What Is the Internet of Things (IoT)? Definition & Examples 

China’s Internet of Things (IoT) revolution is not theoretical or niche – it’s woven into everyday life. By late 2024, the country had nearly 3 billion IoT connections, officially surpassing the number of mobile phone subscriptions. This explosive growth means Chinese commuters, shoppers, and homeowners routinely interact with smart devices and sensors daily. 

Over 90% of people in China now own at least one smart home gadget, the highest adoption rate in the world. From smart appliances in high-rise apartments to delivery robots in subways, IoT has moved from buzzword to normality in China’s rapidly urbanizing society.

This blog discusses how IoT works, how China leads, and what global professionals can learn from its execution model.

How IoT Works in Practice

At its core, the Internet of Things is a system that bridges the physical world with digital decision-making. Devices equipped with sensors collect real-time data. That data travels through a network, is processed, and triggers an automated or human—controlled response. This loop happens continuously, creating a living network of devices that can observe, analyze, and act.

A fully functional IoT system relies on these integrated layers:

1. Sensors and Physical Devices

Any IoT system starts with a device capable of sensing the environment. These sensors can detect heat, humidity, pressure, vibration, motion, light, sound, location, or biometrics. The variety is vast. 

For instance, agricultural sensors can detect soil moisture every 10 seconds, while manufacturing sensors measure equipment vibration to prevent breakdowns. In 2025, the average industrial IoT setup will use various sensors across workflows, from production lines to logistics.

IoT devices, such as a smart thermostat that adjusts temperature, may be active or passive, such as a tracker embedded in a package. What unifies them is their ability to collect raw, real-time data from the physical world.

2. Connectivity Layer

Once the data is captured, it must be transmitted. This is where connectivity comes in. IoT systems use a mix of communication protocols depending on the use case:

• 6G (emerging): Set to debut commercially around 2030, 6G promises speeds up to 100 times faster than 5G with even lower latency, enabling ultra-intelligent IoT environments. China is investing heavily in 6G to power next-generation applications such as real-time holographic communication, tactile internet, and fully autonomous ecosystems.
• 5G: Offers ultra-low latency and high bandwidth, essential for mobile and real-time systems like autonomous vehicles or surgical robotics.
• Wi-Fi: Suitable for local area connections like smart homes or offices.
• NB-IoT (Narrowband IoT) and LoRa: Designed for long-range, low-power applications such as utility meters or remote environmental monitoring.
• Bluetooth and Zigbee: Often used in short-range consumer devices and smart buildings.

The communication protocol determines how quickly and reliably data reaches the next layer.

3. Edge Processing and Data Management

The volume of IoT data is massive and growing. By the end of 2025, IoT devices will generate over 79.4 zettabytes of data annually. Processing all of that centrally in the cloud isn’t always practical.

That’s why many systems use edge computing, where data is processed close to where it’s generated. This reduces latency and bandwidth load, making real-time decisions possible. For example, a surveillance camera with edge AI can detect motion and decide whether to alert security without waiting for cloud confirmation.

When data needs long-term storage, broader analysis, or integration with other systems, it moves to cloud platforms. Analytics engines sort and visualize the data there, often feeding into business dashboards, predictive tools, or enterprise software.

4. Automation and Decision Layer

The final step is action. This could be automatic—like a factory robot adjusting its path—or involve a human making a decision based on insights from the dashboard.

Modern IoT systems often integrate AI to make sense of patterns. For instance, predictive maintenance algorithms detect when machines will likely fail, reducing downtime. In retail, customer movement heatmaps influence store layouts in real time.

China’s National IoT Ambition

Chinese consumers have embraced IoT with a zeal that sets them apart. The country’s urban population reached about 67% by the end of 2024, creating dense, tech-friendly cities where innovative services thrive. In these connected urban centers, digital convenience shapes everyday behaviors.

Government Support and Strategic Plans

Central Industrial Strategies

The Chinese government has explicitly made IoT a pillar of its industrial modernization agendas. The landmark Made in China 2025 policy (launched in 2015) identified IoT as a priority for upgrading manufacturing and infrastructure. 

Inspired by Germany’s Industry 4.0, MIC2025 aims to create cloud-driven IoT and automation systems across automotive, telecom, agriculture, and more sectors. This top-down strategy sets clear targets for IoT adoption in “priority” high-tech fields, with the government mobilizing resources to ensure those targets are met. 

For example, authorities have created around 100 industrial IoT platforms under state guidance, enabling “continent-scale” industrial ecosystems by sector. Such platforms connect factories and supply chains through IoT, reflecting how state planning actively builds IoT infrastructure that individual firms might not achieve alone.

