Shanghai’s reopening creates US$7.5 billion market for smart devices that track individuals’ temperature, vaccinations and Covid-19 results

As many as two million ‘digital sentry’ machines could be deployed in public venues in the coming weeks, Everbright Securities says
If the devices are proven to be highly effective in helping Shanghai guard against the Omicron variant, they could be seen everywhere in China’s most congested cities: analyst

Shanghai reopening

Daniel Renin Shanghai

Published: 2:00pm, 3 Jun 2022

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Shanghai’s reopening and switch to normal coronavirus control methods after a two-month-long citywide lockdown is expected to create huge demand for digital devices that check and track individuals’ temperature, vaccination status and recent movement, generating sales worth 50 billion yuan (US$7.5 billion), analysts said.

As many as two million such “digital sentry” machines could be deployed in public venues such as hospitals, shopping centres, office buildings and entertainment venues in the coming weeks, according to brokerage Everbright Securities.

In report published late last month, it said that such devices will be in high demand nationwide because of China’s zero-Covid policy and would lead to sales worth 50 billion yuan. Most digital sentry machines have been developed and are manufactured by SenseTime, China’s largest artificial intelligence (AI) firm, as well as Hangzhou Hikvision Digital Technology and Zhejiang Dahua Technology, the country’s biggest surveillance camera makers.

“The real market demand could largely beat the [Everbright Securities] estimate, given the size of China’s huge market,” said Cao Hua, partner at private-equity firm Unity Asset Management. “If the devices are proven to be highly effective in helping Shanghai guard against the Omicron variant, they could be seen everywhere in the country’s most congested cities.”

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Shanghai, China’s most developed metropolis, allowed more than 22.5 million residents – or 90 per cent of its population of 25 million – to leave their compounds on June 1 after largely bringing its latest Covid-19 outbreak under control. Public transport has been fully resumed, but people are required to provide negative results from nucleic acid tests taken within 72 hours before using public transport or visiting public venues.

Moreover, public venues and residents who fail to abide by the rules of Shanghai’s digital health-code system will face punishment, Zhu Junwei, deputy director of the Shanghai Big Data Centre, told a press briefing in late May.

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In contrast, in Hong Kong, shopping malls, supermarkets and wet markets are subject only to passive checking, which means providing vaccination records when asked by enforcement agents.

“Anti-pandemic curbs can bring a windfall to China’s hi-tech firms, particularly AI technology developers,” said Wang Feng, chairman of Shanghai-based financial services group Ye Lang Capital. “The market potential here cannot be matched by anywhere else in the world, because these smart devices will be widely used in big cities to meet stringent virus control rules. Operators of shopping malls and cinemas will buy the machines to improve efficiency of their verification processes, hence attracting more clients.”

Most digital sentry machines use facial recognition technology to check and record information about individuals’ vaccinations, Covid-19 tests and their recent movement before allowing access to public venues. They are priced between 2,000 yuan and 10,000 yuan per unit, Everbright Securities said.

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SenseTime would not reveal its sales targets for digital sentry device Thunder-Air, but said that it took the company only two weeks to launch the product in March.

“The device has six functions – mask detection, temperature screening, health code verification, vaccination record query, nucleic acid report query and ID verification, which assists with quick verification for various venues, and brings convenience to the public,” SenseTime said in a statement to the Post.