China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013
Increasing Education Needs Disposable Income Growth versus Household Education Spending Education spending will grow faster than incomes overall creating a significant opportunity for tools that capitalise on Finlands lead in education, tech and gamification China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013
Social Media-Integrated Rich Mobile Entertainment Figure source: iResearch There are more than 500 million online smartphone users in China. Of the 14.7% of Chinese smartphone users who paid for an app in the first half of 2013, 63.7% paid for a game, more than double the next highest category. Chinese consumers lifestyles are ideally suited to mobile entertainment, with a high portion of public transport users, and a low percentage doing out-of- home evening activities such as sports and going to the pub. Over the next 2-5 years, the mobile gaming industry will grow at a faster rate than mobile penetration overall. China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013
Soaring Staff & Operational Costs for Businesses Wage Inflation in China Figure source: The Ministry of Labor and Social Security for the PRC Labour costs in China are rising more than 10% a year. Related costs such as office rental are also mounting, with Beijing now the forth most expensive location in the world. Chinese businesses are increasingly moving away from low-skilled industries such as low cost manufacturing and focusing on higher value sectors. The shift to efficient workplaces in China over the next 2-5 years presents significant opportunities for Finnish businesses who provide technical solutions that meet the need. China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013
The Trend Towards Wearable Technology Wearable Tech Expected Uses by Chinese Figure source: Baidu A Baidu survey discovered 93% of Chinese Internet users were aware of wearable technology, with 75% willing to purchase, although the industry is still in its infancy. Whilst wearable tech is not a essential pressing need in China, Chinas large population and love of gadgets presents a significant niche well suited to Finlands tech and sporting strengths. China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013
In-Car Telemetry Integration with Everyday Lives China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013 The China auto industry has become the largest in the world. China is forecast to buy half of the worlds new cars by 2020. Chinas smartphone usage amongst the middle class who own cars is among the highest in the world, leading to increasing consumer demand for integrated in-car technology. New Vehicle & In-Car Telemetry Sales in China (Millions of Units) Figure source: BAIH, NBS China, CAAM, IHS
Rising Independent Travellers China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013 Outbound Chinese Tourists Figure source: CORTI, CNTA, CTA, CLSA More Chinese tourists are going overseas every year. In 2012, 83 million Chinese travelled internationally, growing to 94 million in 2013. Although Chinese have traditionally joined tour groups on overseas trips, an increasingly confident traveller wanting new and unique experiences is travelling independently. The majority of these tourists will have a smartphone, ensuring that there will be a significant market for mobile tools that meet the unique needs of Chinese travellers
The Worsening Likelihood of Ill Health China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013 China's Worsening State of Health Health is already an industry of primary importance in China, and will continue to grow over the next 2-5 years based on current trends, presenting significant opportunities for Finnish companies. Health is the number 1 concern for affluent Chinese. Saving money to cover future health issues is the top reason for Chinas high saving rates. By 2019, increasing ailments and awareness of health will create significant opportunities for healthtech tools and products. Demand for proactive solutions, online/app developers and smartphone accessories will also rise. Cancer, diabetes, obesity, infertility, premature births and antibiotic usage rates are all soaring, attributed to rising pollution, food safety issues, increasingly stressful urban lifestyles and an aging population.
Smarter Environmental Intelligence China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013 Daily Average PM2.5 Pollution 2013 China's Worst 10 Cities Figure source: China's Ministry of Environmental Protection, ALA, WHO Chinas environment is among the worst in the world Just 1% of Chinas 700 million urban dwellers breathe air considered safe by the European Union. 90% of Chinas cities groundwater is polluted to some degree Rising non-renewable electricity consumption and car usage will continue to worsen pollution levels over the next 2-5 years. Tools that can measure, monitor and address Chinas pollution at any level stand to significantly benefit.
Food Production Corporatisation China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013 Food Consumption Trends in China Figure source: SSBc As a key Government focus, there will be significant investment into efficient farming in China, creating large opportunities for synergies between heavy machinery manufacturers and tech companies. Part of this shift will be the trend moving away from small individual farmers to company-operated farms, who will start to utilise connected technology to monitor and produce food more efficiently over the next 2-5 years. Chinas rising middle class are eating more food every year, with China forecasted to account for almost half of the global increase in food demand between now and 2050.
The Food Safety Movement China's Future Signals Looking 2-5 Years Ahead China Skinny 3/2013 China's Food Safety Issues & Sentiment Figure source: PEW Research Finnish tech firms have opportunities from both B2B standpoint, such as agricultural technology and processes, and B2C such as tech developers and food producers working together to create competitive advantages selling to Chinese consumers through smartphone and web tracking of food origins, to packaging. Chinas infamous 2008 melamine dairy scandal brought Chinas abysmal food safety standards to light. Social networks and state media have raised awareness further and as consumers become wealthier, they are demanding safer food.
Macro view on manufacturing Shifting landscape from 1970 to 2009 Renewing manufacturing in China including the industrial internet. China Materialia 3/2014.
Macro view on manufacturing Since 2010, China is first in total value added from manufacturing Rank Country/Region (Millions of $US) Year World 9,963,056 2010 1 China 1,924,961 2010 2 United States 1,800,500 2011 3 Japan 1,091,175 2011 4 Germany 610,184 2010 5 South Korea 315,885 2012 6 Italy 306,196 2010 7 Russia 260,435 2012 8 Brazil 253,642 2012 9 France 253,608 2009 10 India 235,248 2012 11 United Kingdom 229,615 2010 12 Indonesia 210,176 2012 13 Mexico 198,199 2012 14 Spain 172,433 2009 15 Canada 169,120 2008 16 Thailand 124,345 2012 17 Turkey 122,743 2012 18 Australia 108,163 2012 19 Argentina 84,360 2012 20 Poland 76,421 2010 http://data.worldbank.org/indicator/NV.IND.MANF.CD/countries/1W?order=wbapi_data_value_2010%20wbapi_data_value&sort=desc&display=default Renewing manufacturing in China including the industrial internet. China Materialia 3/2014.
Various manufacturing sectors evolve differently The manufacturing sector should be subdivided into various categories when thinking about trends. Looking at China, we use the following 9 categories: - Aerospace and defense - Automotive and transportation - Chemicals and process industries - Telecommunications - Energy, Utilities and Mining - Forest, paper and packaging - Metals - Information technology - Semiconductors and electronics 1 2 3 4 5 6 7 8 9 10 2014 2016 2018 2020 2022 2024 GlobalCompetitiveness Year Aerospace and defense Automotive and transportation Chemicals and process industries Telecommunications Energy, Utilities and Mining Forest, paper and packaging Metals Information technology Semiconductor and electronics Renewing manufacturing in China including the industrial internet. China Materialia 3/2014.
China goes from low-cost to high-quality manufacturer 5-Year Plan contains clear direction. more emphasis on value added manufacturing across seven priority industries: new energy, energy conservation and environmental protection, biotechnology, new materials, new IT, high-end equipment manufacturing, and clean energy vehicles. It is thus a national economic imperative to move up the value chain, and multinational companies have been quick to grasp the opportunities that Chinas economic evolution pr