Massive Investment via New Infrastructure

In 2020, Beijing unveiled a sweeping stimulus plan called the “New Infrastructure” plan, which commits enormous funding to digital and smart infrastructure. 

At the 2020 National People’s Congress, the government announced roughly US$1.4 trillion (over RMB 10 trillion) in public spending through 2025 on next-generation infrastructure, including 5G networks, AI, and the Internet of Things (IoT). 

This initiative treats IoT as a national priority on par with high-speed rail or power grids. It explicitly names IoT and the “industrial internet” as key investment areas alongside data centers and ultra-fast networks. 

Analysts estimate total new infrastructure investment could reach RMB 17.5 trillion ($2.5 trillion) by the end of 2025. China’s state is effectively jump-starting IoT deployment nationwide by funding IoT sensor networks, smart utilities, and other digital systems at scale..

Policy Coordination and Subsidies

A defining feature of China’s IoT push is close coordination between ministries, state-owned enterprises, and local governments. The Ministry of Industry and Information Technology (MIIT) and agencies like the NDRC (National Development and Reform Commission) issue action plans, technical guidelines, and funding to steer IoT growth.

The NDRC confirms extensive deployment and progress in IoT-related infrastructure and new digital technologies across China by 2025, aligned with major industrial and digital development goals.

The report indicates significant progress in infrastructure and digital development:

• Major infrastructure projects (including railways, logistics hubs, and charging stations) have expanded nationwide.
• New infrastructure types such as 5G networks cover all townships and more than 90% of administrative villages, reaching 71% of the population.
• Industrial Internet (the Industrial IoT) covers all 41 major industrial categories.
• China is expected to have about 4.1 billion Industrial IoT connections by 2025, accounting for one-third of global Industrial IoT connections.

14th Five-Year Plan (2021–2025)

The 14th Five-Year Plan (2021–2025) further embeds IoT across sectors: energy, logistics, agriculture, elder care, transportation, and public safety. 

It includes measurable benchmarks: 

• IoT deployment in 100 smart manufacturing clusters
• Full 5G coverage in Tier 1 and Tier 2 cities, and 
• Standardized IoT protocols for health monitoring in rural clinics.

Central Role of MIIT

The Ministry of Industry and Information Technology (MIIT) is the central coordinator. It issues guidelines, allocates funding, enforces standards, and audits deployment. In 2024, MIIT published the “Smart Connected Infrastructure Guidelines,” which formalized how municipalities should integrate IoT into public transport, waste management, and disaster response.

In 2024, MIIT finalized a comprehensive technical standards framework for IoT, defining the categories needed to ensure different IoT devices and platforms can interconnect seamlessly. 

By establishing nationwide standards (e.g., communication protocols, data formats, security requirements), the ministry prevents the fragmentation seen in Western IoT markets, where multiple competing standards can slow adoption. 

Chinese Tech Giants Driving IoT

Screenshot from alibabacloud.com

China’s rapid IoT expansion isn’t only driven by policy—it’s executed at scale by tech giants with deep infrastructure, platform ecosystems, and AI capabilities. Unlike their Western counterparts, these firms don’t treat IoT as a separate product line.

Each major player brings a different strength: 

Xiaomi Smart Home Ecosystem

Image from mi.com/global

China’s smart home market is flourishing, with domestic ecosystems built around integrated IoT platforms. Xiaomi exemplifies this with an open IoT ecosystem unified via its Mi Home app and Xiao AI assistant, spanning smart lights, appliances, wearables, and more. 

By the end of 2024, Xiaomi’s AIoT platform connected over 861 million devices (excluding phones and PCs). Notably, more than 17.1 million households own five or more Xiaomi IoT products, reflecting deep consumer adoption. 

This seamless integration lets users manage home lighting, climate control, security cameras, and fitness gadgets from a single interface, greatly enhancing convenience and automation in daily life.

Huawei: Embedded Operating Systems and Network Control

Huawei operates across the full stack: from device hardware to network infrastructure and cloud services. Its HarmonyOS and LiteOS operating systems are optimized for IoT devices that need lightweight footprints and fast interactions. These systems run on everything from wearables and smart TVs to industrial sensors.

On the enterprise side, Huawei’s OceanConnect IoT platform supports transportation, energy, and manufacturing industries. It allows companies to build modular solutions with edge-cloud coordination, AI integration, and secure network slicing. As of 2025, OceanConnect supports 136 partner solutions in more than 30 sectors.

