Photo via mojing.cn
VR (Virtual Reality) is booming in China, to say the least. According to China research firm China Skinny, “Virtual Reality” was the number one tech term searched on Baidu, China’s most popular search engine, in 2016. Furthermore, the VR market in China is anticipated to reach a value of $860 million by the end of 2016, and a projected value of $8.5 billion by 2020. However, there has yet to emerge a market leader for a sector with such an enormous potential value.
None of the BAT (Baidu, Alibaba, Tencent) trifecta members have released their own HMDs (Head Mounted Device) yet, they each have provided capital support and seed funding for content creators in China’s VR startup space. It seems that these industry giants have a rather “wait and see” approach, hedging their bets on the sidelines.
The market, currently, does exist. For instance, on Alibaba’s e-commerce platforms, reported sales of VR headsets have reached 300,000 units a month. Notable manufacturers of HMD headsets include Baofeng Mojing, 3Glasses, LeEco and DeePoon.
Beijing based Baofeng Technology Co Ltd is of particular interest and represents a strong contender for the crown – selling 1 million units of its $30 dollar headset through its network of 20,000 brick-and-mortar stores in just the first quarter of 2016. Founded in 2007, the company hails itself as a leading platform for Internet video streaming, relying on a mix of innovation and efficiency to realize profit.
Baofeng completed its second round of fundraising for 230 million yuan in January 2016, giving the company a valuation of 1.43 billion yuan. The company is slated to not only make hardware, but also to become increasingly competitive in the content space, creating VR movies, video games, educational and sports-related broadcasting services.
American companies have also begun to enter the fray, such as Palo Alto headquartered Jaunt VR which, recently, in partnership with the Shanghai Media Group, formed Jaunt China. The joint venture is slated to develop over 500 VR productions in the next two years.
Taiwan’s HTC, creator of the popular VIVE HMD, is treating the Mainland China market as its first priority. The firm has forged an alliance with two major electronic retailers, Suning and Gome, to distribute its products in over 10,000 sophisticated VR “experience centers” throughout the country.
On the whole, however, there has yet to emerge a monopolistic force in the sector, which tend to emerge in the Middle Kingdom market.
What are your thoughts on the nascent VR market in China? Feel free to comment below and continue the discussion.