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China – The land of opportunity for IoT

IoT Blog | February, 2018


Stephan Klink

Head of Commercial IoT, Vodafone Internet of Things (IoT)

China – The land of opportunity for IoT

The Internet of Things (IoT) is igniting China’s next wave of economic growth.

Strong government support for digitalisation means there is huge market potential for IoT solutions across a wide range of industrial sectors, including automotive, manufacturing, energy, retail and healthcare. And with China boasting some of the most tech-savvy citizens in the world, there’s also plenty of scope for connected products and services in the consumer market.

Politically, China has gone public with its enthusiasm for digital transformation. The government’s Internet Plus strategy represents a detailed action plan for domestic technology adoption in order to boost economic growth by integrating mobile Internet, cloud computing, big data and IoT.

One specific initiative takes centre stage: Made in China 2025 will deliver a comprehensive upgrade of the manufacturing industry through smart technologies, with a view to making the country a world leader in the fourth industrial revolution. China has a digital vision – and it is determined turn it into reality.

Indeed, according to Vodafone’s IoT barometer 2017/18, 79% of organisations in China think that digital transformation will be impossible without IoT. For many organisations, IoT is already a core part of business operations. More than two-thirds of respondents in China said that IoT applications were mission-critical to their business. And 58% of adopters said IoT was already integrated with their core business systems, such as ERP.

This positive environment presents opportunities for global organisations looking to expand their IoT footprint in the China. However, building a long-term strategy in a rapidly-developing region requires knowledge of cultural, logistical and regulatory factors, especially given different consumer buying behaviour and technical infrastructure. China is a land of opportunity, but the following national influences need to be considered.

Things are changing, and fast: The IoT market in China is full of potential, with most Chinese enterprises already having a digital vision and strategy in place. This presents enormous opportunities within the existing industrial infrastructure, with global organisations keen to form partnerships to make the most of future growth. China is therefore a dynamic and rapidly expanding market for IoT, meaning digital disruption is the new norm.

Competition is intensifying: China is a forward-looking market when it comes to new digital products and services. There is strong demand for connected products such as Mobike, the Vodafone-connected fully station-less bicycle-sharing system headquartered in Beijing. This receptive environment means some companies have already established strong positions in the market. New entrants are vying for position, as competition hots up.

Cyber security is a crucial consideration: Pervasive technologies like IoT can present potent new digital risk, in any part of the world. The National Computer Network Emergency Response Technical Team/Coordination Centre of China has previously stressed the importance of establishing a proper security framework, based around establishing advanced perimeter security and instituting a powerful commitment to the highest ethical standards for data. Nowadays, the development of an increasingly mature supply infrastructure in China – comprising device equipment manufacturers, software and cloud companies, systems integrators and telecoms providers – means IoT can be deployed safely and securely across business and consumer sectors.

IoT is resulting in upskilling: In recent years, China has won a reputation as a global economic powerhouse, having displaced the United States as the largest manufacturing country in the world, according to data from the United Nations. However, the drive towards digitalisation is likely to present new challenges, as manufacturers seek to move towards more data-driven production methods. This means the transition from hardware-based to software-inspired manufacturing will require careful change management and investment in skills.

The way forward – partnership is key

Taking the above factors into consideration, it’s clear that IoT deployment in China presents enormous opportunities. The formation of an IoT strategy requires localized knowledge, including a strong understanding of existing IT infrastructures and associated factors such as government regulation. Furthermore, IoT implementation requires access to reliable connectivity, and the ability to employ end-to-end solutions at scale. Thus, the decision around choosing the right IoT partner in China remains a critical one.

Download the Vodafone IoT APAC Barometer to find out more about IoT adoption in China.

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