Huawei is also central to IoT networking. Its base stations and chipsets support 5G NR-Light, which is designed specifically for low-power, high-density IoT deployments.

Alibaba Cloud: Platform Intelligence for Commerce and Industry

Alibaba Cloud’s IoT strategy centers on commercial logistics and digital commerce. The Link IoT platform provides modular services for smart cities, supply chain visibility, energy metering, and retail automation. It’s well-integrated with Alibaba’s e-commerce platforms, creating real-time feedback loops between consumer behavior and physical operations.

For example, sensors in Cainiao warehouses feed into the Link platform to optimize delivery routes and storage conditions. In 2024, Alibaba expanded its Link Edge AI modules, allowing manufacturers to conduct on-site visual inspections and predictive maintenance.

Alibaba’s fintech arm, Ant Group, applies IoT to financial inclusion. Micro-IoT sensors and AI credit scoring provide usage-based microloans to small retailers, especially in lower-tier cities and rural areas. This model links device activity directly to financing terms.

Cainiao Network

Cainiao Network operates sprawling smart warehouses and IoT-enabled delivery infrastructure to ensure millions of packages reach customers within 24–48 hours. In Cainiao’s fulfillment centers, inventory is tagged with RFID sensors and tracked by a central IoT system for real-time visibility. 

Automated guided vehicles and robotic sorting arms – coordinated by cloud algorithms – swiftly move parcels through these warehouses with minimal human intervention. 

For example, Cainiao’s smart logistics platform can automatically route an urgent order to the optimal warehouse, then dispatch the package through a courier or locker closest to the customer, all based on IoT data. The result is that Chinese consumers can order a product online in the morning and often receive it by evening.

Baidu: Autonomous IoT Networks in Transit

Screenshot from apollo.auto

Baidu positions itself as a search engine and a pioneer in intelligent mobility. Its Apollo platform is one of the world’s largest autonomous driving networks, operating across over 30 cities in China with more than 100,000 connected vehicles.

Apollo doesn’t just manage onboard car data—it forms an IoT mesh with traffic lights, road sensors, and municipal control centers. This vehicle-to-infrastructure (V2I) integration allows real-time rerouting, adaptive signaling, and autonomous ride-hailing fleets.

In 2025, Baidu expanded its Xiaodu AIoT ecosystem to support smart traffic monitoring, indoor navigation, and voice-activated services in public infrastructure.

Baidu’s DuerOS (via Xiaodu smart displays and speakers) has emerged as a leading voice-based IoT hub. As of 2024, Baidu’s Xiaodu platform was integrated with 1,500+ brands across 70+ device categories, encompassing 300 million connected devices ranging from TVs to refrigerators.

Tencent: Social IoT and Urban Integration

Tencent’s IoT strength lies in its vast user base and social interface layers. WeChat’s IoT APIs enable direct integration between smart devices and user accounts, enabling remote access, notifications, and payments through one interface.

Tencent’s WeCity platform supports city governments in deploying citizen-facing IoT services. For instance, its system in Shenzhen allows residents to monitor bus arrivals, air quality, and utility usage in a unified app environment. In 2024, WeCity added modules for emergency alerting, dynamic traffic signs, and smart building access.

Tencent also partners with hardware brands to integrate devices into the WeChat Mini Program ecosystem, making device control feel like messaging, not tech management.

Foxconn

Screenshot from foxconn.com

Foxconn, the world’s largest electronics manufacturer, has embraced IoT-driven “smart factory” practices to boost efficiency on its production lines. 

In one notable factory in Kunshan, Foxconn’s use of industrial robots and IoT-controlled machines enabled the company to replace 60,000 human workers with automation. Since then, Foxconn’s leadership has targeted automating 30% of its manufacturing processes by 2025.

Foxconn’s Shenzhen Guanlan plant, recognized as a WEF “Lighthouse” smart factory, deploys an array of IoT devices and AI algorithms to streamline production and track energy usage and carbon output in real time. The result has been a 45% cut in manufacturing costs and improvements in sustainability, like a 24% reduction in on-site CO₂ emissions through IoT-optimized processes. 

These connected factory lines demonstrate how IoT drives enterprise efficiency and greener operations in China’s manufacturing sector.

Haier’s COSMOPlat

Haier – a leading appliance manufacturer – has revolutionized production by linking consumers directly to its manufacturing via the COSMOPlat industrial internet platform. 

COSMOPlat is an IoT-powered mass customization system that allows customers to personalize products, which are then made on demand in Haier’s smart factories. 

