The Rise of China AI Computer Vision Industry – Part II

By: Edward Chan

Investment Analyst – Hardware, Semiconductor

Surveillance – Computer Vision to Drive More Application Scenarios

In surveillance, we have end-to-end solution providers such as Hikvision, Dahua, and Huawei, which supply everything from front to back end hardware and software. Several startups focus on the development of vision algorithms such as SenseTime, Megvii (Face++), and YITU. Tech giants, such as Alibaba, focus more on back-end services to support the entire architecture. Companies are able to add new functionalities to surveillance as both hardware (AI chips, edge computing) and software (algorithms, architecture) continue to improve rapidly. This will unlock a new world of more intelligent surveillance in property management, smart city, and smart home.

Mobile Internet – AI enabling Multiple Functions behind Smartphones

Computer vision technology enables key functions on smartphones, such as improving the image quality of smartphone cameras, facial recognition for payment and phone security, AR [Augmented reality] applications, and space recognition. Startups like SenseTime and Megvii license their algorithms to smartphone manufacturers and application developers. Tech giants like Huawei and Bytedance also develop in-house algorithms for various smartphone vision applications.

Logistics – Start from Smart Warehouse

The smart warehouse is an entry point for the industry as computer vision technology is relatively more mature to build a complete solution. The ultimate goal is full autonomy in logistics which depends on progress in autonomous driving. Gao Gong Industry Institute (GGII) estimates China’ smart warehouse industry to be an RMB195 Bn market by 2023. [source: GGII, as of Dec 2019] The next generation smart warehouse can leverage on computer vision technology in multiple areas:

  • Automated guided vehicles (AGV) are used to maneuver items in the warehouse, and startups like Geek+ and Quicktron have launched competitive solutions.
  • Dimensioning weighting scanning (DWS) system is used to sort parcels by collecting a range of data points through cameras and sensors. Companies like Hikvision and Megvii have this as part of their integrated solutions.
  • Intelligent surveillance cameras can be used to monitor real-time resource allocation and detect security breaches.

Chinese companies have established a solid ecosystem around computer vision in surveillance. We think computer vision technologies will be applied in more areas such as healthcare, autonomous driving, and smart retail, etc. We believe it is still early days for commercialization and monetization of the technology and remain confident about the outlook of the industry.