Virtual reality-related revenues are rising rapidly in China. According to Analysys International, revenues from VR hardware, software content and other services in China will grow 372.2% in 2016 to reach RMB850.0 million ($136.5 million). They are forecast to increase a further 154.1% in 2017 to pass the RMB2 billion ($321.1 million) mark, as explored in a new eMarketer report, “Virtual Reality Technology in China: Opportunities and Challenges in an Emerging Market.”

A study by International Data Corporation (IDC) predicts VR device shipments in China will grow 476% in 2016 to nearly 483,000 units, driven by shipment gains by homegrown players and by device launches from several international firms. Shipments are expected to expand by another 140% in 2017 to 1.16 million units.

Other forecasts are even more optimistic. Canalys, for one, expects global VR headset shipments alone to reach at 6.3 million in 2016, with China accounting for 40% of the total—equivalent to 2.52 million units.

VR device shipments will add fuel to fast-rising but still very modest levels of VR device uptake in China. iResearch Consulting Group predicts the country will be home to just over 1.4 million VR device users in 2016, with 1.35 million using smartphone-enabled devices (e.g., Google Cardboard, Samsung Gear, Baofeng Mojing) and 0.08 million users combined using PC-connected helmets (e.g., HTC Vive and Oculus Rift) or standalone devices (e.g., Ling VR). The firm predicts that smartphone-enabled devices will continue to lead in devices used, but PC-connected and standalone device adoption will grow at a faster clip between 2018 and 2020.

China has a rapidly growing middle class, with money to spend and an inclination to do so. In particular, the country’s Post-80s and Post-90s generations (collectively ages 16 to 36) have shown a healthy appetite for exploring new technology. They are open to trying out new things in order to broaden their horizons and enhance their quality of life. And when it comes to VR, they appear willing to jump in.

A May 2016 survey of internet users in China by HTC found 49% of survey respondents who planned to purchase a VR device within the next 6 months were ages 25 to 34. That figure outstripped the 19% rate among respondents overall.

In an April 2016 survey by China Youth Daily of internet users in China ages 17 and older, of which 75% of respondents were between the ages of 17 to 36, 78.5% of respondents said they would proactively seek out virtual or augmented reality products to try.

The VR implementations that internet users in China were most excited about were digital video, gaming and social, according to a January 2015 survey conducted by iResearch Consulting Group. Other notable VR uses respondents looked forward to included watching competitions and events and for education and learning.

In China Youth Daily’s study, the top three VR or AR applications internet users in China were most excited about were for travel and shopping, education and entertainment.

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