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Diversified Development of Smart Wearables, Smartwatches Enter a New Growth Cycle
2023-12-11
The Chinese smart wearable device market is experiencing a phase of diversified development: The smartwatch sector is witnessing rapid growth, particularly in the high-end market, while the bracelet market is on a downward trend. From a brand perspective, market concentration is intensifying, with major brands significantly increasing their market share in smart bracelets, children's watches, and smartwatches. Smartwatches are progressively becoming independent from smartphones in terms of both hardware and software, offering enhanced connectivity and convenience. In various scenarios such as sports, health, home, and automotive, smartwatches are demonstrating increasingly intelligent and personalized features.


The Chinese smart wearable device market has been diversifying, with smartwatches flourishing, children's watches stabilizing, and a decline in the bracelet market.


In 2023, the Chinese smart wearable device market exhibited significant diversification, especially in smart bracelets, smartwatches, and children's watches. According to the latest monitoring data from Sandalwood on the Chinese e-commerce market, trends and shifts in consumer preferences in this sector are evident.


Smart bracelets, with their affordable prices and focused features like notifications, payment functions, fitness, and health monitoring, have catered to users seeking basic smart needs. However, smartwatches, overlapping in functions with smart bracelets, are starting to replace the bracelet market, leading to a decline in demand for smart bracelets. Specifically, from January to October 2023, sales volume and revenue for smart bracelets decreased by 7% and 13% respectively, along with a 7% decrease in average selling price.


In contrast to the declining bracelet market, the smartwatch market has seen robust growth. In the same period, sales volume and revenue for smartwatches increased by 25% and 31%, respectively, with an average price increase of 5%. This reflects the strong market demand for smartwatches and continuous advancement in technology and features. Smartwatches, with comprehensive functionalities and high-end positioning, attract consumers who seeking high-tech and personalized experiences. The growth rate of the smartwatch market remains in double digits, showing more resilience compared to other consumer electronics, with significant market potential given its current low penetration.


Furthermore, the children's watch market shows relative stability, with sales volume and revenue growing by 2% and 3% respectively, and a slight 1% increase in average selling price.


The demand for smart wearable devices is differentiating between economic and high-end products: The smartwatch market is experiencing K-shaped growth, with the high-end market further expanding.

 

Sandalwood's monitoring data shows that in 2023, the smart wearable device market's price trends are distinctly stratified. The smart bracelet market highlights consumer preference for economical products. From January to October 2023, products priced below 500 yuan accounted for 93.2% of the market, an increase of 3.6 percentage points. Conversely, the market share for higher-priced smart bracelets declined, indicating a reduced demand for high-priced products.


The children's watch market shows price stability, with products priced below 500 yuan slightly increasing to 77.2%, dominating the economy segment. Additionally, the market share for products in the 500-1000 yuan range rose slightly, increasing by 0.5 percentage points, showing a marginal increase in demand for higher quality or multifunctional children's watches.


The smartwatch market presents a K-shaped distribution; the market shares for products priced below 500 yuan and in the 500-1000 yuan range increased, indicating a growing demand for low to mid-priced products. However, market shares in the 1000-2000 yuan and 2000-3000 yuan ranges decreased. Simultaneously, the shares for high-end products in the 3000-5000 yuan and above 5000 yuan ranges increased, showing stable growth in the high-end market.


The brand value of the smartwatch market is highlighted, and the concentration of the head brand is significantly increased


According to Sandalwood, the smart wearable device market's brand landscape shows significant growth in market concentration. From January to October 2023, the market share of the top two brands in smart bracelets in the Chinese e-commerce market increased from 42% to 56%, further capturing market space. Simultaneously, the market share of the top two brands in the children's watch market rose, indicating a steady increase in their market share. Notably, the market concentration of the top two smartwatch brands increased significantly, showing the market leaders' rapid expansion and strengthening their dominant position in the industry.


In the digital age, traditional watches are not only time-telling devices but symbols of craftsmanship and historical heritage. They represent exquisite craftsmanship, deep cultural value, and enduring elegance. However, as products of technological innovation, smartwatches not only enhance user experience through their multifunctionality and cutting-edge technology but also expand their functionality and influence with modern design and personalized configurations. They are gradually becoming strong competitors to traditional luxury watches, especially favored by young consumers seeking a fusion of fashion and technology. This trend highlights a shift in consumer preferences towards high-tech wearable devices and underscores the unique position of smartwatches in the fusion of fashion and technology. In purchasing decisions for smartwatches, factors such as scene value, fashion value, brand value, and social interaction are becoming increasingly important.


Smartwatches are becoming more independent, and wearable devices are becoming more intelligent, personalized, and connected


Smartwatches are now showing a significant improvement in battery life, adapting to long-duration activities. They are becoming increasingly independent in terms of hardware and software services, gradually achieving functionalities independent of smartphones. The user experience and functionality richness of smartwatches increasingly rely on their software and algorithms, with major brands intensifying investments in this area. The competition involves not only the accuracy of scene monitoring but also meeting consumers' demands for personalized experiences.


Humane's AI Pin combines the functionalities of smartphones with the convenience of wearable devices. It has a compact design, similar to a half-flip phone, and can be easily attached to clothing with magnets. It features a built-in projector to display the smartphone interface on any surface. Humane utilizes proprietary software and OpenAI's GPT technology, enabling users to communicate and query through voice commands. The AI Pin is equipped with a multifunctional camera capable of capturing images and videos and can even identify objects and estimate calories when scanning food.


It's foreseeable that wearable devices are becoming more intelligent and personalized, offering customized services and suggestions by learning users' behaviors and habits. Seamless connectivity is a key feature, with smoother data synchronization and interaction between wearable devices, smartphones, homes, and other devices. Thirdly, data-driven health and fitness management are increasingly becoming a reality, with wearable devices not only tracking health and fitness metrics but also predicting potential health risks and assisting in medical diagnostics.


In the smart home sector, smartwatches can control various smart home devices such as light bulbs, thermostats, and security cameras, with users adjusting the environment through gestures or voice commands. They also provide real-time home safety information, enhancing convenience and safety. In the future, the role of smartwatches in smart homes is expected to become more significant.


With the development of electric vehicles and automotive intelligence, more vehicles support integration with smartwatches, offering remote control functions like air conditioning, door switches, charging information, etc., achieving stronger connectivity.

Disclaimer: The content and viewpoints expressed in this article are for reference purposes only and should not be construed as investment advice or recommendations. very investor should conduct thorough independent research and consult with professional investment advisors before making any investment decisions.
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