The shipment volume of China’s smart home device market in Q4 2021 reached 63.37 million units, an increase of 4.1% year-on-year. Over 12 months, the China smart home device market shipped over 220 million units, or an increase of 9.2% year-on-year. While the market did not reach double-digit growth in 2021, shipment volume shows smart home upgrades were the key growth driver in 2021. IDC expects China’s smart home device market shipments to grow 17.1% year-on-year and exceed 260 million units moved as smart home optimization and upgrades continue.
“China’s 2021 smart home market has undergone upgrades and adjustments and we expect smart home technologies to accelerate in 2022 due to the rise of fully managed services market along with evolution in user-device interactions, upgrade in connectivity, and broaden of sales channels,” says Quorra Liu, Senior Market Analyst for Devices Research at IDC China.
Smart speaker shipments contracted year on year, but product upgrades drove an increase in market sales by 15% year on year. Among them, smart displays maintained its shipment growth under the joint impetus of market demand and manufacturers’ strategic transformation, increasing smart displays’ market share to account for 39% of the overall smart speaker market. At the same time, the smart speaker market has also accelerated the pace of upgrading, and actively expanded the layout of the high-end market through the improvement of sound quality, connection, and product appearance.
Video entertainment shipments fell further, with the smart TV market shipping only 38.86 million units in 2021, a decline of 9.4% year on year. Due to a lack of inventory because of supply chain issues, manufacturers actively target the high-end market, and smart TVs have significantly improved in screen size, display technology and human-device interaction capabilities. Voice interaction is gradually being used for smart TVs, with smart TV shipments with built-in voice assistants now accounting for 72.1% of China’s smart TV shipments in 2021. This is an increase of nearly 9 percentage points year-on-year.
The lighting market maintained rapid growth as user demand for smart lighting gradually deepened. The types of lighting equipment are diversified, downlights, rail lights have joined the intelligent lighting systems, and the smart switch market has also ushered in a sharp increase.
Home monitoring/security’s growth went hand in hand with other upgrades. Among them, the significant improvement of video surveillance resolution led to the growth of the smart camera and doorbell market in 2021. Utilizing camera, display and AI technology in the smart door lock market led to improved product functions, which led to more units shipped overall. The proportion of video door locks to smart door locks increased to 22.3% in 2021 while the penetration rate of visual recognition functions has reached 13.6%.
In 2021, the smart home device market across categories experienced different degrees of product structure adjustments and functional upgrading. This laid the foundation for the subsequent development of the market. IDC expects these adjustments and upgrades could boost further growth in 2022 due to three important factors:
1. Polished products and combining intelligence with functionality to achieve effective upgrades
The starting point for consumers buying smart home devices has gradually shifted from early adopters to higher expectations on functionality and quality. Manufacturers need to pay more attention to the attributes of the products themselves in addition to the novelty brought by artificial intelligence (AI) capabilities embedded with product functions.
2. Refined sales operations and expansion to the middle and high price segments
Last year, driven by product upgrades and rising costs, the average price of China’s smart home equipment market increased significantly, as demand and units shipped for high-priced segments in categories such as smart TVs, smart speakers, and vacuuming robots also grew. With the maturity of technology and the decline in the cost of some components, the price of products in the mid-to-high-end market will usher in more room for adjustment in 2022. Under the general trend of market upgrading, the refined sales operation of products in the middle and high price segments is expected to further increase the market demand in the middle and high price segments.
3. Upgraded channels to reduce user-learning costs through high-quality reach
Although China’s smart home market has been developing for several years, it is still far from being commonplace. There are buyers who do not fully understand a smart home and a sizable number of potential buyers trying to learn about them. Manufacturers must streamline the process for setting up new smart home devices. They must also upgrade their channel services – from professionalism of front-line staff, improved reach and accessibility through active cooperation with offline channels such as home furnishing malls where product demonstrations can be done.
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