Virtual Reality is About to Get Real in China

Mar 25, 2016 02:26 PM EDT

(Photo : Getty Images) Bin Li of China tries out the Oculus VR Crescent Bay Headset prototype at the 2015 International CES at the Las Vegas Convention Center on January 8, 2015 in Las Vegas, Nevada.

The industry of Virtual Reality (VR) in China is expected to boom more than three times by the end of the year, but VR companies admit that they must first reach out to the public to let them know what the technology is all about.

iResearch Consulting Group revealed in a report that China's VR market by the end of 2015 was worth ¥1.5 billion ($230 million). This year, it will amount to more than ¥5.6 billion ($860 million) and hit ¥55 billion ($8 billion) in 2020.

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"The market feels like it did on the eve of the first iPhone when it was unveiled in 2007," said Yang Tao, general manager of SweetTech.

SweetTech is a VR startup based in Beijing and is set to open its first VR brick-and-mortar store in July.

VR experience is not as popular in China yet as it is in the United States and more actions still have to be done to make it popular among the public. One of these is partnering with widespread business platforms.

Manufacturers of VR hardwares are striking deals with internet cafes to introduce the technology to a wider audience. For one, Taiwan-based smartphone manufacturer HTC wants to open more than 100 VR experience stores in 2016 and is currently talking to different internet cafes.

"Currently, to popularize the VR experience, establishing offline physical stores is the best way to feed the potential market demand," said He Wenyi, founder of Lekevr, a VR content distribution company.

Lekevr has opened 1,000 VR experience stores in China.

According to China Galaxy Securities Research, a physical VR store can have a monthly net profit of more than ¥10,000 ($1,500) if it can have 30 to 40 people customers in one day.

Theme parks also have VR-enabled entertainment equipment, which is also a way to make VR more trendy.

"As long as the intellectual properties presented in the content are familiar to consumers, VR theme parks will be an important platform for content distribution and a way to monetize the technology," China Galaxy Securities Research said.

TagsVirtual Reality, Levr, VR, virtual reality in China