With the arrival of the wave of smart home, many smart home appliances in the market have achieved quite good development in recent years, such as smart lights and smart switches, which have brought many conveniences to our lives. Among them, the emergence of smart door locks has changed our living habits. We can carry our mobile phones with us, or we can unlock them by fingerprints and passwords, so we no longer need to worry about forgetting to bring our keys or losing them. Thanks to these advantages, domestic smart door locks have developed rapidly, with sales of 8 million units in 2017 and 16.95 million units in 2021, up 5.9% year-on-year. Lotto Technology predicted that the omni-channel sales volume should be 17.5 million units in 2022, with an increase rate of 3.2%.
Under the influence of the epidemic, many industries have entered the cold winter, and PC, TV and mobile phones have plummeted continuously, and the latter two have reached the lowest point in the past 10 years. Smart door locks can maintain positive growth in such adversity, which shows their great potential. At present, the structure of the domestic smart door lock market has been basically stable, so many head brands have chosen to go out to sea in order to expand the market, aiming at the international market. At the same time, it is also preparing for financing listing to support a larger expansion plan.
In March and December of 2021, Kaidishi, one of the head brands, successively completed the B and B+ rounds of financing. In March last year, the scale of the C round of financing reached nearly 600 million yuan, and in September, it signed a listing counseling agreement with Guojin Securities. Recently, Deschman also signed a listing counseling agreement with Haitong Securities, officially launching the IPO process, with a valuation of more than $1 billion. Both brands are competing for the "first share of smart door locks". We don’t predict who will take the lead, but what is certain is that after listing, we will have greater financial resources to develop products and expand the market, which will have a significant impact on ourselves and the development of the market, which is worth remembering.
From "A Hundred Schools of Thought Speak Together" to "Three Points in the World"
It is understood that the outbreak period of the domestic smart door lock industry began in 2018. With the addition of Internet brands such as Xiaomi, smart door locks have been understood by more people, attracting a large number of consumers to experience early adopters. For a time, smart door locks became a craze, and they braved the wind and waves driven by the general trend of smart home. At that time, there were not only traditional door lock brands such as Deschman and Kaidishi, but also cross-border brands such as Xiaomi, Huawei and TCL, and a large number of small and medium-sized brands emerged. It is said that the number of brands at that time exceeded 2,000, and the competition was fierce.
Because the threshold of entry-level smart door locks is not high, as long as you find a foundry, you can even brand it directly, so it is difficult to guarantee the quality too much. Fierce market competition inevitably leads to market chaos, and online prices are constantly involved. At the same time, a large number of consumers complain about quality and service problems, such as not charging electricity, not connecting to the Internet, placing orders without a master to install them at home, etc., which seriously lowers the reputation of smart door locks.
(Source: Weibo)
In 2019, Deschman launched the industry’s first 3D face recognition smart door lock, which solved the security risks of 2D recognition technology and realized contactless door opening. In 2020, Kirin R8, a smart door lock equipped with the second generation of 3D face recognition technology, went on the market, which also brought more functions such as visual intercom and one-button protection, and raised the safety and intelligent experience of products to a new level. At this point, more and more products are equipped with 3D face recognition technology, which promotes the development of the industry to the high end, and the higher technical threshold also helps to screen out many unknown small brands, and the market-oriented pattern has gradually taken shape.
According to the online data of Luotu Technology, the brand concentration index CR4 of smart door locks has remained above 50% for a long time, and the top four brands in the industry account for more than half of the market share. Among them, the share of millet is undoubtedly the highest, reaching more than 25%. With high cost performance and the advantages brought by Mijia smart home system, Xiaomi smart door locks are very popular in all price segments. Last year, Xiaomi door locks accounted for half of the TOP10 best-selling models.
(Source: Luotu Technology)
Followed by Deschman, the market share is about 15%, and its advantages are more reflected in high-end 3D face recognition smart door locks. In 2021, the market share will reach 72%, making it the first brand in this field. Cadiz’s share was slightly lower, but it remained above 10%. However, the second and third places are not completely determined, and their rankings often fluctuate, and their competition is particularly fierce. As a result, Kaidishi is preparing for IPO listing, and Deschman is not willing to actively raise funds and prepare for listing, so that he has a better chance to secure the second position in the industry and want Xiaomi to launch a charge.
Although Xiaomi has many advantages in product cost performance and intelligent experience, its products are more oriented to C-end, and individual users buy more. As traditional door lock manufacturers, Deschman and Cadiz have accumulated a large number of B-end customers and have greater influence in enterprise markets such as real estate, hotels and office buildings. If both companies can get financing and successfully go public, with sufficient capital support, they may soon be able to expand their share by relying on the B-end market, and the position of the industry leader may also be changed. This is also one of the reasons why the two companies compete for the first share of smart door locks. After all, the world will always remember the first.
