According to statistics, by the end of 2021, there were 1,866 counties (including counties, towns, etc.) in mainland China, accounting for about 90% of the country’s total land area.
The county area has a population of about 930 million, accounting for 52.5 percent of mainland China’s population and 38.3 percent of its GDP.

It is not difficult to find that the number of county population and GDP output has been unbalanced. At the same time, in the Internet of Things industry, related technologies or
products are mostly applied in first – and second-tier cities, and few are put into counties.

It is understood that the market of cities, counties and towns and rural areas below three lines in China is called the sinking market. In the past few years, many leading security
enterprises have begun to develop subsidence strategies. On the other hand, the label of relevant policies has gradually expanded from smart city to digital village.

Today, with the gradual rise of the Internet of Things platform products, the sinking market is also being developed, and the digital transformation of small and medium-sized
cities and the upgrading of residents’ consumption level have been put on the agenda. In other words, 90 percent of the land area and a large market of 930 million people are
being tapped.

For the sinking of the sales channel, huge human and financial resources need to be invested, coupled with the serious fragmentation of the Internet of Things scene, it is very
difficult to explore, tap the market and make a channel. Most importantly, although it sounds easy to integrate the dealer business of Haikang and Dahua, the main task of local
dealers is not to develop channels, but to press, ship, unload goods and make prices, or to survive by looking for projects based on the channel resources at hand. Dealers lack the
motivation to actively develop a deeper sales network.The interests of all parties cannot be balanced, resulting in small enterprises will not contact at all.

In the future, more technologically mature iot enterprises are needed to expand the market in small and medium-sized cities and develop mature iot solutions suitable for the
management system of small and medium-sized cities.