This article is reprinted with permission fromShenran (ID: shenrancaijing)Author | Jin Yufan Editor | Wei JiaThe Double Eleven shopping festival of 2022 has come to an end, and one category has taken a roller coaster ride: smart home devices.On the first night of the Double Eleven promotion, several smart home brands announced their sales champions. However, shortly after the event, some “hot-selling” products quickly appeared on second-hand trading platforms like Xianyu.Smart home devices cater to the lazy, but if “lazy people” find a product too “troublesome,” they are quick to resell it.Among these resold items are well-known products like robotic vacuum cleaners, smart refrigerators, and smart toilets, as well as lesser-known devices like smart curtains, smart gateways, and hosts…The former are “smart individual products”; the latter involves the upgraded version of smart living described by manufacturers, known as “whole-house smart” devices.When you leave home, you often worry about whether the door is locked or if the appliances are turned off. When you return home, you hope to turn on the lights and air conditioning in advance. According to manufacturers’ promotions, installing smart home devices can solve these cumbersome operations all at once. Moreover, the price of a complete smart home system has dropped from over 100,000 yuan to around 10,000 to 20,000 yuan, enticing many users during new home installations or renovations.However, the choices of brands, devices, and price points for smart individual products are numerous, and whole-house smart systems involve platforms, protocols, control methods, whether to install before or after, wired or wireless, which not only dazzles consumers but even seasoned industry professionals describe the industry as “chaotic” and “difficult”.The chaotic smart home market, due to its vast potential, is attracting three major factions: internet and tech giants, traditional appliance manufacturers, and new startups. However, true smart homes are still far from us. Some smart home practitioners summarize that traditional appliance manufacturers offer “pseudo-intelligence,” while tech companies and startups provide “weak intelligence.” “Today, these are paid for by users, but tomorrow, it will be even harder for users to place orders for whole-house smart systems.”
Disdained Smart Home Individual ProductsJiang Ziru, who lives in Beijing, has resold a robotic vacuum cleaner and is currently selling a smart curtain. Many consumers, like her, start with smart individual products and then gradually try small-scale smart home scenarios.In the smart home industry, this represents the first two stages. The first stage, the individual product stage, is typified by robotic vacuum cleaners, smart toilets, and single-use smart speakers. In the second stage, small-scale smart home scenarios develop, for example, in the kitchen, where the gas stove and range hood interact, or in the bedroom, where smart speakers control curtains, air conditioning, and air purifiers.Evolution to the third stage, known as whole-house smart, is also referred to as whole-home smart.However, regardless of which stage of “smart” home, they inevitably face consumer disdain.First, let’s look at the “regulars” on second-hand trading platforms: robotic vacuum cleaners and smart toilets, which belong to the first stage of individual products.Mu Zihua from Hubei bought a robotic vacuum cleaner for 2,000 yuan and summarized her complaints: it often cannot find the charger, leaves debris while cleaning, struggles on carpeted floors, or the dustbin falls out; at the beginning of cleaning, the charger must be removed, or it will get tangled in the cord.Jiang Ziru feels that smart toilets are also overrated. She purchased a smart toilet for around 3,500 yuan, which initially worked fine but soon malfunctioned, failing to open automatically and the seat not heating. After inquiring with customer service, she learned that the toilet’s waterproof rating was low, causing the mechanism to fail due to water ingress.
Yang Zhen, a senior practitioner in the smart home industry, added to Shenran that smart toilets and robotic vacuum cleaners are individual products that can enhance user experience when used independently, thus they are relatively popular. Many current “complaints” stem from the early development stage of the industry and high costs. For example, the sensors in robotic vacuum cleaners used to be very expensive, but with technological advancements, sensor prices have dropped, and some “complaints” can be resolved by adding sensors.Also “disdained” are various internet-connected appliances, such as smart washing machines, smart microwaves, and smart refrigerators. According to Qi Xuliang, a relevant person in a smart home brand, it is difficult to categorize these appliances as either first or second stage smart home devices; it mainly depends on whether the product is used independently or interacts with other devices in a specific scenario.Some consumers told Shenran that most appliances on the market are internet-connected smart products, with limited choices and low prices, which is why they purchased them. Others want to experience the smart home offerings of established appliance giants.Huang Lanlan from Guangzhou spent over 40,000 yuan on a washing and drying machine and a sensing range hood from a traditional appliance brand. Her evaluation was, “Not useful at all, purely an IQ tax.”The washing and drying machine, priced over 10,000 yuan and claiming to be AI-controlled, offers smart experiences like selecting different washing methods via a mobile app, and it notifies users when drying is complete. The range hood’s smart feature is that it has two sensors installed, allowing it to be activated by waving a hand while cooking. In Huang Lanlan’s view, “This is still manual control rather than smart; there is no essential difference from pressing a button to turn on the range hood.”“Typical smart appliances also include screen-equipped refrigerators and screen-equipped robotic vacuum cleaners,” Yang Zhen summarized, stating that the core issue is that they are connected for the sake of being connected, complicating the user experience, which is essentially pseudo-intelligence, not aligning with consumer usage habits. He believes that traditional appliance manufacturers like Haier and Midea have a certain brand recognition among consumers, but the problem lies in applying the logic of “selling appliances” to smart homes, focusing on areas they were previously adept in, such as kitchens and bathrooms.“Different brands of appliances require downloading their respective apps, and they cannot interact with each other, leading to a fragmented experience,” Jiang Ziru told Shenran.
