The Virtual Reality Industry (VR) in China

China’s Virtual Reality industry has experienced significant growth in recent years. It has become one of the world’s largest markets for VR technology and applications. The Chinese government has actively supported the development of VR, recognizing its potential for various sectors, including entertainment, education, healthcare, fashion, cosmetics, manufacturing, and tourism.

China’s VR market is driven by a combination of factors, such as a large population, increasing disposable income, and a growing tech-savvy middle class. This has led to a surge in demand for VR devices, content, and experiences.

Major Chinese tech companies, such as HTC, Xiaomi, and Huawei, have invested heavily in VR research and development. They have launched their own VR headsets and are continuously improving the technology to provide immersive experiences to consumers.

The purpose of this article is to explain what VR technology is and the impact it has on one of the leading countries in terms of technological innovations: China.

What exactly is VR?

Virtual Reality, often referred to as VR, is the use of computer technology to create a simulated environment in which as many senses as possible are stimulated, such as vision, hearing, touch and even smell. Unlike traditional user interfaces, it places the user inside an experience. Instead of viewing a screen in front of them, users are immersed and able to interact with 3D worlds.

Actually, VR seems like a relatively new idea in the digital economy, but if we go back to 1950, a cinematographer called Morton Heilig wanted to stimulate not only eyes and ears but all of our senses, by creating what he called an “experience theater”.

Years later, the world’s first virtual reality device was invented: “the Sensorama”. Then, this technology was used by the Airforce as part of its flight-training program. It was easier and safer, instead of crashing real flights.

Nowadays, everyone can buy and use headsets or cardboard for their entertainment, just by using their smartphones. VR is becoming one of the key industries globally, with hardware and software sales related to virtual reality growing year by year.

What is a successful VR experience?

A high level of VR immersion is achieved by engaging the two most prominent senses: vision and hearing, by using a VR headset and headphones. When we look around, we experience the environment the same as we do when we look around in real life.

Headphones amplify the experience by blocking the noise around us while allowing us to hear the sounds within the VR experience. When we move our heads, the sounds within the VR environment move around us like it would in real life.

How does it work?

Virtual Reality usually takes place in computer-generated simulations in which an entire 3D environment is rendered in the closest thing to a simulation. A person can then use a variety of electronic equipment and VR technologies to interact with the scene and control the environment.

In VR, the position of the user’s eyes is located within the simulated environment. If the user’s head turns, the graphics react accordingly. Rather than compositing virtual objects and real scenes, it creates a convincing and interactive world for the user.

    | “Reality is merely an illusion, albeit a very persistent one”. – Albert Einstein

Overall, virtual reality means creating a simulation of a real-world experience that a person can enter and leave at any time using technology. As VR continues to develop, we will only see these simulations getting more in-depth and real. The technology also continues to miniaturize and grow cheaper, bringing VR to a position in the key industry where almost anyone could have the chance to try it.

What are the differences between VR, AR, and MR?

We can say that Virtual Reality (VR) and Augmented Reality (AR) are two sides of the same coin. However, AR has one foot in the real world: it simulates artificial objects in the real world whereas VR creates an artificial environment.

China: The Emergence of a Leader in the VR Industry

Why is China leading the VR industry?

China is already one of the leaders in many industries linked to new technologies. So, it is no surprise that China tech industry is involved in many VR innovations, combining this technology with 5G, AR, MR, and AI. The coronavirus gave a boost to VR in other industries and key technologies. China has seen property developers offering virtual house tours and HTC held a VR conference.

Indeed, as a fast-emerging country, China is also the world’s most important VR and mixed reality market, thanks to rapid adoption by property firms and by companies in other industries. The main reason for this success is because the Chinese are extremely enthusiastic about emerging technologies.

On another hand, Chinese investors are certain that the majority of users in the future will access VR via their smartphones, instead of goggles attached to a computer or a console.

Moreover, by 2026, China’s action plan is to become the world leader in the virtual reality industry. This means having a thriving industrial ecosystem, with Chinese companies that will be highly competitive around the globe. China aims to ship 25 million virtual reality devices.

The statistic shows the forecasted spending of the augmented and virtual reality industry in China from 2018 to 2023. By 2023, the AR/VR industry expenditure was forecasted to reach about 65.2 billion U.S. dollars in China.

Government initiatives

It is important to underline the fact that the Chinese government is involved in this technology. In 2018, it has released a document entitled “ Guiding Opinions of the Ministry of Industry and Information Technology on Accelerating the Development of the Virtual Reality Industry” outlining how it wants to engage in VR development in China.

