AR & VR - Hong Kong

Hong Kong

Revenue in the AR & VR market market in Hong Kong is projected to reach US$167.8m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.59%, resulting in a projected market volume of US$265.3m by 2029.
The largest market in Hong Kong is AR Software, with a market volume of US$52.0m in 2024.
Although most revenue is generated the United States, the AR & VR market market in Hong Kong is also expected to grow significantly.
In the AR & VR market market, the number of users in Hong Kong is expected to amount to 6,113.0k users by 2029.
User penetration in Hong Kong will be 77.9% in 2024 and is expected to hit 81.6% by 2029.
The average revenue per user (ARPU) in Hong Kong is expected to amount to US$28.7.
In Hong Kong, the AR & VR market is experiencing a surge in interest from both tech startups and established companies, driven by a demand for innovative solutions in education and entertainment.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
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Analyst Opinion

The AR & VR market in Hong Kong has been experiencing significant growth in recent years, driven by customer preferences for immersive and interactive experiences, as well as advancements in technology.

Customer preferences: Customers in Hong Kong are increasingly seeking out immersive and interactive experiences, and AR & VR technology provides a unique opportunity to fulfill these preferences. Whether it's exploring virtual worlds, trying out virtual reality games, or experiencing augmented reality applications, customers in Hong Kong are embracing the possibilities offered by AR & VR technology.

Trends in the market: One of the key trends in the AR & VR market in Hong Kong is the increasing adoption of AR & VR technology in various industries. For example, the real estate industry is using virtual reality to showcase properties to potential buyers, allowing them to take virtual tours of homes and apartments. Similarly, the tourism industry is utilizing augmented reality to enhance the visitor experience by providing interactive and informative AR guides to popular attractions. These trends indicate that AR & VR technology is becoming an integral part of business strategies in Hong Kong. Another trend in the market is the growing popularity of AR & VR gaming. Hong Kong has a vibrant gaming culture, and the introduction of AR & VR technology has further fueled the enthusiasm of gamers. The availability of immersive gaming experiences and virtual reality headsets has attracted a large number of gamers, leading to a surge in demand for AR & VR gaming products and services.

Local special circumstances: Hong Kong's status as a global financial hub and its strong technology infrastructure have contributed to the growth of the AR & VR market. The city's well-developed telecommunications network and high internet penetration rate provide a solid foundation for the adoption of AR & VR technology. Additionally, Hong Kong's proximity to mainland China, which is a major market for AR & VR technology, presents opportunities for collaboration and expansion.

Underlying macroeconomic factors: The growth of the AR & VR market in Hong Kong is also influenced by underlying macroeconomic factors. The city's strong economy and high disposable income levels enable consumers to invest in AR & VR products and services. Furthermore, the government's support for innovation and technology development, as well as the availability of funding programs, have encouraged the growth of the AR & VR industry in Hong Kong. In conclusion, the AR & VR market in Hong Kong is experiencing significant growth due to customer preferences for immersive experiences, increasing adoption of AR & VR technology in various industries, and the city's strong technology infrastructure. These trends, coupled with Hong Kong's status as a global financial hub and its supportive government policies, indicate a promising future for the AR & VR market in Hong Kong.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).