China's Tech Boom: How Subsidies and Innovation Are Reshaping the Market？

Not too long ago, China rolled out government subsidies for buying tech gadgets. It lines up with the Chinese New Year, and everyone’s excited to spend again. So, how can consumer electronics and tech brands jump on this chance to break into the Chinese market? Let’s check it out!

Global technology and consumer durables market state

The first half of 2024 showed a bit of a mixed bag for the Tech & Durables (T&D) industry. Consumers started opening their wallets and keeping a close eye on prices, leading to a 1% year-over-year increase in sales volumes, even though revenues dropped by 1%. This is the first time the sector has seen growth since the sales boom caused by lockdowns in 2020 and 2021.

While consumers are getting a little more willing to spend, it’s still at pretty low levels. Stabilizing inflation in several areas has helped many people shift from being super cautious to more intentional about their purchases. But full confidence hasn’t bounced back yet. Right now, consumers are looking to boost their Tech & Durables spending in key areas, but they’re really focused on affordability.

NIQ’s Omnichannel Commerce tracking shows that online sales of consumer T&D goods have settled at high levels. Globally, 36% of all T&D sales revenue now comes from online purchases. This trend is consistent across all regions, though the levels vary. In China and Central & Eastern Europe, online T&D sales have grown steadily and now make up nearly half (49% and 47% respectively) of their revenue, which is the highest rate in any region.

Next, we’ll dive deeper into the Chinese T&D market.

China's technology and consumer durables market grows rapidly

According to GfK, China's technology and consumer durables market sales are expected to reach 224.74 billion RMB in 2024, with a year-on-year growth rate of 5%. Among them, communication devices are up by 9%, consumer electronics have risen by 6%, and camera equipment are up by 5%, all showing solid growth. The market for both small and large home appliances is steadily climbing, with a 1% increase year-on-year for each; and IT and office products have leveled off, staying the same as FY2023.

This is because of a mix of factors: manufacturers are still coming up with new ideas and making their products more affordable, consumers are finally starting to replace and upgrade their stuff after holding off, and new categories (like wearables, headphones, small appliances, etc.) still have plenty of room to grow. Plus, these good moves are getting some solid backing from the relevant departments through policy support.

On January 15, 2025, China announced an expanded initiative outlining subsidy measures for the purchase of new smartphones and other digital products, inclusive of offerings from various international brands. According to the plan, consumers who purchase smartphones, tablets, smartwatches, or wristbands priced below 6,000 RMB (approximately 834.6 U.S. dollars) will receive a subsidy equivalent to 15% of the product's sales price.

Data from the Chinese Ministry of Commerce indicates that its personal appliance trade-in program resulted in a sales increase of over 1.3 trillion yuan for automobiles, home appliances, and other products in 2024. We anticipate that this supplementary plan will further enhance sales of smartphones and other digital devices this year.

The fastest growing category in the Chinese market

The personal consumer electronics landscape, primarily led by smartphones and supplemented by wearables, accounts for half of the overall technology and consumer durables market turnover and is experiencing a growth rate of 10%. In the first half of 2024, retail sales for smart large appliances, as well as smart kitchen, bathroom, and environmental appliances, saw year-on-year growth of 5.3%, 4.8%, and 15.7%, respectively. Let’s dive into the key segments of the Chinese consumer electronics market: smartphones, smart wearables, headphones, and tablets.

In the first half of 2024, retail market sales for smartphones surpassed 500 billion RMB, reflecting a 14% increase compared to the previous year. This growth can be largely attributed to China's economic recovery and the resurgence of various Chinese-branded products.

According to GfK, retail sales in China's wrist wear market rose by 4% year-on-year last year, with adult smartwatch sales increasing by 18%. As we move into the second quarter of 2024, the growth rate of the wearable market has further accelerated to 19%. In the context of cautious consumer spending, smart wearable devices have emerged as a new avenue for addressing consumers' health and fitness needs.

GfK's retail monitoring data indicates that between May and June 2024, the headphone market achieved sales volume of 30.7 million pairs, marking an 8% increase year-on-year. The sales value reached 7.23 billion yuan, which represents a 9% rise year-on-year. The most popular products in the headphone market include neck-hanging, headband, true wireless, and highly sought-after in-ear headphones, with sales volume and revenue for true wireless in-ear products reaching remarkable figures of 142% and 67%, respectively.

As GfK's forecast for the flat panel retail market, the tablet market is expected to exceed 25 million units in 2024, with a sales value exceeding 70 billion RMB yuan, achieving a new record high and nearly doubling since 2019.

World Technology and Consumer Durables Market Insights

Key regions driving this growth will include North America (+3%) and Middle East/Africa (+2%). In North America, steady growth in both the consumer electronics and the domestic appliances sectors will be at the core of the region’s forecast of 3% growth in T&D sales value. While in the Middle East & Africa (MEA), 2025 will see continued growth in demand for home appliances, although at a more moderate level due to the high baselines already achieved.

The picture below shows NIQ GfK's forecast forT&D market sales around the world in 2025.