Through online interfaces and interactive community forums, users can co-design features (for example, specifying a refrigerator’s layout or a washing machine’s cycle functions) and submit orders that go straight into Haier’s IoT-connected production schedule. This model dramatically reduces inventory and responds precisely to consumer needs. 

Smart City Investments

Image from unlimphotos. China smart city

China’s push toward smart cities has become a cornerstone of its national digital strategy, and IoT sits at the heart of that transformation. Here is a snapshot of how key cities are advancing IoT-backed smart city development.

Shanghai

Shanghai continues to lead in integrating IoT with digital twins—virtual representations of physical assets. Through the Urban Operations Management Center, city officials use real-time IoT data to simulate urban scenarios like subway crowding or waste collection. 

In 2024, the city expanded this model into suburban areas and smart industrial zones. Shanghai’s Hongqiao Business District is also piloting 5G-enabled logistics systems and environmental monitoring using citywide sensor networks.

Wuxi 

In Wuxi, one of the country’s earliest IoT pilots, sensors monitor traffic flow, water levels, air quality, and pedestrian patterns. City managers access real-time dashboards that issue automated alerts, suggest rerouting strategies, or trigger local interventions.

Wuxi has implemented intelligent traffic management in transportation that uses connected cameras and signal control to streamline flow. 

Introducing smart toll roads, IoT-enabled parking, and adaptive traffic lights has significantly cut congestion in Wuxi, saving commuters countless hours otherwise spent idling in traffic.

Shenzhen

Shenzhen’s smart city investments go beyond consumer tech. The city is leading national efforts in AIoT-powered service robotics, embedding smart robots into metro stations, hospitals, and government buildings. 

Shenzhen pioneered the “4321+X” model, integrating government networks, video feeds, IoT sensor networks, and internet services across neighborhoods and districts.

The city leads in installing smart CCTV and other IoT-driven public safety systems; for example, Longgang District saw overall crime rates fall nearly 30% after deploying these technologies.

Chongqing 

Chongqing has implemented one of China’s most advanced vehicle-to-infrastructure (V2I) networks. Roadside sensors and traffic lights communicate with buses and autonomous shuttles to regulate flow and minimize idle time. 

In the Liangjiang New Area of Chongqing – one of China’s national intelligent vehicle pilot zones – authorities have laid nearly 100 km of urban roads equipped with V2I sensors and 5G connectivity as of late 2024.

Healthcare: Continuous, Remote, and Personalized

IoT is also reshaping healthcare in hospitals, community clinics, and homes.

Ping An Good Doctor

Ping An Good Doctor operates smart health kiosks across metro areas. These booths offer AI-assisted diagnostics, basic vitals screening, and video consultations. Each kiosk is linked to a cloud-based IoT system that syncs with wearables and electronic health records.

The AI can diagnose around 2,000 common ailments accurately and provide an initial assessment. A human doctor then comes online via video to confirm the diagnosis and e-prescribe medications, which the kiosk can dispense from an integrated smart vending machine stocking 100+ common drugs.

How IoT Is Reshaping Retail in China

China’s retail sector is undergoing a silent overhaul, powered by IoT-enabled strategies that link digital platforms and physical stores into seamless ecosystems. In 2024, Chinese retailers reported that 72% of mid-to-large chains now employ IoT systems across their supply chains and store floors, boosting delivery speed and cutting delays by approximately 40%.

Alibaba’s Hema Fresh (Freshippo), JD.com’s 7Fresh, and Suning’s Nanjing Warehouse

Screenshot from freshippo.com

Walk into Alibaba’s Hema Fresh (Freshippo) supermarkets or JD.com’s 7Fresh grocery stores and you’ll see how IoT enriches a simple grocery run. At Hema, shoppers enter by scanning a mobile app; some locations even use facial recognition at the gate for entry. 

Products on shelves carry RFID tags and digital price labels rather than paper tags. Customers can pick items and bag them, or scan codes on items to instantly get detailed origin info on their phone (e.g., farm source, freshness, recipe ideas). 

These stores double as online fulfillment centers, enabled by IoT systems that sync inventory in real time. When you’re done shopping, there’s no need to wait at a cashier. Hema and 7Fresh use automated check-out: you can simply walk to a kiosk, scan your app (or at some stores, just your face), and the payment is auto-deducted from your Alipay/WeChat Pay wallet. 

The entire store experience is cashless, queue-less, and personalized. Hema even uses data from hundreds of in-store cameras to analyze foot traffic and optimize product displays on the fly.