Going out to sea and financing have become the fastest shortcut to expand the brand.
In just a few years, the domestic smart door lock market has developed from "a hundred schools of thought contend" to today’s "three points in the world", and the market structure has been basically stable. However, although the sales of smart door locks are still increasing year by year, the speed has slowed down a lot. After all, most people are not too cold about smart door locks, and many products can’t directly replace the old door locks, so the whole door needs to be replaced, and the cost is not low. When domestic development is in trouble, the brand is gradually aiming at overseas markets.
Kaidishi first announced the opening of the globalization strategy, and said that it has opened up markets in North America, Southeast Asia and the Middle East, reached strategic cooperation with more than 10 international enterprises, and its products have been put on Amazon, eBay and other platforms. There are also Luke and Aqara who choose to go to sea. Both of them have already launched their products overseas, and it seems that they have achieved relatively good response. It is indeed one of the most direct ways to expand the market share and improve the influence of smart door lock brands, but whether it is brand promotion or improving product production and service quality, it needs a lot of money, and listing is the fastest way to get money.
Going out to sea to expand the market and listing to absorb funds seems to be the quickest way for smart door lock brands to grow rapidly. Facing the broad development space of smart door locks in the future, everyone hopes to take a big cake from it. Who can go public first, Cadiz or Deschman, will have a greater chance. As for the result, it is still up to the market.
How to play the second half of the smart door lock?
Although smart door locks do bring convenience to many people, as mentioned above, the use threshold of many smart door locks is still relatively high, and the universality is not strong. If it is a community for some years, it cannot be changed at all. Therefore, the popularity of smart door locks is very slow, and the domestic penetration rate is only about 15%, far lower than 40% in Europe and America, not to mention catching up with 70% in Japan and South Korea. From an optimistic point of view, the domestic smart door lock market has great development potential, but how to release this potential has become the biggest headache for major brands.
At present, a trend is to promote the development of high-end products and improve the quality, safety and functional experience of products in order to attract more consumers to buy them. Fingerprint and password lock products are the most mainstream choices, which are supported by almost all products, accounting for 99% of the market. In order to improve the competitiveness of products, some manufacturers began to add 3D face recognition, finger vein unlocking and other technologies to improve the competitiveness of products. According to data from Aowei Cloud, the share of face recognition products reached 7.6% in the first half of last year, up 114.6% year-on-year; The product share of unlocking the palmar vein is 2.7%, up 229.6% year-on-year, making it the fastest-growing unlocking method at present.
(Source: Aowei Cloud Network)
With the emergence of new technology, the price of old technology products will gradually decrease. During the period of "June 18th" and double 11 this year, many smart door lock products were significantly reduced in price, and the highest price was even reduced by 1,000 yuan. In the first half of this year, the average price of online channels dropped by 12.6% to 1328 yuan. New technologies push products towards high-end, reduce the cost of mature technologies, stimulate market sales at low prices, and accelerate product popularization. At present, it does have certain results, but it is not particularly significant. So, how to play the second half of the smart door lock? Is there no other way than financing to go to sea?
Xiao Bian feels that it is still very important to promote product technology upgrading. The addition of more new technologies will greatly help improve product safety and enhance user experience, and also attract more people to change their products. However, if more people want to use smart door locks, they may need to think about improving the adaptability and compatibility of products and lowering the installation threshold. Secondly, brands should listen to users’ feedback. At present, many products still have difficulties in networking and charging, and a few even suddenly crash and lock their owners indoors or outdoors. There are really many problems. In order for more consumers to upgrade smart door locks spontaneously, it is still necessary to continuously improve the quality, experience and service of products.
summary
After three years of rapid development from 2017 to 2019, and three years of epidemic from 2020 to 2022, the popularity of smart door locks in China has cooled down a lot. Although it can still maintain a low growth rate, it seems to be approaching the stage bottleneck. Therefore, the market really needs newer technology to stimulate, and consumers also need better services to guarantee. Kaidishi and Deschman have successively obtained financing. If they can successfully go public, there will be more funds to complete these layouts. Therefore, Xiao Bian is actually very optimistic about the future development of smart door locks. As the first protection in the whole house intelligent system, there are definitely more possibilities for smart door locks in the future, and they can play new tricks in conjunction with more home appliances, which all require funds to support. How many surprises will the smart door lock brand with money bring us? Very exciting.