China Moves towards IoT & Cloud Economy

China is migrating from mobile internet to the internet of things (IoT). Voice assistant adoption has hit an inflection point while industrial internet opens up new big-business opportunities. The cloud is the foundation, driving the digital upgrade across traditional industries from retail to healthcare, finance, manufacturing and government.

Voice assistant adoption has hit an inflection point. Baidu’s DuerOS-powered smart device installed base also jumped 33% to 150m in the past three months. Baidu was the first to launch a smart speaker with display world-wid, taking its voice assistant to next level where users don’t have to say the “awaken” words every time to initiate conversation. Not only will DuerOS answer questions, it also suggests new ideas. Meanwhile, Baidu is enriching content with iQiYi videos, QQ Music/Netease Cloud music, search information, kids content through partnerships with VIPKID and industry experts.

Cloud is the foundation of industrial internet. China cloud penetration is still low at 5-10%, but AliCloud has led the way, penetrating new sectors such as healthcare, entertainment, government and manufacturing over past two years. It is helping traditional industry to digitise their businesses. Its offering has also gone beyond infrastructure as a service (IaaS) to platform as a service (PaaS) and software as a service (SaaS), such as AI technology for quality control, AI database and data analytics for manufacturers. Tencent has restructured the organisation to accelerate cloud services. Baidu focuses on AI-empowered cloud services, eg, AI customer services for telcos, internet of vehicles and unmanned convenience store solution.