With clearer policy direction, increased local awareness, and evolved technology, IDC Government Insights predicts that the expansion of smart city construction in China’s tier three to five cities will truly bring about a new wave of smart city growth and usher in a new height of development by 2022.
In the past seven years, China’s smart city ICT spending and success stories were mainly concentrated in the Tier one to two cities. However, there are more untapped opportunities in tier three to five cities given they account for over 85% of all the prefecture-level cities in China.
“The development path, regional objectives, and focus areas for the tier three to five cities all differ from those of the first- and second-tier cities, with the core objective of migration is to become a different type of smart city. This has led to the industrial construction diversification strategy ‘thousand cities, thousand faces’,” says Jill Zu, senior market analyst for IDC China.
Key highlights of the research include:
* The number of potential customers for tier three to five cities is almost 10 times higher than the two upper tiers. This will help manufacturers escape the “red ocean” market competition of the two upper tiers.
* 95% of single-city investments are still over 100-million. A smaller city size has not affected the individual investment sizes, with some of the smaller cities placing more importance on urban development.
* For tier three to five cities, overall government control capability is stronger and overall level of science and technology is lower.