T&D market trends in 2025

NIQ's 2025 market estimate indicates that the IT (including office), small domestic appliances (SDA), and telecom sectors will be the primary drivers of industry growth. Consumers are increasingly prioritizing affordability and value in their purchasing decisions, especially regarding domestic appliances and consumer electronics. In response to these preferences, we have identified several emerging trends in technology and durable goods retailing.

Long lifespan products

In the future, more durable products will be favored by consumers.

NIQ’s 2024 Mid-Year Consumer outlook s survey showed that 71% of consumers are now waiting at least three years to renew their mobile phones, which is a 19-point increase since 2019. And 61% would now pay a premium for a smartphone that is likely to have a longer life span before it needs to be replaced. When they do decide to replace their device, more than half are willing to shell out for pricier options if they know they’re durable and won’t need to be replaced anytime soon. In fact, in 2024, how long a product lasts became the top reason for consumers looking to get their money’s worth.

Open and embrace AI

AI has significantly evolved, now providing predictive and proactive solutions tailored to individual needs rather than just passive recommendations. This shift toward predictive AI encompasses areas such as wearables, mental health applications, smart home appliances, and even conversational commerce platforms. Furthermore, consumer interest in these innovations is notable, with around 35% of shoppers expressing a desire for smart devices, including refrigerators that automatically reorder products when supplies are low.

Convenience and multifunction

In 2024, convenience emerged as the third-most significant factor influencing the perceived value of products and services, with consumers increasingly seeking to save time, effort, and space.

According to NIQ’s 2024 Mid-Year Consumer Outlook, 55% of respondents—particularly from Gen Z and Millennials—indicated a likelihood of spending more on convenient formats. Within the T&D categories, sales of fully automatic espresso machines increased by 7%, compared to a 5% rise for all hot beverage makers. Notably, in the first five months of 2024, over a quarter of vacuum cleaners sold, along with 21% of lawn mowers, were robotic models.

Manufacturers have begun to witness the positive impact of these trends. For instance, sales of wireless Bluetooth computer keyboards rose by 18% in value during the first half of 2024, while the overall category remained stable. Moreover, sales of robot vacuums with wet and dry capabilities experienced a remarkable increase of 55%, indicating a significant opportunity to blend automated convenience with practical functionalities that help consumers save time and address their daily challenges effectively.

Government subsidy in China

In China, electronic product trade-in subsidies have significantly contributed to sales growth. Data released by the National Development and Reform Commission of China indicates that from January to May 2024, sales of home appliances on major e-commerce platforms in the country rose by over 80%, with the "trade-in" program emerging as a key factor in driving home appliance consumption growth.

Additionally, GfK launched the Chinese Consumer Confidence Tracking Survey in June 2024, revealing that 57% of consumers would adjust their home appliance purchasing plans based on the strength of subsidy ratios. This suggests that a well-structured trade-in subsidy has the potential to convert a greater number of potential consumers.

In this context, how can manufacturers and brands adapt to emerging trends?

Strategies for T&D brands

Technology innovation

Over the next 50 years, staying innovative will be key to achieving strong consumer sales. If manufacturers aim to boost their revenue and sales, it's essential to begin with research and innovation that reflects the evolving needs of consumers. By addressing these complex expectations, they can secure a robust position in the competitive market.

Focus on consumers’ health & wellbeing

While health, hygiene, and well-being have always been important to consumers around the globe, it's interesting to see just how much more important these aspects have become since the COVID pandemic. In 2023, total health device sales hit an impressive 51.7 billion USD, even as T&D sales were sliding—thanks to a growing interest in wearables and handy little healthy appliances for home use. In fact, sales of wearable devices like fitness trackers and blood pressure monitors grew by 3% in the first half of 2024 compared to the year prior. Furthermore, wake-up lights and SAD lamps, which are great for enhancing sleep and mood, experienced a remarkable growth of 36% last year, as more individuals started to appreciate the value of quality rest and ensuring they have ample light during those darker winter months.

Make your products sustainable

T&D brands should embrace innovation in sustainability, focusing on energy efficiency, durability, repairability, and the use of recycled materials, as these environmental concerns are increasingly important to consumers. According to NIQ’s 2024 Mid-Year Consumer Outlook, 70% of consumers are inclined to buy products that are energy efficient or have low operating costs, meaning being both more energy efficient and affordable is key.

Wanna grab the potential T&D market in China? Let’s connect!

Reference

China includes smartphones in consumer goods replacement program. Xinhua

Tech and durables market sales value worldwide year-to-date from 2023 to 2024, by region. Statista

Blurring boundaries in 2025: The online-offline fusion in Tech & Durables retail. Nielsen IQ

Smart home outlook: The demand and price dynamics shaping the market into 2025. Nielsen IQ

2025 will see Tech & Durables back to growth: NIQ full-year sales estimate. Nielsen IQ

Innovate to elevate: Driving Tech & Durables spending in 2025. Nielsen IQ

2024-2025中国科技类消费电子产业发展白皮书

2025年终端行业发展趋势与变化. Gfk中怡康