True Whole-House Smart is Still Far from UsIf traditional appliance manufacturers’ smart homes are “closed,” then the concept pushed by internet and tech giants and startups is “open.” The main players include internet companies like Alibaba and Baidu, tech companies like Xiaomi and Huawei, and startups like Aqara, Tuya Smart, and Orvibo. Their direction has shifted from promoting key products to focusing on whole-house smart solutions, which is the third stage mentioned above.According to IDC’s forecast data, the whole-house smart solution market is expected to experience rapid growth, with analysts predicting that the domestic whole-house smart market will exceed 10 billion yuan by 2025. But are the whole-house smart solutions provided by these manufacturers truly intelligent? In Yang Zhen’s view, many solutions still remain at the level of semi-finished “weak intelligence,” with some manufacturers “moving further down the path of simplification and high profits.”One premise is that whole-house smart is an extremely personalized service. Even houses with the same layout and area will differ in overall design schemes and devices used due to factors like pet ownership, presence of elderly or children, and different living habits, leading to variations in control methods, whether to install before or after, wired or wireless, and ultimately resulting in significant price differences.
Huang Lanlan’s smart lighting in her living room. / Photo provided by the intervieweeAccording to Yang Zhen, general whole-house smart systems include five major systems: lighting control (controlling the on and off of lights), lighting (referring to adjustable color temperature, brightness, and color of fixtures), shading (including smart curtains), security (including smart locks and cameras), and audio-visual (including smart speakers), plus smart appliances, making a total of six parts.His experience indicates that for a house of about 100 square meters, implementing the five major systems, excluding smart appliances, costs at least over 10,000 yuan and can go up to 50,000 to 60,000 yuan. However, the specific cost of a whole-house smart system depends on needs and budget. He has encountered clients who place a high priority on security, installing five leak detectors in a 100-square-meter house, and has also served elderly clients with sufficient budgets who require central air conditioning control and underfloor heating control.This business is complex, and most consumers do not understand the intricacies, inevitably giving manufacturers some operational space.“For example, while cheaper sensors could be used for control, most manufacturers still educate users to use more expensive panels and central control screens; or they exaggerate the advantages of wired smart homes, which have higher prices and profits,” Yang Zhen explained. For manufacturers, panels and central control screens, as well as wired smart homes, are easier to deploy, leading to higher sales and profits.First, let’s look at panels and central control screens. Recently, Shenran visited several smart home brand stores in Beijing. According to the salespeople, panels and central control screens are the control hubs and are indispensable, with individual panels and central control screens priced between 1,000 to 2,000 yuan.However, Yang Zhen emphasized that the core of whole-house smart is the entire interconnected system, not a single device, and the control methods should not be singular but should have multiple options. The first is smart speakers, which are voice systems; the second is mobile phones and wireless panels, which are mobile terminals; the third is sensors, which are sensing terminals; and the fourth is panels and central control screens, which are fixed-position terminals.Among these control methods, he believes the most intelligent are voice, sensors, or timed forms, while panels, central control screens, and mobile phones are considered “weak intelligence” in comparison.For example, some manufacturers’ promoted scene panels include a leaving home mode. Users need to walk to the panel or central control screen, press the leaving home mode, and then lock the door, which is equivalent to two steps. If controlled by a mobile phone, it requires unlocking the phone, opening the app, selecting the mode, or finding the device to control, which takes more than one step. A smarter control method is a smart lock or sensor, where users can simply lock the smart door, or the sensor detects the user leaving home, completing the task in one step, turning off the necessary appliances and power in the house.“If still not at ease, taking out the phone to check the status of home devices and control them remotely is also possible.” In his view, using human sensors, temperature and humidity sensors, etc., to create relatively complex automation commands can greatly enhance the user experience of smart homes; while the necessity of mobile operation is reflected in remote viewing and control when users are away from home.Now, regarding wired smart homes. During Shenran’s store visits, some manufacturers promoted wired smart homes, claiming that the most persuasive reason is stronger stability.However, Qi Xuliang disagrees, and Yang Zhen added that wired smart homes actually have lower cost performance.Most commands in wireless smart homes are transmitted via cloud servers, while wired smart homes integrate commands in a main control box, which is relatively more stable. But this has become a thing of the past; with technological advancements, Xiaomi’s central gateway launched this year and Aqara’s upcoming M3 central gateway can localize commands. This means that the stability of wired smart homes no longer has absolute advantages.Yang Zhen compares wired smart homes to landlines and wireless smart homes to mobile phones; even if landlines have better signals and call quality, mobile phones will still be mainstream. Moreover, with technological advancements, a delay of 0.5 seconds is hardly noticeable. He explained that the difference between wired and wireless lies in the transmission protocols; for example, wired smart homes use PLC, 433, etc., while wireless smart homes use Bluetooth Mesh or Zigbee.Currently, wired smart homes are generally more expensive because they need to be deployed in a pre-installation mode, meaning they must be set up before renovating a new house, requiring a main control box and additional wiring, leading to higher overall construction costs, starting at 30,000 yuan. Huang Lanlan’s whole-house smart system chose Aqara’s pre-installation mode, totaling over 50,000 yuan.