The VR market is expected to grow by 36 times in the next four years, reaching 55 billion yuan ($8.5 billion). The country began a campaign to support entrepreneurship in 2014 and has since opened 1,600 high-tech incubators for startups. Nowadays, at least 200 startups are working in China’s virtual-reality industry, according to iQIYI (a Baidu unit). There is also a China academy related to VR adoption.

Baidu, Alibaba, and Tencent — often referred to collectively as BAT serves more than 688 million Internet users in China alone. These three giants are focusing on VR, as immersive video and applications could be the first VR industry to mature, according to China’s Ministry of Industry and Information Technology.

VR has entered Chinese Classrooms

One of the major reasons for China’s technological advance in terms of VR is due to the fact that children grow up in an environment where they are surrounded by technological tools. Indeed, they are taught from an early age in school how to use these tools and how it works.

They can thus use VR to visualize 3D animations in anatomy books for example.

Indeed, VR is said to improve knowledge retention by bringing personal experience into classrooms and other training settings. In his Cone of Experience, Edgar Dale theorized that we retain much more knowledge when something is actually experienced rather than simply studied. 

To put it in a nutshell, it highlights the importance of putting knowledge into practice and skill improvement, which can be easier thanks to VR.

| “We retain 10% of what we read but 90% of what we experience”. – Edgar Dale

Starting their business during the burgeoning period of VR/AR education in China, the five major VR/AR education providers in China are:

• Fly VR (讯飞幻境)
• Mengke VR (萌科)
• Growlib (格如灵)
• VRSchool (微视酷)
• HEIVR (黑晶科技)

VR training and education can deliver lessons and training that are either not practical or even not possible in the real world. VR improves knowledge retention by bringing personal experience into training and education.

How VR and AR Are Driving the Future in China?

Imagine a world where we could learn about the Universe by actually moving through it. The educational uses are almost limitless. Augmented reality (AR) and Virtual Reality (VR) bridge the digital and physical worlds.

They allow you to experience visually, in the same way, you would in the real world. AR dramatically expands the ways our devices can help with everyday activities like searching for information, shopping, etc.

VR lets you experience what it’s like to go anywhere — from the front row of a concert to distant planets in outer space.

VR and AR in Industrial Maintenance

One of the biggest advantages of VR is keeping down costs. With VR, industrial employees would be able to get hands-on experience with any piece of equipment instantly.

AR and VR are two amazing technologies to enhance the efficiency of actual maintenance processes. Maintenance workers can use AR glasses that overlay critical information for performing both equipment repair and preventative maintenance. The possibilities for AR to make maintenance workers faster and more efficient are nearly endless.

VR in Chinese Healthcare

Chinese medicine is being improved thanks to VR applications, with acupuncture students using 3D body maps and surgeons tackling tumors conventional medicine cannot reach. VR can be used to train medical students and in the future make life-threatening operations safer.

Mistakes are life-threatening but thanks to this technology, learning becomes much easier and less stressful. It can also be used to improve mental health as well. For people who suffer from different forms of anxiety, VR can provide cheap and simple solutions to train for situations in the real world.

VR Shopping: Pushing Retail Innovation to the Next Level

In 2016, this video of Alibaba’s “First complete VR shopping experience” has gone viral. At the time, it was seen as a futuristic improvement. Over the years, many stores have adopted this technology to promote their products and attract new customers.

In China, Lego, DJI, GoPro, and Sonos are now all selling real goods on virtual aisles. Malls and shops across the world have closed their doors because of the coronavirus pandemic.

However, shopaholics in China can still continue to do shopping thanks to virtual reality. High-end Chinese shopping mall chain K11 tried to keep customers coming in by offering them a 360-degree panorama tour through its mall in the southern Chinese city of Guangzhou.

All you need to do to access it is open up a WeChat mini program, choose which one of the VR Mall out of 46 to visit, and then you will be able to buy the products you see.

| “I think about how I can help women and girls shop easier on my site, so they can buy things quicker, easier and nicer. And how can we use VR technology to help sellers to sell their products.” – Jack Ma

Augmented Reality For Makeup is a Booming Business

In recent years, hundreds of Chinese beautifying apps have emerged, whether to take pictures whenever you want, or to complete the beautifying experience of e-commerce.

• MeituPic 美图秀秀

As one of the earliest beauty camera apps, it is quite a reference among Chinese women, allowing them to put filters on and special effects. It also provides features for face-lift, slimming, whitening, or eye enlargement. 

