The Internet of Things revolution is underway — and China is leading the way.

New research from ABI Research shows that China's IoT market will grow fivefold in the next five years, topping $41 billion by 2020. Of the countries ABI Research tracks in its IoT Market Tracker, China leads in overall revenue growth, as well as across six service sectors (connections, connection management, security, data analytics, platform and professional services).

"Driving China's IoT numbers is the smart meter segment," said Dan Shey, VP and IoT Practice Director at ABI Research. "It leads all other segments in both connections and revenues. In fact, by 2020, smart meter connections will exceed the next highest market segment in total connections by nearly 10 to 1."

Also driving the IoT market in the region is home security and automatic, OEM telematics, video surveillance, home appliances, aftermarket telematics and home monitoring.

"Interestingly, data analytics revenues will generate the most IoT revenues in China. This statistic is reflective of the sheer volume of smart meter connections," Shey said. "But it is also indicative of the relative lack of revenues in both platform and professional services in the China market. Platform revenues are not as high due to, for example, a higher share of proprietary embedded telematics deployments, especially by domestic OEM brands. Professional services revenues are similarly not as high, not only due to fewer connections in the telematics segments, with a higher proportion of tethered solutions, but also because IT and consultancy services are not as mature a market segment as in some of the more developed world markets such as Japan, South Korea and the United States."

To check out what else is HOT in the world of payments, click here.