Amid the fluctuations in the global consumer market in the past two years, smart home products have achieved stable growth worldwide with the dual promotion of remote office and home entertainment, as well as the continuous advancement of smart technology. Chinese smart home brands have seized this opportunity to accelerate their internationalization and expand the global market. This article will discuss the market trends of Chinese smart home brands going overseas.
Smart home product classification
According to the characteristics of product equipment, smart homes can be divided into six categories: smart large appliances, smart small home appliances, smart home security, smart connection control, smart light sensing and smart energy management.
Smart home product maturity
Due to factors such as market size, penetration rate, user demand, etc., the smart home category is going through different stages of development. Among them, smart home security, smart light sensors and smart small appliances are in a rapid development stage.
Smart home development technology base
Innovative technologies such as 5G, AIoT (artificial intelligence and Internet of Things) and cloud edge computing (cloud computing and edge computing) drive the development of smart home technology.
Insights into China’s overseas market
As China's main export brand, electronic products account for more than 27% of total exports; the booming development of cross-border e-commerce is its main driving force. Electronics account for 27% of China’s exports. The five major commodities exported by China are shown in the figure below:
China's export e-commerce is developing in the direction of large quantities, multiple categories, and high prices. As time goes by, more competitors will enter the overseas market for consumer electronics products.
Insights into regional development
Europe: The UK is Europe's largest home electronics market, with revenue of $27.51 billion; the number of wireless devices sold by Chinese merchants on Amazon Europe increased by about 30% year-on-year, the fastest growth of all regions. Chinese home electronics products sold by Amazon in Europe are considered the second largest market.
North America: Chinese home electronics sellers consider the North American market to be the dominant market on Amazon because about 70% of home electronics transactions come from the North American market. The transaction volume of Chinese home electronics sellers on Amazon in North America increased by 60% year-on-year, the fastest growth among all regions; the United States occupies the largest market share.
Southeast Asia: As Southeast Asia becomes China's largest trading partner, more Chinese home electronics companies are setting their sights on Southeast Asia. The success of leading companies such as Xiaomi and Huawei in entering the Southeast Asian market has stimulated more Chinese home electronics companies to set their sights on Southeast Asia.
South America: The South America home electronics market is expected to grow at a CAGR of +0.2% annually (2021–2026).
Africa: The African home electronics market has broad prospects, but it is still in its infancy. With the development of Africa's emerging economies, people's income and consumption levels have increased, which has accelerated the development of the African home electronics market. However, African consumers’ preference for traditional channels remains, with only 11.7% of home electronics sales revenue coming from online channels.
Outlook for future development trends
From Made in China to Made in China Intelligent Manufacturing, smart home products going overseas mainly show the following development trends: Internet of Things, Ecology, Globalization, Scenarioization, and Intelligence.
IoT: With the collaborative empowerment of technologies such as the Internet of Things and cloud computing, smart home products are no longer independent items and can interact with other products in real time to form a smart network.
Ecologicalization: Smart products are "cross-border" interconnected with other service providers to provide consumers with an all-round, multi-scenario innovative experience.
Globalization: cutting-edge brands go global and optimize and innovate globally in multiple dimensions such as products, experience, operations, and technology to enhance competitiveness. Scenario-based: The functions of smart home products are more segmented and vertical to meet user needs in various scenarios in life.
Intelligence: The application of artificial intelligence technology in small appliances and smart home security products makes human-computer interaction more accurate and efficient, making products smarter, better understanding of user needs, and easier to operate.
Taking home cameras as an example, global home camera shipments are expected to grow at a compound annual growth rate of 19.3% in the next five years, and are expected to exceed 200 million units in 2025. Due to the low penetration rate and rapid growth of the overseas home camera market, the global home camera product market size is expected to grow at a compound annual growth rate of 14.1% in the next five years, and is expected to exceed 72.1 billion yuan by 2025. Therefore, home camera manufacturers should expand overseas markets and seek more market space.
