Unstable quality, long delivery lead times and uncompetitive prices are China manufacturers' major issues when working with distributors.
- 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 percent for franchised distributors (2 percentage points higher than 2011), and 20 percent for independent distributors (unchanged from 2011).
China's most preferred components distributors revealed
The survey also revealed the most preferred components 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, CEAC, Comtech Group, Fortune Techgroup, Honestar Electronics, Interine Electronics, Mornsun Electronics, Powertek Group and Shenzhen Sekorm Advanced Technologies.
- Top 10 Most Preferred Overseas Franchised Distributors: Arrow Electronics, Avnet, Cytech Technology, Excelpoint Systems (HK), Future Electronics, HK Baite (Group), Jetronic Technology, Mouser Electronics, WPG Holdings and WT Microelectronics.
- Top 5 Most Preferred Independent Distributors: Advanced MP, America II, Ample Solutions, Mogultech International and Pioneer Electronics.
- Top 5 Most Promising Distributors: Hi-Hone, Sigma Technology, Skysoon Communication, Weltronics Component and Willas-Array Electronics.
- Top 3 Rising Star Distributors: Infinitrue Technology, RightIC and Shenzhen Shenmei Technology.
- Top 3 Best e-Commerce Distributors: Beijing Excellent Communication Technology, Lierda Science and Technology, and RS Components.
- Top 3 Best Technical Support Distributors: DXY Technology, Fengbao Electronic and Guangzhou ZLG-MCU.
- Top 3 Best Logistics Service Distributors: Majestic Trading Development, Mission Electronics and Vadas International.
- Analyst's Choice -- Outstanding Executive of the Year: Charles Tan, Vice President of Future Electronics Asia Pac