AV Magazine
In 2022, Beijing is set to become the first city in the world to have hosted both the summer and winter editions of the Olympic Games. The games will be held in February when the city’s average temperature is well above freezing. Not even the nearby Yanshan Mountains are expected to have enough snow. Previous Olympics in Sochi and PyeongChang augmented the real thing with man-made flakes but China will fulfil its vision of a ‘Joyful Rendezvous upon Pure Ice and Snow’ with more fake stuff than any event before it.
You can take that as symbolic of the ‘can do’ attitude of a state transforming itself and the global economy (along with the planet’s climate) with the most ambitious manufacturing programme the world has ever seen.
A recent downturn in growth and an accumulation of debt (running 254 per cent in 2017 according to the IMF), may be unnerving some economists but has hardly put a brake on AV investment.
“We’re seeing explosive growth in the pro AV market across China,” reports Robert Stacy, Asia Pacific GM at AJA Video Systems.
According to the 2018 AV Industry Outlook and Trends Analysis summary by AVIXA, the local industry will be worth U$230 million by 2023.
“The AV sector is very progressive and has grown substantially over the last decade,” says Ellen Shi, marketing manager for China at visualisation products vendor, disguise.
Growth is being driven by a number of factors including mega-scale infrastructure projects; cultural changes in education and entertainment; the rise of esports and wireless 5G; and a continued evolution of smartphones and the internet.
“All of these developments are setting the stage for new opportunities, while at the same time encouraging industries to embrace audio and video, and to upgrade from traditional, legacy mediums to digital,” Stacy says.
Brandi Zhu, country manager for Kramer Electronics, says the pro AV boom in China began about 10 years ago when a majority of AV solutions were foreign brands. “Now, there are more and more Chinese brands which have grown fast and become strong brands in the past few years. The Chinese market is very diverse now, and the competition is also very fierce. To remain competitive in this market, a company has to develop various new products aggressively to match multiple market needs.”
Market preconceptions
Two preconceptions tend to dominate ideas of doing business in China. That it’s a price driven market with local brands likely to undercut foreign imports; and that there’s a necessity for overseas firms to actively collaborate with a Chinese one on the ground.
Two preconceptions tend to dominate ideas of doing business in China. That it’s a price driven market with local brands likely to undercut foreign imports; and that there’s a necessity for overseas firms to actively collaborate with a Chinese one on the ground.
Michael Austin, director of sales (APAC) at Datapath, says Chinese customers have a ‘good enough’ attitude towards products and solutions. “They tend to be primarily interested in whether a solution works ‘well enough’ and can meet the primary technical requirements, rather than whether there are additional features and functions that could improve usability or simplify solution setup. That said, there is certainly a smaller number of high-end projects where customers demand the best regardless of country of origin.”
Foreign AV firms are likely to struggle to compete on price with local products that can, at a basic level, accomplish some of the same technical tasks.
“There is usually openness towards foreign products, but the actual interest level and likelihood of buying will depend significantly on whether there are any acceptable or comparable local alternatives,” Austin says. “It is essential to identify your product’s unique capabilities, distinguish between those that attract interest rather than being deemed ‘beyond what is good enough and therefore just adding cost over local solutions’, and then actively promote the former,” advises Austin.
In most cases non-Chinese pro-AV companies are achieving “small to medium-sized business” in China, he reports, through distribution or through small local teams working with distribution and/or system integrators. “Investing in a local team essentially requires joint investment with a local Chinese company,” he adds.
“Naturally we are keen to promote our own brand, but most of what we broadly categorise as Command & Control’ – but can include utilities, telecommunications – are government projects. In some cases the videowall controller effectively must be ‘made in China’.”
Local vs imported product
Most observers agree that it’s a fiercely competitive landscape. “Consequently, it is important to innovate, remain price competitive and ensure you provide excellent support,” says Stacy.
Most observers agree that it’s a fiercely competitive landscape. “Consequently, it is important to innovate, remain price competitive and ensure you provide excellent support,” says Stacy.
That sound advice is not necessarily unique to China, of course. Another truism common to most markets is that the smaller the technical gap between local products and imported ones, the more that local support could become an issue.
“Even if a potential customer likes your product, they may select a local competitor with a less attractive product simply because there are more staff available for remote or on-site support,” says Austin. “Ensuring your distribution partners, OEM customers, and/or local team has adequate technical support expertise, and that they can directly provide this support directly and/or train their downstream partners in turn, is essential to ensuring end customers reach the necessary comfort level in buying your product.”
Kramer entered the China market a decade ago and has its own direct branch with sales and technical teams in the country. AJA’s strategy involves a strong distribution channel and reseller network, along with a social media presence on platforms, such as Weibo. Disguise opened a Shanghai office last year and has a reseller partner in Beijing. It also reaches customers through WeChat, a local language website, user manuals, support, and training.
“We’ve also seen the pro AV market, including major companies within that space, expand rapidly because of the increasing spending power and rising numbers of young consumers,” says Shi. “Gen Z have more spending power, are early adopters and keen learners. Social media is raising the demand for visually impactful entertainment, as more immersive entertainment experiences are gaining attention on social media sites.”
Disguise has supported projects including an Omega brand event, Hermes projection mapping and Jessie J concert touring as well as events at the Nanjing Opera and the National Games of China.
