Global Electronics Component Market Development and the ASEAN’s

ASEAN is well positioned to capitalize on the rebound in global trade. Before the COVID-19 pandemic and Russia’s invasion of Ukraine, international businesses had begun moving more manufacturing and sourcing to Southeast Asia. One reason is that China’s once overwhelming cost advantage in labor-intensive industries began to wane around a decade ago as the nation rapidly developed. According to BCG’s Global Manufacturing Cost Competitiveness Index, while manufacturing in China remains significantly cheaper than in the EU, US, and Japan in many industries, direct manufacturing costs in Indonesia, Thailand, and Malaysia are 10% to 14% lower than in China.

          On the global stage, revenue in the worldwide consumer electronics market amounts to USD 1,028.00 billion in 2023, and the market is expected to grow annually by 2.3% (CAGR 2023 – 2028). The market’s largest segment is telephony, with a volume of USD 498.30 billion in 2023. In global comparison, most revenue is generated in China at USD 228.30 billion in 2023. Concerning total population figures, per-person revenues of USD 133.80 were generated in 2023. In the consumer electronics market, 45.9% of total revenue will be generated through online sales in 2023, the volume is expected to amount to 8,974.00 million pieces by 2028, and the market is expected to show a volume growth of 1.3% in 2024. In addition, the average volume per person in the consumer electronics market is expected to amount to 1.08 pieces in 2023.

In ASEAN, the revenue in the consumer electronics market amounts to USD 55.28 billion in 2023, and the market is expected to grow annually by 1.12% (CAGR 2023 – 2028). The market’s largest segment is Telephony, with a market volume of USD 30.12 billion in 2023. In global comparison, most revenue is generated in China, with USD 228.30 billion in 2023. Concerning total population figures, per-person revenues of USD 71.07 will be developed in 2023. In the consumer electronics market, volume is expected to reach 646.90 million by 2028. The consumer electronic market is expected to grow by 1.4% in 2024. The average volume per person in the consumer electronics market will amount to 0.77 pieces in 2023.

ASEAN’s colossal market, with a combined population of 685 million and nominal GDP of USD 3.6 trillion, is another powerful attraction. More than two-thirds of the region’s population is working age, and the number of middle-income and affluent households is projected to grow by around 5% annually for the rest of the decade. ASEAN’s economic diversity is a further strategic advantage. The region is a significant producer in sectors as varied as agriculture, mining, consumer goods, heavy industries, technology services, and semiconductors. According to BCG’s How ASEAN Can Use Its Trade Advantage to Power Ahead, ASEAN accounted for 17% of consumer electronics,12% of apparel, and 9% of automotive products globally.

Considering the consumer electronics market, ASEAN exports around USD 230 billion in consumer electronics annually. Foxconn, Ricoh, Quanta Computer, HP, Dell, and Fitbit are among the global companies that have moved some production to Vietnam and other Southeast Asia to diversify their supply chains or tap new sources of educated but lower-cost labor. The region’s factories rely heavily on mainland China, Taiwan, South Korea, and Japan for most materials and components. The next step for ASEAN is to build local supply bases for materials, key components, engineering, and other parts of the consumer electronics value chain. Developing such a supply base, however, will require time and training.

          Established and well-known companies dominate the consumer electronics market, including Apple, Samsung, Huawei, and Sony. These companies dominate in various product categories, such as smartphones, televisions, home appliances, and gaming consoles. Nevertheless, emerging players are gaining traction in the market, with Xiaomi being a prime example. Known primarily for its smartphones, Xiaomi has been making notable progress in the industry. Additionally, tech giants such as Google and Meta are making strides in virtual and augmented reality, becoming increasingly significant components of the overall market. As such, the competition in the consumer electronics market is intensifying, with established and emerging players vying for market share and consumer attention. We anticipate that several trends will fuel further growth in the consumer electronics market, including the emergence of 5G networks, the surging popularity of smart homes, and advancements in augmented and virtual reality technologies. These trends are set to transform a world becoming increasingly digital and interconnected, creating many opportunities for the consumer electronics market to expand. As such, this market can benefit significantly from these developments in the coming years.

Article by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., Senior Editor]