China’s smart city market is expected to reach $10,8-billion in 2013, representing an increase of 18,5% compared to the previous year, says IDC
This is one of the key findings of IDC’s China 100 Smart Cities Evaluation and Recommendation: Penetrating the Appropriate Target Cities Is Key.
In it, IDC identifies target cities with more market opportunities, larger market space and development opportunity based on the maturity level of city informatisation and regional characteristics.
In addition, IDC integrated the construction, upfront investment and competition situations of provincial city circles into its findings to create a Smart City Evaluation Index System that provides decision-making support for vendors who are considering to expand into specific target cities.
Sun Xihai, Senior Research Manager, Smart City Research, IDC China, says: “When adopting smart city solutions in China, vendors need to penetrate the appropriate strategic emerging industries in accordance with different city development strategies, and bring its own advantages into full play to provide smart city solutions that can solve the practical problems of the target cities.”
The research offers the following advice for vendors to penetrate the appropriate target cities:
* Second- and third-tier cities are good choice for gold panning while first-tier cities need to be selectively penetrated. The construction of smart cities in China varies greatly across different regions, with cities in east and south China taking a lead. However, the market focus has been gradually shifting to cities in west and north China, which is in accordance with the centralised construction of the national e-government system. From the perspective of city size, second- and third-tier cities are gradually becoming popular destinations for smart cities, and major vendors are starting to penetrate these underdeveloped small and medium sized cities where the competition is not as fierce.
* Understand the characteristics and demand of target cities and actively participate in their top level planning. IDC recommends cities that are strong in various business processes for vendors, such as Shenzhen and Nanjing (with a focus on reform and innovation), Wuhan and Ningbo (with a focus on the development of smart industries), Foshan (with a focus on improving services related to the quality of life of citizens), Shanghai and Hangzhou (with a focus on strengthening the construction of smart infrastructure), and Chengdu and Chongqing (with a focus on committing to the development of culture and life).
* MNCs cooperate with local integrators and take advantage of their international experience. Though the construction model of foreign smart cities may not be directly applicable to China, Chinese municipal governments would still be able to learn from foreign government experience. Therefore, MNCs with experience in the planning and construction of foreign smart cities will be welcomed by local municipal governments.