How China wearables market has changed since Apple Watch launched, with rising demand for personalised products

Apple faces competition on price from domestic giants Xiaomi and Huawei, and from smaller companies who see Chinese customers for wearables as different and swayed more by emotions than specifications

PUBLISHED : Saturday, 01 September, 2018, 8:46am
UPDATED : Saturday, 01 September, 2018, 8:49am

The wearables market wouldn't be the same without Apple. All eyes have been on the tech company for the past few years as it competes with rival mobile technology giants, and start-ups, to create the ultimate connected smart wristband.

A fitness tracker, a heart-rate monitor, a payment device, and more, the Apple Watch continues to innovate on its offerings to outlast the hype, and sales of Apple wearables, including its Airpod earphones, rose 60 per cent year-on-year in the latest quarter.

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In China, the wearables market has taken on a different shape to that elsewhere – one that is fuelled partly by the purchases of discerning luxury consumers.

Soon after Apple launched its first smartwatch in China, the company adopted a strategy designed to woo affluent Chinese buyers: it launched the first collaboration between a tech company and a luxury brand, Hermès. The leather goods purveyor transformed what was considered a techie product into a sleek, fashionable accessory with customisable leather straps, inspiring a series of smartwatch launches from luxury brands.

But in the market for smartwatches and wearables in China, Apple’s upscale offerings are only part of the story. Last year, Chinese smartphone maker Xiaomi surpassed both Apple and Fitbit in shipments, as it and rival Chinese technology company Huawei wooed consumers by offering wearables at lower price points.

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Huawei’s TalkBand B5, for example, which is both a Bluetooth earpiece and a health tracker wristband, costs about US$150, while Xiaomi is appealing to aspiring, stylish consumers with its latest offering in the hybrid category: a Quartz watch with smart capabilities that retails for just over US$50.

Price points aside, the race to convince some of the most connected consumers in the world to adopt wearable devices appears to be working, even as reports in the US suggest the industry is slowing down. In 2017, adoption of wearable tech in China overtook the US, and Euromonitor reports that smart wearables are expected to record double-digit annual growth in shipments between 2017 and 2022, as Chinese consumers, their disposable incomes rising, trade up in electronics.

Mintel reported in 2017 that 43 per cent of urban Chinese consumers would purchase their own wearable device, and the percentage is closer to half among 20- to 24-year-olds. Both smartwatches and smart wristbands are popular, with nearly 70 per cent of Chinese smartwatch owners also owning a wristband, according to the report.

However, some experts believe that future growth in the industry is not guaranteed.

“There’s no doubt that young people are now increasingly accepting of the idea of wearable technology, but the wearables market is facing a challenge to sustain growth,” Terra Xu, senior technology analyst at Mintel, said in the report.

People’s enthusiasm for fitness wristbands continues to decline. [They] have started to look for something more personalised
Jieming Wang

“This is due to the lack of breakthrough products and the wide ownership of smartphones that are already equipped with similar functions to wearable devices. This is especially the case for smart wristbands and smartwatches. As a result the need for innovation and low entry prices are now becoming key.”

Jieming Wang, the co-founder of Chinese smart jewellery start-up Totwoo, believes his company is providing this innovation, and serving a demand that reflects a need from consumers that is unique to the Chinese market.

“China’s huge population and cultural differences across regions indeed make consumer demand more complicated,” Wang said. “Overall, we find that people’s enthusiasm for fitness wristbands continues to decline. [They] have started to look for something more personalised and customisable.”

Totwoo, which launched in 2015, harnesses artificial intelligence capabilities in its necklaces and bracelets that help the wearer connect with their loved one with the aid of a smartphone app. The pieces in its collection, co-created by Italian designer Marco Dal Maso and embedded with Swarovski crystals, also boast UV monitoring, a calorie counter, and hydration reminders for the wearer.

In spring, it launched a plug-and-play smart jewellery kit in the US market. Totwoo’s popularity is also growing in China – it works with models and designers during fashion weeks to promote its collections, and plans to launch more products and features this year.

“Unlike smart jewellery start-ups in the United States that usually focus on bringing mobile alerts or making fitness wristbands more jewellery-like, in China [we have] found greater demand [among] Chinese consumers [for] using jewellery to express emotions, due to differences in … expression in Chinese culture,” Wang said.

“We believe that wearables will do best when they return to the form that people have been wearing for thousands of years, such as clothing, accessories, and jewellery. Wearables must first conform to the basic characteristics of wearing – express the wearer’s personality and style; also it has to be fashionable and easy to match with outfits.”

Smaller players in the Greater China market have been investing in this theory, creating everything from stylish smart running shoes to rings that answer your phone. One of them is Hong Kong start-up Origami Labs, whose Orii ring functions essentially as a wireless earbud that connects through a smartphone with Bluetooth and does not have to charge for two full days.

Despite advances in mobile technology that make daily tasks – from ordering coffee to keeping track of one’s steps – through a smartphone ever more intuitive, it seems that Wang’s argument could still have clout.

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“Before, when I was in a meeting, I wouldn’t know if my wife was looking for me because my phone was muted. Now, I can easily know because my bracelet is flashing,” he said. “With the development of technology, wearable devices will certainly become more user-friendly and compatible.”