Proving the Business Case for the Internet of Things

Fleet management and cold chain markets surging in China, say reports

Steve Rogerson
February 5, 2015
The installed base of fleet management systems in China will reach 5.9 million units by 2019, according to a report from analyst firm Berg Insight. And TechNavio is predicting that the cold chain market in China will grow at a CAGR of 24.2 per cent from 2014 to 2019.
The number of active fleet management systems deployed in commercial vehicle fleets in China was 2.1 million in the final quarter of 2014. Growing at a compound annual growth rate (CAGR) of 22.9 per cent, this number is expected to reach 5.9 million by 2019.
Track-and-trace systems dominate the market and the installed base so far includes a significant share of low-end systems with comparatively limited functionality by Western standards. The steep growth anticipated in the upcoming years is expected to be driven by a combination of political decisions to track selected commercial vehicles and the booming e-commerce market, which creates demand for efficient transport operations.
Top local telematics providers with installed bases of more than 100,000 units include E6GPS and Etrans. Other major vendors are for example Beijing Zhongdou Technology (Ccompass), Shenzhen Huabao Electronics Technology, Shenzhen Weitongda Electronics and 666GPS. Also, a number of Chinese commercial vehicle OEMs have introduced telematics systems. Examples include Foton and Shaanxi Automobile Group in the truck segment as well as Yutong and King Long Group in the bus segment. The latter is also known as the Three Dragons and includes the brands King Long, Golden Dragon and Higer, which are all active in the telematics space.
Only a few international aftermarket providers have so far entered the Chinese FMS market and the installed bases of the foreign vendors remain limited.
“Most Western players present in China have installed no more than a few thousand units on this market,” said the Berg report’s lead author Jan Unander. “There are regulatory hurdles for foreign players related to maps, data handling and SaaS models.”
He added that these issues were expected to remain in the upcoming years. Berg Insight nevertheless expects that there are promising future business opportunities for Western fleet management providers on the fast-growing Chinese telematics market. Examples of international fleet management providers active on the Chinese market include Trimble, Mix Telematics, Microlise and Navman Wireless.
The TechNavio cold chain report says the key vendors in China are China Merchants Americold, SF Express, Shanghai Jiaoyun Rihong International Logistics and Sinotrans Shanghai Cold Chain Logistics. Other prominent vendors include Guizhou Zhiji Logistics, Itochu Logistics, Shanghai Hengfu Logistic, Shanghai Zhengming Modern Logistics, Swire and World Courier.
It says the market is being driven by a growing chilled and frozen food market but is facing difficulties due to high real estate and energy costs. There is also a trend to increase the amount of outsourcing of logistics services.
The report covers agricultural products, frozen food, meat, dairy products, pharmaceutical products, seafood, vegetables and fruit.