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Wearable Technology - China - December 2016

“Health monitoring is the major appeal of smart wristbands and smartwatches, and family-related features show potential to attract purchase. Brands should offer unique functions and entry-level products to motivate purchase. VR/AR technology can be an effective marketing communication channel to draw consumers’ attention.”

- Terra Xu, Senior Research Analyst

This report will cover the following areas:

  • What do consumers look for in wearable devices?
  • Overcoming the purchase barrier of smart wristbands and smartwatches
  • VR’s current role is still more in brand marketing and experience

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
        • Demographic classifications
          • Personal income
            • Household income
            • Executive Summary

                • The market
                  • Smart wristbands grow while smartwatches drop
                    • Figure 1: Volume sales of smart wristbands and smartwatches in China, 2015 - 2016
                  • Low-priced wristbands drive growth, while smartwatch market lacks breakthrough products
                    • Companies and brands
                      • Xiaomi and Apple dominate, and Huawei and Samsung offer both wristbands and watches
                        • Low-priced VR headsets attract trial while high-end devices better educate consumers
                          • Innovation highlights
                            • The consumer
                              • Who owns wearable devices?
                                • Who intends to buy wearable devices?
                                  • Xiaomi and Apple take the lead across tier one, two and three cities
                                    • Leading brands’ wearables and smartphones users show similar age and gender profile yet different income and city tier profile
                                      • Figure 2: Brand penetration of smart wristband and smartwatch, September 2016
                                    • Functions and price are major barriers for wearable devices
                                      • Figure 3: Purchase barriers for different wearable devices, September 2016
                                    • Health function is major appeal, especially family monitoring features
                                      • Consumers of different ages show different level of interest in product features
                                        • Figure 4: Attractive product features, September 2016
                                      • High interest in various applications of VR
                                        • Figure 5: Interest in VR application, September 2016
                                      • Consumers prefer technology brands over sports brands
                                        • Buying for themselves, rather than for gifting
                                          • Rental services appeal to 20-24-year-olds
                                            • Figure 6: Attitudes towards wearable devices, September 2016
                                          • Virtual trial does not necessarily lead to purchase
                                            • Figure 7: Attitudes towards VR technology, September 2016
                                          • What we think
                                          • Issues and Insights

                                            • What do consumers look for in wearable devices?
                                              • The facts
                                                • The implications
                                                  • Overcoming the purchase barrier of smart wristbands and smartwatches
                                                    • The facts
                                                      • The implications
                                                        • VR’s current role is still more in brand marketing and experience
                                                          • The facts
                                                            • The implications
                                                            • The Market – What You Need to Know

                                                              • Smart wristbands grow while smartwatch growth drops
                                                                • Low-priced smart wristbands drive volume growth
                                                                  • Lack of breakthrough products and high price drags on smartwatch market
                                                                  • Market Size and Segmentation

                                                                    • Smart wristbands grow while smartwatches drop
                                                                      • Figure 8: Estimated unit sales of smart wristbands and smartwatches in China, 2015-2016
                                                                    • Value growth hindered by drop in smartwatches and lower wristband price
                                                                      • Figure 9: Estimated value sales of smart wristbands and smartwatches in China, 2015-2016
                                                                    • Smart wristbands taking up greater share in both volume and value
                                                                      • Figure 10: Volume and value share of smart wristbands and smartwatches in China, 2015-2016
                                                                  • Market Factors

                                                                    • Low-priced smart wristbands drive volume growth
                                                                      • Lack of breakthrough products and high price drags on smartwatch market
                                                                        • Replaceable functions are potential growth barrier
                                                                        • Companies and Brands – What You Need to Know

                                                                          • Xiaomi leads due to affordability
                                                                            • Apple tops smartwatch market with challenges ahead
                                                                              • Huawei and Samsung benefit from a balanced product portfolio
                                                                                • VR and AR hardware is still in early stage of commercialisation
                                                                                  • Innovation highlights
                                                                                  • Key Players

                                                                                    • Smart wristbands and smartwatches
                                                                                      • Xiaomi leads in smart wristband due to low-priced products
                                                                                        • Apple leads the smartwatch market but faces challenges
                                                                                          • Huawei and Samsung benefit from comprehensive product lines
                                                                                            • Lifesense and Genius emerging in the market
                                                                                              • VR/AR technology
                                                                                                • Low-priced headsets attract trial while high-end devices can better educate consumers
                                                                                                  • Key players in VR/AR hardware market – HTC, Oculus and more
                                                                                                    • VR experience stores
                                                                                                      • No leaders yet in VR content providers
                                                                                                        • Figure 11: Examples of companies offering VR content, 2016
                                                                                                    • Who’s Innovating?

