With the rapid development of technologies such as the Internet of Things, artificial intelligence and cloud computing, the smart home industry has ushered in major development opportunities. According to statistics, the scale of the domestic smart home market has exceeded 100 billion yuan. 

In the long run, there is still much room for improvement in the market size. According to data from Tianyancha, our country has added more than 7,800 smart home-related companies this year, and more than half of them were born in Guangdong.

More and more smart home application scenarios

Bill Gates predicted in the Road to the Future that in the near future, houses without smart home systems will be as unfashionable as houses without Internet access. This is gradually becoming a reality. Lying in bed, you can easily control all the lights and electrical appliances at home through the remote control without getting up; when people are on their way home from get off work, they can remotely turn on the air conditioner and the rice cooker to heat the rice through the mobile phone; the old man forgot to bring his key when he went out. Children on business trips can remotely open smart door locks; during holidays, parents can also control their children' s study and entertainment time through smart monitoring devices... These smart home application scenarios have appeared in people' s daily lives more and more frequently.

Data from Leadleo Research Institute shows that China's smart home market continues to expand and gradually enters the stage of scale development. The market size of the smart home industry rose from 40.34 billion yuan in 2015 to 152 billion yuan in 2019, with a compound annual growth rate of 39.3%. According to a report recently released by Shenwan Hongyuan, the smart home industry has maintained a double-digit growth momentum in recent years, and the overall market size in 2020 has increased to 170.5 billion yuan. In the long run, compared to overseas developed countries and regions, the current penetration rate of smart home in the US market has reached 32%, and the penetration rate in many European countries has exceeded 20%, while the penetration rate of China's smart home market is only 4.9%, which has great room for improvement. The future growth potential is strong.

Smart homes usher in a new round of investment boom

As a representative industry in the new economy, smart homes are ushering in a new round of investment boom. According to incomplete statistics from Tianyancha, dozens of financings have occurred on the smart home track since 2021. A total of more than 300 smart home-related companies in China have generated financing events.

The broad prospects and the preference of capital have attracted more players influx. Currently, Internet giants such as Huawei, Xiaomi, Alibaba, Baidu, and JD.com, as well as leading traditional home appliance companies such as Haier, Midea, and Gree, are intensively deployed in the smart home industry, and more start-ups have entered this track.

According to the data from Tianyancha, there are more than 148,000 companies in our country whose business scope includes "smart home, smart home appliances, and smart home improvement", and their status is smart home related companies that are active, surviving, moving in, or moving out. Among them, Guangdong province ranks first in the country with more than 46,000 related companies, accounting for more than 30%. There are more than 10,000 related companies in both Shandong and Jiangsu provinces. From the time of establishment, 78% of related companies were established within the past 5 years.

The upstream and downstream of the smart home industry chain are long

From the perspective of current development trends, from 2016 to 2019, the annual registration growth rate of smart home-related companies in our country has remained above 35% (all corporate status). Subject to industrial and commercial registration, as of June 15, our country has added more than 7,800 smart home-related companies this year. In terms of geographic distribution, Guangdong still has the largest number of new additions, accounting for 56% of the country's total new additions, followed by Hunan, which accounts for more than 13% of the country' s total new additions.

According to Liu Zheng, an analyst at Shenwan Hongyuan, the current smart home industry is fiercely competitive, but the industry chain is long upstream and downstream, with participants covering chip and sensor providers, communication module, smart controller manufacturers, smart terminals, and whole-house smart solutions. 

Internet giants and consumer electronics leaders have significant competitiveness in the smart home industry based on their advantages in IoT big data, artificial intelligence algorithms, and product ecology. However, upstream core components and midstream platform-based enterprises, system integrators, and smart home solutions solution providers have the possibility of going from 0 to 1, and many entrepreneurial unicorn companies are also expected to emerge from them.

Peng Lianqi, an analyst at Leadleo, said that in the short term, due to the broad definition of the smart home industry, the diversification of products, and the decentralization of industrial chain links, it is difficult for smart home giants to achieve "full products", "full scenes" and "full industry chain" layouts. SMEs can dig out value from the product side and the industry chain segment of the track, while realizing their own growth, promote the continuous expansion of the segmented track industry.