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China on the leading edge of smart TV revolution

Online video service provider Leshi Internet Information & Technology exhibits its smart TVs featuring large displays and Internet connectivity, at the CE China trade show on April 21.

SHENZHEN, China -- China is leading the global trend toward connected consumer electronics, a position underscored at a recent trade show in Shenzhen, a manufacturing hub next door to Hong Kong.

     Some 150 companies from 25 countries and regions participated in the three-day Consumer Electronics China, the first such event held in the country by Messe Berlin of Germany.

     Smart TVs and virtual reality displays, in particular, got plenty of interest at the exhibit, which which took place on April 20-22.

     The show took place in a special economic zone close to Hong Kong, where scores of home appliances makers and information technology companies have their facilities.

     The total area of the exhibition was some 15,000 sq. meters, one-tenth the size of IFA, Europe's largest consumer electronics fair organized by the German company. But big global companies like Bosch and Siemens showcased their products and technologies.

     Trade shows in China have mostly been events for foreign buyers. But CE China was aimed squarely at domestic consumers.

     That's why major consumer brands, including Suning Commerce Group, a leading Chinese electronics store chain; Alibaba Group Holding, which operates Tmall, a huge online shopping site; and the local unit of set up their exhibition booths. Japanese e-commerce giant Rakuten supported the event, although it didn not have a booth.

     Most of the products on display were home electric appliances targeting middle-class Chinese consumers, such as refrigerators, washing machines and cooking gadgets. Bosch and Siemens also displayed mainly white goods.

     Smart TVs loaded with integrated Internet features, were among the exhibits that attracted the most attention.

     Leshi Internet Information & Technology, a major Chinese provider of online video services, exhibited its smart TVs featuring large displays and Internet connectivity.

     The company offers a wide range of video content for subscribers paying an annual fee of 490 yuan ($75). But the annual fee is cut to some 300 yuan for subscribers who have bought the company's connected TV.

     Since the company views the TV as a tool to promote its online video services, the price tags are substantially lower than its competitors'. The firm's 70-inch TV, for instance, is priced at 15,000 yuan, compared with the over 20,000 yuan that Chinese consumers generally have to pay for smart TVs of this size.

     Powered by original video streaming technology, the company's smart TVs are ready for 4K high-quality online video.

     To offer its TVs at low prices, Leshi sells them only over the Internet. Since they were launched in 2013, more than 5 million units have been sold. The firm is aiming to push the unit sales past 6 million this year.

     As of January, more than 80% of TVs sold in China were Internet-ready models, a far higher rate than in any other country, according to a survey by German market research company GfK.

     Because it has lagged in the shift to multi-channel TV broadcast services like cable TV and satellite TV, China is moving fast toward online TV, said Paul Gray, a principal analyst at IHS Technology group.

     China is also leading the global market for online video distribution services, according to Gray.

Virtual reality

Shenzhen Dlodlo Technologies displayed samples of its virtual reality headset, to be launched this autumn. Styled like a pair of sunglasses, the Dlodlo V One weighs only 78 grams, much lighter than competing products offered by such makers as Oculus VR, Sony and Samsung Electronics. All of these rivals are heavy, weighing more than 300 grams, said Thomas Lee, Dlodlo's co-founder and vice president, stressing his company's technological advantage.

     In expanding its business into China, Messe Berlin is seeking to tap Chinese consumers' growing purchasing power and keen appetite for consumer electronics.

     Chinese consumers have far greater expectations for smart digital home appliances than their counterparts in other countries, according to Juergen Boyny, a GfK director.

     Asia's share in the global population of middle-class consumers, the main consumer group supporting the home appliances market, is rising fast. In 2009, the Asia-Pacific region accounted for 28% of such consumers around the world, but the rate will rise to 54% in 2020 and 66% in 2030, Boyny said.

     The strong growth prospects for consumer electronics in Asia, especially in China, led the Consumer Technology Association of the U.S., which produces the International CES, the world's largest IT and electronics show, to organize its first event in Asia last year, CES Asia in Shanghai. CTA plans to hold the show this year as well.

     IFA and CES, which have traditionally focused on Europe and the U.S., respectively, will start competing with each other in China.

     Onkyo was the only Japanese company present at the Shenzhen show. With major Western electronics makers now in serious expansion drives in China, Japanese players will find themselves under growing pressure to rev up their strategies for the vast and growing market.

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