                                                                                                      • More types of wearable technology
                                                                                                        • Wearable devices for more people
                                                                                                          • More applications of VR/AR technology
                                                                                                          • The Consumer – What You Need to Know

                                                                                                            • Wearable device owners tend to be younger, and there is opportunity in tier two and three cities
                                                                                                              • Entry-level products are important to building trial
                                                                                                                • Xiaomi and Apple take the lead
                                                                                                                  • Functions and price are major barriers for wearable devices
                                                                                                                    • Health monitoring feature is major appeal, especially family functions
                                                                                                                      • Consumers of different ages show varied interest in product features
                                                                                                                        • High interest in various applications of VR
                                                                                                                          • Consumers prefer technology brands, and they are more likely to buy wearable devices for themselves
                                                                                                                            • Virtual trial does not necessarily lead to purchase
                                                                                                                            • Ownership and Purchase Intention

                                                                                                                              • Who are the owners of wearable devices?
                                                                                                                                • No significant gender difference among owners of wearable devices
                                                                                                                                  • Young consumers are more likely to own wearable devices
                                                                                                                                    • Figure 12: Owners of wearable devices, by age and gender, September 2016
                                                                                                                                  • Opportunity in tier two and three markets
                                                                                                                                    • Figure 13: Owners of wearable devices, by city tier and monthly household income, September 2016
                                                                                                                                  • Who intend to buy wearable devices?
                                                                                                                                    • More females intend to buy smart wristbands
                                                                                                                                      • Entry-level products are important to building trial
                                                                                                                                        • Figure 14: Purchase intention of different wearable devices, by gender and age, September 2016
                                                                                                                                    • Brand Penetration

                                                                                                                                      • Xiaomi and Apple lead in smart wristbands and smartwatches respectively
                                                                                                                                        • Not all consumers can differentiate smart wristbands and watches
                                                                                                                                          • Figure 15: Brand penetration of smart wristband and smartwatch, September 2016
                                                                                                                                        • Age and gender profile of leading brands is similar to smartphones
                                                                                                                                          • Figure 16: Users of leading smart wristband and smartwatch brands, by age and gender, September 2016
                                                                                                                                        • Apple appeals to a wider income group and Huawei is more popular in lower tier cities, when compared with the smartphone market
                                                                                                                                          • Figure 17: Users of leading smart wristband and smartwatch brands, by city tier and monthly household income, September 2016
                                                                                                                                      • Purchase Barriers

                                                                                                                                        • Wearable devices should not be seen as a small version of smartphones
                                                                                                                                          • Price is important for smartwatches, smart jewellery and smart clothing
                                                                                                                                            • Figure 18: Purchase barriers of different wearable devices, September 2016
                                                                                                                                          • Functions, price and appearance are major purchase barriers for smart wristbands among young consumers
                                                                                                                                              • Figure 19: Purchase barriers of smart wristbands, by demographics, September 2016
                                                                                                                                            • Among males and those in their 20s, function is a major purchase barrier for smartwatches
                                                                                                                                              • Figure 20: Purchase barriers of smartwatches, by demographics, September 2016
                                                                                                                                          • Attractive Product Features

                                                                                                                                            • Health monitoring is still the most needed function
                                                                                                                                              • Consumers are interested in connecting wearables to other devices
                                                                                                                                                • Figure 21: Attractive product features, September 2016
                                                                                                                                              • To appeal to consumers of different age groups…
                                                                                                                                                • Current smart wristband and smartwatch owners seek improvements
                                                                                                                                                  • Figure 22: Attractive product features, by ownership and purchase intention of smart wristband and smartwatch, September 2016
                                                                                                                                              • Interest in VR Applications

                                                                                                                                                • High interest in various applications of VR
                                                                                                                                                  • What are the most appealing VR applications?
                                                                                                                                                    • Figure 23: Interest in VR application, September 2016
                                                                                                                                                  • Males and females show different areas of interest
                                                                                                                                                    • Figure 24: Interest in VR application, % of very interested and somewhat interested, by gender, September 2016
                                                                                                                                                  • Parents are interested in children’s entertainment and learning with VR
                                                                                                                                                    • Figure 25: Interest in VR application, % of very interested and somewhat interested, by household with and without children, September 2016
                                                                                                                                                • Attitudes towards Wearable Technology

                                                                                                                                                  • Consumers prefer technology brands over sports brands
                                                                                                                                                    • Buying for themselves, rather than for gifting
                                                                                                                                                      • Buying for functions instead of following latest trends
                                                                                                                                                        • Affordable products, rather than rental services
                                                                                                                                                          • Figure 26: Attitudes towards wearable devices, September 2016
                                                                                                                                                        • Males and those with high MHI would buy wearables for themselves
                                                                                                                                                          • Offering detailed information for gifting options
                                                                                                                                                            • Figure 27: Attitudes towards wearable device purchase, by gender and MHI, September 2016
                                                                                                                                                          • Young consumers are more likely to be attracted by rental services
                                                                                                                                                            • Figure 28: Attitudes towards wearable device renting, by age, September 2016
                                                                                                                                                          • Virtual trial does not necessarily lead to purchase
                                                                                                                                                            • Figure 29: Attitudes towards VR technology, September 2016
                                                                                                                                                        • Meet the Mintropolitans

                                                                                                                                                          • Mintropolitans are more interested in family monitoring and exercise tracking features
                                                                                                                                                            • Figure 30: Attractive product features, by consumer classification, September 2016
                                                                                                                                                          • What VR applications are Mintropolitans interested in?
                                                                                                                                                            • Figure 31: Interest in VR application, by consumer classification, September 2016
                                                                                                                                                        • Appendix

                                                                                                                                                          • Methodology
                                                                                                                                                            • Abbreviations

                                                                                                                                                            Companies Covered

                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                            Wearable Technology - China - December 2016

                                                                                                                                                            £3,235.48 (Excl.Tax)