With a huge internet user base, powerful 5G network and advanced manufacturing capability, China’s metaverse market is set to have a bright future, industry insiders said.
Yu Chen, managing director and partner of Boston Consulting Group and also a core member of the firm’s technology, media and telecommunications practice, said, “With key technology breakthroughs, some third-party institutions believe the industry in China will reach 200 billion yuan. ($28 billion) in five years.”
Currently, the market scale of China’s metaverse industry is about 40 billion yuan, according to the 2022 China Metaverse Development Annual Report, which was published by Social Sciences Academic Press.
Yu, who has a positive attitude towards the industry, said, “Over the next five years, the development of the metaverse in China is comparable to that of smartphones in the past decades.
Yu Jianing, executive director of the metaverse industry committee at the China Mobile Communications Association, said, “During the latest round of mobile Internet development in China, a host of excellent technology companies have emerged. . They had accumulated vast resources and experience in scientific innovation, which serve as key elements in boosting the development of China’s metaverse.”
“On the development path of Chinese enterprises, in particular, there are niche areas worth investing in,” said BCG’s Yu.
BCG’s Yu noted that based on the construction framework, the target investment track of the Chinese metaverse market is mainly composed of technology components, interaction portals and content.
“Metaverse interaction portals are the media that convey the virtual experience to users. They often appear in the form of extended reality equipment such as augmented reality and virtual reality equipment.”
According to the BCG report, as early as 2012, Google launched its XR Google Glass head-mount display. Many manufacturers have followed suit and acquired the capacity to produce XR equipment.
As the metaverse concept went viral, a pulse in XR gear development emerged in 2021. Between 2018 and 2020, annual global shipments of XR gear were approximately 5.5 million units at 6 million units. However, in 2021 the figure rose to 11.2 million units, almost doubling the previous year’s level. The value of shipments reached $5 billion, according to BCG data.
“The peak of investment in China’s XR equipment industry also came in 2021, with a total of 107 financing deals. Total investment was 28.1 billion yuan, up 208.8% year over year,” the BCG report said.
BCG’s Yu said, “The research, development and manufacturing of XR equipment is currently an investment hot spot in China, as some technical bottlenecks have not been resolved. For example, AR equipment and VR equipment are still big and heavy and not comfortable enough for consumers. The optical projection module of VR equipment always causes dizziness when wearing for a long time.
“Startups and big tech companies in China are scrambling to break down technical barriers, generating an investment hotspot in the XR equipment industry.”
Rokid Inc, a high-tech company based in Hangzhou, Zhejiang province, is among the first group of Chinese technology companies to start research and development of XR equipment. In 2016, Rokid’s R-Lab was founded, focusing on optical image recognition and AR technology R&D. In 2018, its AR glasses – Rokid Glass – were launched, being the first mass-produced AR glasses in China.
Misa Zhu, Founder and CEO of Rokid, said most of the investment the company has attracted has gone into R&D, as it has strived to produce lightweight, comfortable and attractive AR glasses to inspire consumers to wearing the glasses for long periods of time. .
The weight of the latest version of Rokid’s AR glasses, Rokid Air, is 83 grams – quite an impressive result in the industry. Zhu said that to reduce the weight of the product, the company worked hard on the design and optimized the space inside the AR glasses.
The recent shopping festival on November 11 was a testament to the success of Rokid Air. Company data showed that during the shopping festival, more than 10,000 units of Rokid Air were sold.
BCG’s Yu said, “Developing 2B scenarios is also worth investing in, as companies seek industry solutions that take advantage of the metaverse.”
“For example, medical companies are considering using VR technology to plan and rehearse surgery, while airlines want to use the metaverse to train their pilots.”
Speaking about the future development of the Chinese metaverse, BCG’s Yu suggested that in addition to breaking technical barriers, policy guidelines and industry standardization from laws and regulations are needed.
“Chinese technology companies will take the lower-level technology design path differently from the rest of the world. Using their own advantages, they are expected to accelerate their pace, effectively eliminate technical bottlenecks, and mass-produce XR equipment. profitable opportunities to conquer the market,” he added.
Zhu from Rokid, said, “There is still a long way to go. Currently, XR glasses can only be applied in specific scenarios. Equipping them with all capabilities will be very demanding in technical process, production capacity and materials, including semiconductors. .”
When asked whether or not the company is concerned about ‘bottleneck’ issues in chips, he said, “We are taking a localized route, reducing the risks of relying on advanced imported materials. Until “Right now, we haven’t encountered a ‘bottleneck.’ In the long term, we expect the general environment to improve. Let’s give it some time and trust.
Chen Jia, independent international strategy researcher, said, “The past few months have witnessed the bumpy development of the metaverse industry globally. Compared to the rest of the world, the Chinese market has achieved the most development, especially politically. “
In 2022, the governments of Beijing and Shanghai, as well as the provinces of Jiangsu, Zhejiang, Shandong and Fujian launched guidelines and action plans for the metaverse sector.
“With central and local governments vigorously promoting the industry, enterprises actively participating, and consumers’ knowledge of the metaverse deepening, the market is expected to grow exponentially,” said Hong Yong, associate researcher at the research department of e-commerce under the Ministry of Commerce.