Wearables Become the New Hot Item in China

Source：Google

Be it for fashion or function, wearable devices have become some of the most sought-after products in China. In a survey by Statista, as of June 2023, 41% of respondents in China stated that they personally use wearables. The market also saw robust growth in device sales, registering 33.5 million units shipped in Q2 2023, an increase of 17.3% from last year, as reported by IDC Consulting.Unlike the United States, which has a clear preference for smartwatches, both smartwatches and smart wristbands are in high demand in China. Interestingly, again per IDC Consulting, whilst adult smartwatches witnessed a steady year-on-year increase of 11.5% in Q2 2023, children’s smartwatches did even better, recording a 12.5% increase and signaling a shift in market demand towards the youngest demographic. There also appears to be a reinvigoration of smart wristbands, which had a 20.9% year-on-year increase.

Source: Global Web Index

Who’s leading the race? Unsurprisingly, Huawei, Xiaomi, and Apple continue to dominate the Chinese market, each leveraging its own brand recognition, product range, and pricing strategies.Huawei remains the leading brand in both segments, neck-and-neck with Apple in smartwatches and Xiaomi in smart wristbands. During the 2023 Mobile World Congress (MWC) in Barcelona, Huawei presented two experimental smartwatches, one of which was the Watch Buds, designed to store earphones inside the watch display.It’s worth noting that usage of smartwatches and smart wristbands is evolving beyond traditional health and fitness tracking to include areas of smartphone utility. According to a 2022 survey by Rakuten Insight, more than 30% of respondents claimed that they were making online payments and playing music with their smartwatches.

Source: Statista

Kids are also going crazy for smartwatches. Xiaotiancai, also known as XTC and owned by the Guangdong-based BBK Electronics, boasts the highest market share of the children’s smartwatch segment in China, thanks to Weiliao, a social messaging app exclusive to the company’s line of wearables. Weiliao lets users register as friends, exchange messages, and create groups just by placing smartwatches next to each other. For parents, smartwatches offer peace of mind, since the location of their children can be sent to their own phones in real time, and they can even listen in on them through a built-in mic. There is also the bonus of limiting broader access to the internet: many are turning to smartwatches instead of smartphones for fear of unhealthy information and addictive games.AR/VR and smart glasses are also quickly evolving, reflecting the shift in focus for wearable innovations. According to International Data Corp, the average annual compound growth rate for the Chinese AR and VR market from 2022 to 2026 will be 43.8%, compared to 38.5% globally. With China leading the AR/VR revolution, the popularity of consumer-facing smart glasses has also been on the rise, fueled by the development of affordable, comfortable, and powerful AR headsets.Local AR/VR companies in China are shaping up as notable contenders in the rapidly expanding market for VR and AR headsets. For instance, Xreal’s latest AR glasses underline the company’s commitment to user comfort and wearability, distinguishing itself for its cross-platform capabilities and an open and flexible approach to AR usage and development. Users can easily integrate Xreal AR glasses into their existing ecosystem of gaming and streaming entertainment devices, regardless of brand or platform.

Image caption: Xreal’s Air 2 and Air 2 Proemphasize comfort and cross-platform compatibility

In this era of digital health, smart medical wearable devices are an important component. The market is focused on vital signs monitoring and chronic-disease prevention and control, but an increasing senior population, rising healthcare costs, rapidly expanding manufacturing facilities, and favorable government initiatives have accelerated the growth of the medical wearable industry. According to Statista, the medical wearables market in China is expected to grow almost eightfold from 2016 to 2023, to US$3 billion. With policy barriers impeding foreign players, competition is localized though still highly competitive. In 2020, more than 2,800 new wearable companies were registered in China. New players not only include medical equipment companies but also tech companies. For example, Huawei’s Watch D has received certification as a Class II medical device from the China version of the FDA, and the smartwatch can be sold in the country with its blood pressure and electrocardiogram functionality enabled.Technological advancements in wearables will continue to drive market growth and diversification, propelled by increasing consumer adoption, in turn creating new opportunities for brand marketing. For several years, Korean eyewear brand Gentle Monster has collaborated with Huawei, recently launching the Gentle Monster × Huawei Smart Eyewear collection. In its initial release, the product sold out almost instantly, and the collaboration also sparked positive conversations on Chinese social media, with its hashtag receiving 120 million views on Weibo on the day of launch.Similarly, Yili, China’s largest dairy brand, created an innovative campaign leveraging smartwatch data, partnering with Xiaomi to launch a first-ever smart vending machine. Consumers approaching the vending machine had their health and fitness data (BMI, heart rate, and activity and sleep levels) registered and analyzed via their Mi Watch. The machine then dispensed the Yili product that best catered to their nutritional needs. On an ongoing basis, users were able to access Yili beverage suggestions directly from their watch, as well as information on where to purchase, shortening the path to purchase for the consumer.

Source:Yili official Weibo

Whilst wearable marketing applications remain nascent, brands can use a first-mover advantage to cement their place in innovation, as demonstrated by Gentle Monster and Yili. At the same time, a more multidimensional and collaborative approach to innovation will fuel more use cases. Interoperability will also be key to unlocking more opportunities, enabling the connectivity of wearable devices with other areas of IoT application and ensuring a more seamless integration into existing ecosystems.

Author：Sharon Soh

Chief Planning & Audiece Officer

UM APAC