AV Magazine
Pro AV is returning gradually along with the overall recovery of the Chinese economy from localised regional lockdowns, but will its zero-Covid policy hinder this recovery?
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The tiger is considered the king of all animals in
Chinese mythology and, auspiciously for the current lunar year, the water tiger
symbolises courage, confidence, vitality and strength.
That is evident in the recovery of the domestic pro
AV industry in China since the easing of lockdowns in many parts of the
country. Live events and large-scale performances for cultural development and
nighttime tourism have gradually resumed, leading to a surge in demand for AV
hardware and software.
“There are effective measures in place to keep
Covid case numbers under control,” says April Qin, director of sales for China,
enterprise, Christie. “As a result, economic activities can still be carried
out normally and this leads to the sustained growth of the pro AV industry.”
Her colleague, executive vice-president,
enterprise, Michael Bosworth has got his eye on global supply chain issues.
Most of the world’s semiconductor makers are in South East Asia. “Ongoing chip
shortages are likely to affect the economic situation if manufacturers are
unable to ramp up production even though there is demand,” he says.
Notwithstanding supply chain restraints and the
ongoing pandemic, the overall economic situation is likely to remain buoyant.
This augers well for the pro AV market.
The economic situation may not return to its pre-pandemic status in the next
12-18 months, but it will be 80 per cent higher than it was during the
pandemic, calculates be Charles Wang, General Manager, Lightware Visual
Engineering – China.
William Liu, sales director, Guangzhou Mindo,
Clear-Com’s local partner reckons the market should return to normality in the
same timeframe.
The World Bank expects the Chinese economy to grow
at 5.1 per cent in 2022. Although the figure is modest compared to the eight
per cent growth recorded in 2021, analysts are expecting China’s economy to
power ahead in 2023 and beyond.
Régis Cazin, CEO of Arbane Groupe (APG and Active
Audio) strikes a more cautious note. “It is hard to predict what will happen,
because a zero-Covid strategy might limit the economic growth in general and
pro AV investments. I suspect the next eighteen months in China could be
challenging for our industry.”
Tourism on a high
The pandemic has promoted a rise in command-and-control rooms to be set up or
upgraded across the country for Covid-19 contact tracing, crisis and disaster
management, defence and domestic security. There’s also demand for AV
technologies in museums as more are built or refurbished.
Another noteworthy segment is the night tourism
industry, about which accounts vary. Cazin reports the night club industry to
have stopped virtually all investments and that these will start again only
when the Chinese government loosens restrictions on this sector. Qin says it flourished
following Covid rule relaxations. “Tourist attractions typically operate in the
day, however due to travel restrictions, there is strong demand for more
leisure activities at night in local cities and towns,” she reports. “This has
led to attractions and shows featuring compelling storytelling using projection
mapping which are widely applied around the country.”
As elsewhere, more people are being enabled to work
from home beyond the immediate health crisis with VC playing a huge role. Simon
Chin, sales director, Asia Pacific at Konftel says the government is promoting
the use of video or remote conferencing to enhance productivity and service
levels and reduce personal contact.
“Due to extensive and substantial promotions by
cloud solutions providers Tencent, Huawei, Zoom and Webex this has developed
many sales channels for cloud solutions including video conferencing.
He adds: “Hybrid working between homes and office
is the biggest growth area in a still uncertain Covid world. Going forward we expect
more video meetings will take place across more locations, as even when people
return to offices in larger numbers not everyone will be present in the same
room.”
He also expects more demand for facial recognition,
voice recognition and other AI capabilities in products, including video
conferencing.
Chinese brands power up
According to Liu, the vast majority of Chinese consumers perceive brands in
terms of quality and innovation, and not on price alone. “Trust comes from the
long-established reputation in the market, rather than just the brand’s country
of origin,” he says. “Chinese and non-Chinese brands can win market share as
long as they can win the trust of users.”
