Xiaomi, Haier... A flood of diverse smart home products at reasonable prices
Korea International Trade Association Releases Report on 'Current Status and Implications of China's Smart Home Market'

A wave of IoT-equipped smart home products is sweeping through Chinese households. This is attributed to companies like Xiaomi and Haier luring Chinese consumers by flooding them with a wide variety of reasonably priced smart home products.

According to the report "Current Status and Implications of the Chinese Smart Home Market" released by the Shanghai branch of the Korea International Trade Association, China's smart home market reached 60.6 billion yuan (10.07 trillion won) in 2016, marking a significant 50.2% growth compared to the previous year. It is projected to show a growth rate exceeding 50% over the next five years.
Not only traditional home appliance companies, but also IT firms such as Xiaomi, 360, and Tencent are entering the smart home market and investing massive amounts of capital in research and development and the development of advanced technologies. The Chinese government is also fostering the smart home sector as a key area through various policies.

While early smart homes began with simple appliance control and security systems, they are now expanding into service areas that include remote monitoring and control, telemedicine and home healthcare, and online education. Smart home products can generate profits through big data and related services even after the sale, and specific service models such as material delivery, remote healthcare, and long-term educational services are being presented.

Consequently, strategic alliances among traditional home appliance companies, internet firms, and media platform companies are becoming increasingly active. A prime example is Xiaomi, which is achieving significant success through partnerships with video platform iQiyi and joint product launches with home appliance manufacturer Philips.

According to the '2017 Trends in Chinese Household Internet Consumption' cited in the report, the main online consumers of smart homes are the post-80s and post-90s generations, who have a high adaptability to new products and have a habit of using mobile phones, accounting for about 80% of smart product buyers. It was found that smart home users are usually interested in travel, financial management, and shopping, and most are households with young children.

In addition, Chinese consumers showed high interest in small, cost-effective products and energy-saving products. It was found that the price ranges Chinese consumers are willing to spend on smart home products were significantly high, in the order of 5,000-9,999 yuan (24.0%), 1,000-4,999 yuan (20.9%), and 10,000-29,999 yuan (20.0%).

Park Sun-kyung, Deputy Director of the Korea International Trade Association’s Shanghai Branch, pointed out, “There is a high possibility that a loyal customer base will be formed as consumers’ initial smart home consumption experience, which began with purchasing individual items, expands to the entire product line of a specific brand.” She emphasized, “Korean companies also need to target the Chinese market with active O2O strategies, such as establishing large-scale offline experience centers and expanding online sales networks, tailored to the purchasing habits of key smart home consumer groups.”