Manufacturer Chaos: Who Will Foot the Bill?Although we discuss the three stages of smart homes separately, whether at different stages or among various factions, they all influence and complement each other in the low penetration consumer smart home market.Smart home individual products, which got an early start, have already formed a market structure in some niche segments in China. According to CIC’s consulting manager Dong Xiaoya, in the robotic vacuum cleaner segment, the leading players are Ecovacs, with Roborock and Yunji following closely; the smart speaker segment is dominated by Alibaba, Baidu, and Xiaomi.However, traditional appliance manufacturers entering smart home scenarios, tech companies leaning towards whole-house smart, and startups are still in a chaotic battle. The common challenge they face is that users are reluctant to pay. In addition to concerns about experience, price, privacy, and security, the richness of the ecosystem is also a factor for some users to remain cautious.Yang Zhen told Shenran that when doing smart homes, the first step is to select a platform, with the criteria being whether the existing platform has enough devices and whether there is room for upgrades in software and hardware after installation; only then should one choose the products and brands that join this platform. It’s like buying a smartphone; you need to choose the system first, whether to use Android or iOS. Generally, the more influential the platform, the more brands it includes.Currently, common smart home platforms include Xiaomi’s Mijia, Huawei’s HiLink, Aqara’s AqaraHome, and Apple’s Homekit. Among them, Xiaomi and Huawei have been building ecosystems and standards from the beginning; Aqara and Tuya Smart, although they entered whole-house smart earlier, mainly rely on their own R&D capabilities to build ecosystems, resulting in relatively poor richness.
According to Yang Zhen, currently, regardless of the ecosystem, there are certain obstacles to interconnectivity and interoperability between devices and systems across brands and categories, and there is an increasing call for unified standard protocols in the industry.The Matter standard, open to the public by the Connectivity Standards Alliance (CSA), is highly anticipated by many. However, he cautioned that while Amazon, Apple, Google, Samsung, and other manufacturers have expressed interest in joining, consumers may still need to install multiple apps to control their devices. He likened it to many smartphone manufacturers using the Android system but still customizing their own systems.From this perspective, tech companies seem to have an absolute advantage. However, Yang Zhen believes that the biggest market barrier for whole-house smart homes currently lies not in the ecosystem but in the manufacturers themselves and the lack of specialized talent. These two factors directly determine the final step of smart home implementation, affecting consumers’ current perceptions of smart homes.“Manufacturers simplify smart homes and treat semi-finished smart homes as many high-tech selling points, but after users experience them, they find that whole-house smart systems costing tens of thousands of yuan do not truly make life significantly smarter, making it hard to justify the expense,” he stated.The development of the smart home market in China is typically divided into four stages: connectivity, scenario-based, perception, and autonomy. More than one practitioner has mentioned that mainstream manufacturers are in the first two stages, while some manufacturers remain in the first stage, emphasizing device connectivity and switch control.What troubles manufacturers the most is probably the lack of specialized talent. “There are no university programs for this; consumer-grade smart homes have only emerged in the past two years,” Yang Zhen observed, noting that the main deficiency is in sales and service personnel facing consumers in stores.Mainstream manufacturers are accelerating the layout of offline experience stores for whole-house smart systems. However, he told Shenran that smart homes have a very strong home furnishing attribute, but mainstream manufacturers generally apply the business logic of 3C digital products to their operations. Store sales and solution design personnel, although they undergo a complete training process from the brand before starting, mostly lack practical experience and home furnishing experience, leading to a theoretical understanding of smart homes.During Shenran’s store visits, many consumers expressed that after the introduction from store salespeople, they still could not understand the operational logic of whole-house smart systems. Some consumers mentioned that they visited offline stores out of curiosity but were deterred by the professionalism displayed by the sales staff, stating, “Many of my questions could not be answered by the sales staff.”Even users who have already placed orders reported a gap between their experiences and expectations. Jiang Ziru mentioned that she was initially attracted by the official advertising but felt that true whole-house smart homes are still a long way off.*The cover image and images not marked in the text are sourced from Unsplash. At the request of the interviewees, Jiang Ziru and Qi Xuliang are pseudonyms.