Online-Merge-Offline (OMO) Model 

Chinese retail has embraced an Online-Merge-Offline (OMO) model at scale. As of mid-2024, over 80% of major supermarket and convenience chains in China had adopted OMO strategies that merge digital and physical shopping. This means a store visit and an online browse are now part of one continuous journey. 

Shoppers routinely scan QR codes on products in a brick-and-mortar store to see reviews or more choices online. Many will make purchases in-app and then pick them up in the store an hour later, or vice versa, depending on what’s convenient. 

Logistics also benefits—JD.com uses IoT-connected drones and robots for faster deliveries, while sensors monitor perishable goods to ensure freshness.

Beyond convenience, IoT enhances customer engagement. Beacon technology sends personalized discounts to shoppers’ phones as they browse, while AI-powered smart mirrors recommend outfits based on preferences. 

Future Trends in China’s IoT Landscape

China’s IoT journey is far from complete. The coming years will see the country push into even more cutting-edge and integrated IoT applications. Unlike some places where talk of the “next big thing” can be speculative, in China, these trends are backed by hefty government plans and active R&D. 

Here’s a look at what’s on the horizon, grounded in emerging projects and policies:

Brain-Computer Interfaces

In early 2024, Beijing unveiled its Brain-Computer Interface (BCI) Action Plan for 2025–2030, aiming to support 3–5 globally influential BCI leaders and over 100 specialized mid-sized firms by 2030, with clinical applications in healthcare, education, and safety systems. 

The standardization comes through an MIIT-led BCI technical committee, announced in mid‑2024, which will guide industry protocols and standards around neural tech. Soon, trials may begin using thought-controlled wheelchairs or robotic limbs in hospitals, marking a shift toward what might be called the “body as IoT.”

Metaverse and Digital Twins

China’s metaverse strategy is enterprise-first. MIIT’s 2023–2025 Metaverse Industrial Innovation Action Plan envisions 3–5 world-leading metaverse firms and industrial hubs by 2025. Pilot applications already include AR try-on features during major shopping festivals in 2024, backed by local government efforts to build “metaverse industry parks” in cities like Shanghai and Chengdu. 

These parks feature digital twin projects, virtual replicas of infrastructure that receive live IoT sensor data to support urban planning and public services.

Service and Humanoid Robots

Robots are expanding into daily life. By 2025, China plans to mass-produce humanoid robots, supported by MIIT and city-level programs in Ningbo and Hangzhou that list goals like building 100 core components and launching 20 R&D initiatives through 2027. 

Startups such as EngineAI and AgiBot are deploying bipedal robots, thanks to funding and subsidies targeting eldercare, hospitality, and logistics. In Shenzhen, robots already deliver food in parks and patrol buildings, with the goal of widespread deployment by 2027.

China’s future IoT is multidisciplinary—linking neural tech, immersive virtual spaces, intelligent robots, and unified standards. It’s a vision powered by planned R&D, local pilots, and national coordination. 

For global professionals, this signals a unique opportunity: IoT innovation in China is championed, funded, and normalized, not experimental. 

Want to Go Deeper on China’s Digital Future?

If you’re exploring China’s digital transformation, especially in areas like IoT, smart retail, or platform ecosystems, experts like Ashley Dudarenok bridge the gap between insight and action. 

Ashley Dudarenok is one of China’s most respected voices on digital transformation. With over 15 years of on-the-ground experience, she helps global teams understand how technologies like IoT, AI, and smart retail shape the world’s most competitive market.

Why Ashley?

• Naturalized Chinese entrepreneur with deep insight into platform behavior and consumer shifts
• Member of Alibaba’s Global Influencer Entourage, JD.com’s Global China Experts Group, and trusted by Tencent, Pinduoduo, and others
• Recognized by Thinkers50, RETHINK Retail, and LinkedIn Top Voices
• Speaker and advisor to teams at LVMH, Shiseido, Harley-Davidson, and more
• Author of bestselling books and China Mega Reports on tech, retail, and consumer behavior

What She Offers

• Briefings and workshops tailored to how China’s digital infrastructure—like IoT, 5G, and AI—is transforming daily life across industries such as retail, logistics, healthcare, and smart cities.
• Actionable strategies that show how Chinese consumers interact with connected devices and platforms—from facial-pay grocery stores to AI-powered health kiosks.
• Ongoing insights on how technologies like smart homes, autonomous transit, and mobile ecosystems evolve at “China speed”, helping your team stay ahead of digital adoption trends.

If you’re rethinking or starting to build a China strategy, Ashley can help your team move confidently.

Book a session with Ashley now to explore what’s possible.

FAQs about What is the Internet of Things (IoT)?