AJA sees similar growth in live events. “If the market seemed limited to government-based projects, recently we’ve seen major growth across all sectors as more streaming platforms – such as Tik Tok, Kuaishou, QiY and Youku – have come online,” says Stacy. “More sophisticated raster sizes, frame rates and deep colour workflows, including HDR, have become highly sought after for live events prompting greater demand for low latency signal connectivity.”
Mega-city AV
Unsurprisingly, most of the large, tier one system integrators are based in Shanghai, Beijing and Guangzhou because many of the large government projects for broadcasting, utilities and so on are driven from these locations. Meanwhile, the LED industry is centralised in Shenzhen, the ‘Silicon Valley’ of the global LED industry. Among them Chainzone, Novastar, Yes Tech, Absen, Unilumin Group and Leyard.
Unsurprisingly, most of the large, tier one system integrators are based in Shanghai, Beijing and Guangzhou because many of the large government projects for broadcasting, utilities and so on are driven from these locations. Meanwhile, the LED industry is centralised in Shenzhen, the ‘Silicon Valley’ of the global LED industry. Among them Chainzone, Novastar, Yes Tech, Absen, Unilumin Group and Leyard.
“These LED companies have become better and better at marketing their LED panels in overseas markets,” notes Austin.
Many of the most recognised Chinese technology brands such as Huawei, Tencent and ZTI also have their global headquarters in Shenzhen, “providing a large talent pool of trained engineers and sales professionals,” says Alex Couzins, head of brand and marketing, Absen.
Provincial city growth
Provincial capitals don’t miss out though. Chengdu, Hangzhou and Nanjing exhibit fast economic growth and increasing incomes, which means AV growth too.
“Even the most remote regions are rapidly expanding in the pro AV sector, with more access to innovative technology due to an increase in entertainment venues being built in new cities with an aim to bring multiple populations together,” reports Shi.
Provincial capitals don’t miss out though. Chengdu, Hangzhou and Nanjing exhibit fast economic growth and increasing incomes, which means AV growth too.
“Even the most remote regions are rapidly expanding in the pro AV sector, with more access to innovative technology due to an increase in entertainment venues being built in new cities with an aim to bring multiple populations together,” reports Shi.
Command and control
National security is an important concern in China. Datapath expects the overall pro AV market to grow steadily, highlighting city surveillance projects that involve massive numbers of IP cameras. “Recently China has been placing more effort on – with some success – exporting such solutions to markets outside of China,” Austin says.
National security is an important concern in China. Datapath expects the overall pro AV market to grow steadily, highlighting city surveillance projects that involve massive numbers of IP cameras. “Recently China has been placing more effort on – with some success – exporting such solutions to markets outside of China,” Austin says.
For the government and security market, policies have a significant impact on demand, reports Zhu. “The government wants to support Chinese brands, so the proportion of domestic equipment used is also growing substantially.”
For the business and corporate vertical market, she reports that customers prefer AV solutions to be “simple to configure, efficiently serviced over its lifecycle and easily managed by software.”
This year alone some 35 theme parks will open in the country, according to Zhu. “China is becoming the world’s largest theme park market. Hotels (often adjacent to theme parks) are another huge opportunity market for the pro AV industry.”
Absen spies demand for e-gaming. Its LEDs were used to create a four-sided LED display for the finale of esports tournament G·League 2018 which took place in Shanghai this January. Each side measured 16m × 9m, hung 20m above the floor and were the biggest yet for a tournament in China. The displays were used for livestreaming the game and for enhancing the fan experience.
Large-scale infrastructure projects continue to consume AV technology across the country to keep up with the explosive growth of China’s megacities, and the impact this has on the city’s energy, transportation and emergency services requirements. Couzins, for example, reports “a big spike in demand for Smart City control and command centres”.
A good example is the Longgang Operation Centre in Shenzhen, allegedly the world’s largest curved narrow pixel pitch LED screen “and one of the most technologically advanced control rooms,” he says. With a record-breaking 103 million pixels covering a 167 sq m surface area and a pixel pitch of 1.2mm, this LED videowall has the highest pixel density ever achieved (at the time of installation).
“This reinforces China’s position as a market leader, never afraid to employ or invest in the latest AV technology to achieve or meet a specific market need,” Couzins asserts.
The newly established Xiong’an New District is another example. It’s a top-down, government initiated city-building project that will see a high concentration of AV activities in the new region.
“The establishment of the Greater Bay Area in the south (Guangdong province, Hong Kong, and Macau) will see heavier investment on AI-powered technologies that will be applied to the smart city system installed in regional infrastructure,” reports Shi.
The next milestone will be the 2022 Olympics which builds from the legacy of 2008 with the Water Cube set to stage curling events, the National Indoor Stadium used for ice hockey, and the Opening and Closing ceremonies scheduled to once again take place at the Bird’s Nest.
As a result, the host budget is a relatively modest $3.9bn but the event “will certainly impact activities related to facilities throughout Beijing,” says Zhu.
A new high-speed railway, for example, will cut travel time from Beijing to Yanqing to 20 minutes, and from Beijing to Zhangjiakou to 50 minutes.
Both are resorts for alpine events and the line is due to be completed this year.
A new high-speed railway, for example, will cut travel time from Beijing to Yanqing to 20 minutes, and from Beijing to Zhangjiakou to 50 minutes.
Both are resorts for alpine events and the line is due to be completed this year.
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