AR & VR - China

China

Revenue in the AR & VR market market in China is projected to reach €7.6bn in 2024.
Revenue in this market is expected to show an annual growth rate (CAGR 2024-2029) of 8.94%, resulting in a projected market volume of €11.6bn by 2029.
The largest market in China is VR Hardware, with a market volume of €2.7bn in 2024.
Most revenue is generated in China, with a projected market volume of €10,110.0m in 2024.
In the AR & VR market market, the number of users in China is expected to amount to 1,135.0m users by 2029.
User penetration in China will be 77.4% in 2024 and is expected to hit 79.6% by 2029.
The average revenue per user (ARPU) in China is expected to amount to €6.8.
China's AR & VR market is rapidly evolving, driven by increased investment in immersive technologies and a growing demand for innovative applications across various industries.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
For more information on the data displayed, use the info button right next to the boxes.

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Analyst Opinion

The AR & VR market in China is experiencing rapid growth and development, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. Customer preferences in China are playing a significant role in the growth of the AR & VR market.

Chinese consumers are increasingly seeking immersive and interactive experiences, and AR & VR technologies provide them with just that. The younger generation, in particular, is highly interested in AR & VR applications for gaming, entertainment, and social media. Additionally, Chinese consumers place a high value on convenience and efficiency, and AR & VR technologies offer innovative solutions in various industries, such as retail, healthcare, and education.

Trends in the market are also contributing to the growth of the AR & VR market in China. The Chinese government has been actively promoting the development of emerging technologies, including AR & VR, as part of its "Made in China 2025" initiative. This has led to increased investment in AR & VR startups and research and development activities.

Furthermore, Chinese companies are expanding their presence in the global AR & VR market through strategic partnerships and acquisitions. These trends are driving innovation and competition in the industry, resulting in the introduction of new and improved AR & VR products and services. Local special circumstances in China are shaping the AR & VR market as well.

China has a large and tech-savvy population, with over 900 million internet users. This provides a huge potential market for AR & VR technologies. Moreover, China has a strong manufacturing base and is a global leader in hardware production.

This gives Chinese companies a competitive advantage in the production and distribution of AR & VR devices, leading to lower costs and increased accessibility for consumers. Underlying macroeconomic factors are also contributing to the growth of the AR & VR market in China. The Chinese economy has been experiencing steady growth, which has resulted in increased disposable income and consumer spending.

This has created a favorable environment for the adoption of AR & VR technologies, as consumers have the financial means to invest in these products and services. Additionally, the Chinese government's focus on innovation and technological advancement has led to favorable policies and incentives for AR & VR companies, further fueling the market growth. In conclusion, the AR & VR market in China is experiencing significant growth and development due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

The demand for immersive and interactive experiences, government support, a tech-savvy population, and favorable economic conditions are all contributing to the expansion of the AR & VR market in China. As the market continues to evolve, we can expect to see further advancements and innovations in AR & VR technologies in China.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).