Market Insights Advertising & Media AR & VR

AR Advertising - China

China

The AR Advertising market in China is expected to witness a significant growth in revenue, reaching a projected value of €1.1bn in 2024.
This indicates a positive trajectory for the market within the country.
Furthermore, the market is expected to maintain an annual growth rate of 9.44% (CAGR 2024-2029), resulting in a projected market volume of €1.7bn by 2029.
In line with this growth, in the United States is projected to generate the highest revenue in the AR Advertising market, with a projected market volume of €1,135.0m in 2024.
This highlights the dominance of the United States in this market segment.
China is leading the way in AR advertising, with its innovative use of augmented reality technology in digital marketing campaigns.

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Analyst Opinion

The AR Advertising market in China has been experiencing significant growth in recent years, driven by changing customer preferences and the increasing adoption of augmented reality technology.

Customer preferences: Chinese consumers are increasingly seeking immersive and interactive experiences, and AR advertising provides a unique way for brands to engage with their target audience. AR ads offer a more engaging and personalized experience compared to traditional advertising formats, allowing consumers to interact with virtual objects in real-world environments. This interactive nature of AR advertising appeals to the tech-savvy Chinese population, especially the younger generation who are more open to embracing new technologies.

Trends in the market: One of the key trends in the AR Advertising market in China is the integration of AR technology into popular social media platforms. Platforms like WeChat and Douyin (known as TikTok outside of China) have introduced AR features that allow users to create and share AR content, including AR filters and lenses. This has opened up new opportunities for brands to reach a wider audience through AR advertising on these platforms. Another trend is the use of AR in offline retail experiences. Many brick-and-mortar stores in China are incorporating AR technology to enhance the shopping experience. For example, customers can use their smartphones to scan QR codes or markers in the store to access AR content, such as virtual try-on for clothes or virtual product demonstrations. This integration of AR into physical retail spaces not only attracts customers but also provides valuable data and insights for brands.

Local special circumstances: China's large population and growing middle class present a significant market for AR advertising. With over 900 million internet users and a high smartphone penetration rate, brands have a vast audience to target through AR ads. Additionally, China's strong e-commerce ecosystem and digital payment infrastructure make it easier for brands to monetize AR advertising and drive sales. Furthermore, the Chinese government has been actively promoting the development of AR technology through various initiatives and policies. This support from the government has created a favorable environment for the growth of the AR Advertising market in China, attracting both domestic and international players to invest in AR technology and advertising.

Underlying macroeconomic factors: China's strong economic growth and increasing disposable income have contributed to the growth of the AR Advertising market. As consumers become more affluent, they are willing to spend on innovative and immersive experiences, including AR advertising. Additionally, the rapid development of China's technology sector and the presence of major tech companies like Alibaba and Tencent have helped drive the adoption of AR technology and its integration into advertising strategies. In conclusion, the AR Advertising market in China is experiencing growth due to changing customer preferences, the integration of AR technology into popular platforms, the use of AR in offline retail experiences, China's large population and growing middle class, government support, and underlying macroeconomic factors. As the market continues to evolve, we can expect to see further advancements in AR technology and more innovative applications of AR advertising in China.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on AR advertising revenue, which includes pop-up advertising displayed in social media apps, gaming apps, and eCommerce apps as well as advertising that is integrated into the virtual world.

Modeling approach / market size:

The market size is determined through a top-down approach. We use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country-specific industry associations, such as consumer spending, internet penetration, 4G coverage, and historical developments.

Forecasts:

We apply a variety of forecasting techniques, depending on the behavior of the relevant market. For instance, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).