According to Amrita Choudhury, a lead analyst at Technavio for research on enterprise application, “The IoT Market in China is expected to exceed a revenue of 248 billion by 2020 should the market sustain a CAGR of close to 19% during the forecast period. The significant progress of RFID market is supporting the growth of IoT market. The government is the largest sector in terms of RFID market revenue in China.”
The report categorizes the IoT market in China into the following end-user segments: manufacturing, automotive, healthcare, and others. The top three segments are elaborated below:
IoT market in China in the manufacturing sector
The manufacturing industry will enable IoT technologies by connecting the physical and digital world in the coming years. IoT technologies help improve workers’ health and safety in production units. Manufacturing units provide workers with a wearable device that alerts the worker if he enters into a hazardous area. However, Chinese manufacturers are facing some challenges while adopting IoT technology. There is a lack of integrated communication systems and platforms required to transfer information and data across and outside of their organizations.
As of 2015, the manufacturing sector was the largest end-user segment with 34.56% of the IoT market in China. However, by 2020, Technavio researchers expect the market share to decline to 33.5% as many domestic and international firms will start establishing manufacturing units outside of China in line with the rising labor costs in the country. China has recently lost a few new factory investments to lower-cost countries such as Vietnam.
IoT market in China in the automotive sector
The introduction of connected car services and applications that include asset tracking and fleet management will boost the IoT market revenue in the country during the forecast period. Many Chinese firms such as Alibaba, SAIC Motor, LeEco, and Baidu are looking to enter the automotive industry with IoT products and solutions. The smart car is an innovation in the automotive industry, and it can connect to the internet to enhance driver’s experience. In 2015, the top ten auto companies in China manufactured 32.5 million cars. The major automotive companies in China are Beijing Auto, Brilliance, BYD, Chang’an, Chery, Dongfeng, FAW, Geely, Great Wall Moto, Guangzhou Auto, JAC, and SAIC.
“The market share of the automotive sector will reach close to 23% by 2020 as the sector is receiving increased investments in IoT innovations. China Mobile has formed an Internet of Vehicles company to utilize opportunities in the automotive industry,” says Amrita.
IoT market in China in the healthcare sector
The IoT market in China’s healthcare sector was valued at USD 16.54 billion in 2015 and will reach USD 42.5 billion by 2020, growing at a CAGR of 22.02% during the forecast period.
In the healthcare sector, the IoT can be used for remote monitoring of patients, maintaining medical records, creating real-time alerts about patients’ health, choosing drugs and their dosage, and maintaining insurance details. The technology helps reduce medication errors by improving communication between patients and healthcare providers.
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