Bosworth concurs: “Non-Chinese pro AV brands are
widely seen as technology leaders as they have a long history in this industry…
these products are considered to be premium and able to add more value to end
users.”
While high-end, imported brands like Extron,
Crestron, AMX and Christie have an established presence in China the market is
very difficult to crack for new brand imports.
“The status of a brand in the hearts of users is
difficult to change,” says Xue. “In recent years, due to policy reasons, the
market share of domestic brands has improved. Growing functionality and high
quality performance have begun to take the market share of many imported
brands.
He adds that larger private firms prefer to use
imported brands, while smaller companies prefer cheaper local brands. “The
government, military, state-owned enterprises and government enterprises almost
all adopt domestic brands, which is a policy requirement that cannot be
changed.”
Chin also reports the growth in local brands and a
video conferencing market “much more competitive and challenging” as a result.
This could be accelerating, perhaps as a result of
the deteriorating political relationship with the west. “We’ve noticed that
preference was given to Chinese products for all government projects,” says
Cazin. The country seems to be taking a more protectionist approach, which is a
bit ironic considering that it is often dubbed the factory of the world.
He adds: “There is still room for growth in China,
but it will become harder and harder against local competitors. Innovation,
quality, international notoriety and the aesthetic of products will be the key.
And of course, finding the right partners locally.”
Multi-media artistic expression
The opening ceremony of the Beijing Winter Olympics is a prime example of AV
technology and artistic beauty combining to show off the country. It’s also one
of a growing number of applications using lighting and interactive features
between performers and audiences during major events.
Christie expects such technologies to play a
greater role in the planning and execution of large-scale events and permanent
spaces going forward. Among these are science centres and giant domes, such as
those in Wuhan, Hefei, Shenzhen and Dunhuang, using light shows to deliver
engaging visual experiences to guests.
“These venues have chosen RGB pure laser technology
because they require projection systems that can produce the brightest images,
the purest colours and 3D effects to deliver,” says Qin. “We are seeing more
original creations and innovations in applications. Content creators and
designers are no longer following trends from the West. They are generating
their own content that is unique to China and are able to strike a chord with
global audiences.”
Most AV projects are distributed in Beijing
(political centre), Shanghai (financial centre) Shenzhen and Xiongan (key
economic development cities), Nanjing, Xian, Guangzhou and, Chengdu. These tend
to attract “more high-income young people,” says Liu, “who are both thoughtful
and dynamic and who will become the participants and consumers of AV
activities.”
Qin says distributors and customers “are always
thinking out of the box”, while Xue describes pro AV culture as “more
localised, multifunctional, and software-based.”
He says: “China has experienced stages of rapid
development and a large number of exhibition and conference centre projects,
and high-end hotels have emerged in most first-tier cities. A large number of
AV products are used in these giant-scale, video signage projects, and we’ve
seen AV-over-IP products becoming widely used also.”
The Asian Games in Hangzhou this September is the
next major international sports event, although esports is now a national
obsession. “League of Legends, Glory of Kings, and esports competitions in
regional cities will drive the AV market to recover more quickly,” says Liu.
That feeds into China’s media and entertainment
industry which is forecast by PWC to reach $436.8 billion in revenue by 2025.
During this time, the sector’s CAGR of 5.1 per cent will be higher than the
global rate of 4.6 per cent, with China leading the world in average revenue
growth in VR, OTT video, and online advertising.
“As media consumption habits in China are shifting
more towards on-demand content such as films, live webcasts and online
concerts, demand for solutions like augmented and extended reality (AR and xR)
within broadcast and film production is surging,” says Deva Peng who runs the
China operation for disguise which recently opened a new head office in Beijing
equipped with an XR stage featuring ROE LEDs. The company’s latest software
release, r20, comes in Simplified Chinese to further enable local language to work
on complex productions. Chinese users can also access translated training
materials and user manuals.
“There is a huge market size waiting to be
explored,” adds Peng.
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