Market forecast: China's smart home market will reach US$48.2 billion in 2027

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According to market research firm ResearchAndMarkets, China's smart home market is expected to reach US$48.2 billion by 2027. The growth of China's smart home market is attributed to factors such as the significant growth of the Internet of Things market, government support, accelerated urbanization and increased awareness of smart home technology, and the increasing importance of home monitoring from remote locations.

The emergence of smartphones, tablets, and computers has enabled people to stay connected at all times; this, in turn, has increased the market demand for smart home products. In addition, telecom operators are upgrading their network management capabilities to provide powerful and stable connection solutions to support the specific needs of smart homes. It is expected that 4G and 5G network coverage will reach universal coverage by 2025, and China is expected to become the largest 5G market by 2025.

In addition, favorable policies and the advent of the Internet of Things have laid a solid foundation for China's smart home market. Initiatives such as the National New Urbanization Plan, China's "14th Five-Year Plan" development plan, smart city projects, and the Made in China 2025 strategy are likely to drive the growth of China's smart home market. As early as the end of 2011, half of China's population lived in cities. In 2020, China's urban population accounted for more than 61.4%, creating huge opportunities for smart home manufacturers.

Today, China's big players, from tech giants to white goods manufacturers, are betting big on the Chinese smart home market. Several Chinese giants, such as Baidu, Xiaomi, Alibaba, and Haier, have entered the market for "smart home" products. As the demand for smart home devices continues to increase, so too are security and privacy breaches. Issues related to privacy and security breaches are limiting the growth of the smart home market.

Impact of COVID-19 on China’s smart home market

The COVID-19 outbreak has become a global stress test. As the number of people infected with the virus continues to rise worldwide, uncertainty about global economic growth increases. The COVID-19 disease has infected about 211 million people worldwide. The number is still growing, and the duration of the pandemic remains difficult to predict.

The home automation market has grown rapidly in recent years, a trend that has been accelerated in part by COVID-19 and people being forced to spend more time at home due to lockdown measures. During COVID-19, the burden of housework has increased, and smart appliances that help people save time will benefit. In addition, the accessibility of smart home devices has increased significantly due to the continued growth of household broadband penetration in China and the continued increase in the number of people owning smartphones.

Analysis of China's smart home application market

In terms of smart home applications, smart appliances account for the largest share of China's smart home market. Smart appliances are equipped with different sensors and designed with connectivity features to connect to handheld devices such as smartphones and tablets as well as other home appliances. Security is the second largest application area in China's smart home market, followed by control and connectivity applications in third place. Control and connectivity are at the core of smart home solutions, supporting everything from smart appliances to lighting, from temperature control to security. The home entertainment market accounted for nearly 9% of the market share in 2020, while comfort and lighting applications had the smallest share in China's smart home market.

In terms of smart home sales, the smart home appliance segment had the highest share of active smart home households in China in 2020, followed by the comfort and lighting segments. The security and home entertainment segments are competing fiercely to grab the largest share of active smart home households in China. With the improvement of network infrastructure and the increasing penetration of broadband and Internet, consumers are increasingly choosing wireless and technologically advanced products to ensure the safety of their families.

In addition, the market will see significant growth with the development of home automation and smart home trends. The growth of home automation and the rapid development of wireless smart technology have led to an explosion in the range of smart home entertainment devices, thereby driving the smart home market. Energy management applications accounted for the least share of active households with smart homes in China in 2020.