• Meipai 美拍
• Makeup plus 美颜相机
• DaMeiRen 大美人

We can also talk about the YouCam technology which allows users to receive a customized beauty experience through virtual makeup try-on, AI skin diagnostic, and AI Smart Shade Finder solutions. Those tools are available to use in Tmall beauty brand flagship stores. Those solutions can help beauty brands provide personalized shopping experiences to consumers and increase online sales.

VR in Entertainment

• VR Escape Rooms

Escape rooms and Murder Mystery have become freezingly popular among young people in China. For some young players, puzzle games can be depicted as immersive real-life adventures that provide a new way of socializing.

Why is it so popular? Simply because it’s more engaging and interactive as you are immersed into another world. According to research from McKinsey, the younger generation is shifting its expenses from goods to experiences.

Moreover, social media have accelerated this new trend because of their friend’s recommendations.

The escape room sector in China was valued at over 10 billion yuan in 2018, and by 2019 escape rooms soared to 12,000 across China. And the Global Escape Room Market Size is expected to grow at a CAGR of 9.5% from 2022 to 2030.

In order to face this problem, developers had to innovate to attract players. During Chinese New Year holidays, one app called “我是谜” (Wo shi mi) saw new users rise over 20%, ranking at the 13rd place in the free app’s category in the Apple Store.

• VR Theme Park

China’s first virtual reality theme park, the Oriental Science Fiction Valley, opened in 2018 in the southwestern province of Guizhou. Dozens of sci-fi attractions provide visitors with a unique virtual experience. 

Things to know before entering the Chinese VR Market

The Perception of VR in China

After reading this article, you should know that VR is a booming and promising industry in China. The Chinese market is full of opportunities because the Chinese are willing to spend money on new technologies. Moreover, they are quick learners and are not afraid of trying new things and activities.

Major Chinese Companies specialized in VR

• Baidu: the most used search engine in China, wants to create the biggest Chinese language VR service. This will work through the creation of games, concerts, and movies in virtual reality. The VR movies should even have several possible scenarios, and it will be up to the viewer to choose the desired plot for the sequel, technology already being proven successful by Netflix.
• Alibaba: the e-commerce giant offers a shopping experience that reimagines how you shop online with an interactive experience that looks and feels futuristic, but is also easy to use.
• Tencent: also working on virtual reality in the video and gaming sectors. Since China has more than 400 million online players, this market is promising. As QQ music holder, they will also offer VR concerts and hologram creation services that singers can include in their show. In 2020, Tencent teamed up with Huawei on a game development lab to explore cloud gaming, AI, and AR/VR.
• iQIYI: an innovative market-leading online entertainment service in China. The company thrives on combining creative talent with technology resulting in innovative content and massive commervcial sucess.
• Meitupic: an image editing software that is mostly used in Mainland China but is also popular in Hong Kong and Taiwan. It allows its user to do face-editing, but also use AR to try on makeup.
• Huawei: one of the leaders when it comes to VR glasses.
• HTC: it has introduced the “Vive Cosmos” in 2019, one of the most versatile premium PC VR.

To give you a few tips

As Virtual Reality has made its way into many big Tech companies and development platforms, it can undoubtedly be one of the most efficient ways to develop your business since almost everybody uses smartphones.

However, the key factor for a company in China is e-reputation. In fact, if you want to target Chinese consumers, the first thing you will need is to get their attention and keep them interested in your products. If your products meet their expectations, then they can potentially talk about it on social media and with their friends.

Entering the Chinese market without a serious evaluation of search engine advertising’s extent in online business could be detrimental as it’s a quite powerful and gainful technique. You will also need to analyze the Chinese market’s demand in order to adapt your marketing strategy.

In order to take advantage of the growing VR market, you need to know and understand Chinese consumers. Since the virtual reality market is already kind of saturated, you should either create a new concept of headphones or choose to develop new features.

This can be a video demo, or machines used during a virtual experience to increase the sensations and interactions. However, competition is fierce against BAT (Baidu, Alibaba, and Tencent).

Moreover, the government said it wants to encourage sustainable innovation. Political and financial support will be granted to any company looking for new technologies in line with this major issue.

Contact us & start promoting your VR Products/services in China

The Virtual Reality industry in China has seen significant growth and development, driven by government support, the presence of leading companies, and the adoption of VR technology in various industries. While challenges remain, the future of the VR industry in China looks promising, with continued innovation and investment expected to drive further growth.

We are a China-based marketing agency offering cost-effective solutions to foreign brands interested in tapping into the Chinese eCommerce market. Our team of Chinese and foreign experts has the experience and know-how needed to succeed in this lucrative, yet complicated market.

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