Chinese consumers not enthused by smart homes yet, but firms anticipate gold rush

By Li Qiaoyi Source:Global Times Published: 2017/8/23 19:03:39

China has continued to appeal to both domestic and foreign firms seeking a slice of its enticing smart home market, although mass consumer interest in the new technology has yet to be ignited.

Holland-based Philips Lighting, the world's largest lighting maker, announced in late July a partnership with voice-controlled smart speaker maker LingLong Tech, a joint venture between Chinese e-commerce giant JD.com and Chinese artificial intelligence (AI) venture iFlytek Co.

The two sides, both betting on China's smart home market, envision leveraging their respective strengths - connected lighting systems in the case of Philips and LingLong Tech's voice activation capabilities - to allow for voice-activated light control, a typical example of home automation.

The sector is evolving quickly and it involves a multitude of device makers and service providers, from foreign heavyweights such as Philips Lighting, Amazon and Google to Chinese Internet behemoths like Alibaba, JD.com and Xiaomi.

But it hasn't grown so impressively in terms of capturing consumer interest. However, this tepid response has not scared off investors, who know how much potential there is in the country's marketplace for various smart home gadgets and services.

A report from UK-based research house Ovum earlier this year predicted that China and the US will be the largest markets for smart home technology in the years to come, citing expectations for higher product availability and greater consumer interest. And sales worldwide of smart home devices are expected to grow to over 1.4 billion units by 2021, up from 224 million last year, according to the report.

The findings certainly point to tremendous opportunities in China's smart home market, especially considering that the country remains far behind the US in terms of smart home penetration. China is not among the top five in the smart home household penetration rankings - the US tops the list at 69 percent, followed by Canada, South Korea, Japan and the UK. The gap perhaps only cements belief that monetizing China's smart home market could be the next gold rush.

Looking ahead, the growing popularity of AI in the country might eventually lead to a smart home device and service explosion and whoever works out the formula that can genuinely convince the mass market of the value of smart home technology will win massively in a more automated future.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn




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