Automation is clearly a priority and companies are actively exploring the potential to drive growth in home automation in India.
India is racing toward Industry 4.0 and automation is changing the manufacturing landscape every day. More and more industries have moved to automation for sustainable manufacturing. But the potential for automation companies does not stop there. Apart from factory and process automation, the concept of home automation or smart homes is also rapidly gaining popularity in the Indian market.
Home automation has been considered as a business for affluent people till a few years ago as the cost of automation was not suitable to the pockets of a large part of the population in the country. The situation has turned around completely and over the last few years, a trend of automation is coming up in the country. With the increasing need of comfort and ease, along with rising disposable incomes in metro cities, the market for smart homes has been increasing.
In developed countries, home automation has already gained acceptance. The smart homes market in India has grown significantly in the last 3 years. The market has been witnessing tremendous growth in terms of value as well as volume. The smart homes solutions market in India is blossoming at a rate of 30 percent, year over year. If it continues at this pace, the market is likely to boom in the coming years.
The spending on home automation products constitutes about 1–5 percent of the home cost. Revenue in the market is expected to amount to `56,550 crore (USD 870 million) in 2018 with a CAGR (2018–2022) of 59 percent, resulting in a market volume of `3,61,335 crore (USD 5559 million) in 2022. Household penetration at 0.8 percent in 2018 is expected to hit 7.2 percent by 2022.
The smart homes or home automation market may be segmented into commercial, hospitality, and residential. The largest pie of the sector is with the residential segment with 60 percent market share (of which individual homes and villas equals to 75–80 percent, market and builders comprise the remaining 20 percent). This segment has the highest growth CAGR of 35–40 percent. The residential sector is expected to grow robustly, on a condition that awareness for the same should be created amongst the consumers. Commercial spaces come second with 30 percent market share. The remaining 10 percent share is held by the hospitality segment. In the metro and Tier-I cities, new housing schemes are being developed with home automation systems enabled as per the customer’s requirement. In these spaces, the demand for digital homes is rapidly escalating. Each year, the demand for smart homes is increasing by 15–18 percent in Tier-I cities and by 5–10 percent in Tier-II and Tier-III cities.
A good thing that has happened to the market is the introduction of retrofit automation solutions. The high price of automation solutions, which has now drastically come down with retrofit solutions being available at a price as low as `3600 has been a game changer. The solutions are majorly being offered by a couple of start-ups. The government’s smart cities mission for building smart cities/homes has provided major momentum. The increased implementation of technology/IoT in every aspect of day-to-day life, need for better living standards, and rising disposable income are key drivers. Green revolution and a changing mindset toward energy saving have also created growing interest in home automation. Solutions for lighting and security are currently most popular in this sector.
IoT companies are launching their products in the Indian market, enabling homeowners to control and automate security, ambience, entertainment, and HVAC systems. Electronics manufacturers are actively looking for partners among telecom operators in India, to introduce their smart appliances connected with IoT technology. Some telecom providers are considering entering the home automation sector as an expansion strategy with their IoT and machine-to-machine solutions which will allow users to control elements, such as lighting, heating, air conditioning, music, and security systems through smartphones. Some are also planning to launch fiber-to-home powered home automation that converts basic electronics products into smart products with the help of smartphones or tablets.
In the Indian context, safety measures are a primary concern followed by comfort. A smart Indian home must offer:
Security. Video door monitoring, motion sensors, gas leakage detection, intrusion sensors, curtain sensors, fire detection, and control;
Lighting control. Remote on/off and presence detection;
Electronics. Smart air conditioning, smart refrigerators, and smart fans;
Entertainment. AV controls and gaming consoles; and
Communication. GPS navigation connected to entry and exit and proximity door unlocking.
Energy efficiency is also rapidly gaining popularity. So, people are not only looking for smart homes but energy efficient homes too. While the barriers to the mass acceptance of smart homes are gradually breaking in India, the cost factor and lack of awareness are the two factors that still pose a challenge.
The global market for smart homes was valued at USD 62.45 billion in 2017 and is likely to reach USD 137.91 billion by 2023, at a CAGR of 13.61 percent between 2018 and 2023. The market, on the basis of product, may be segmented into lighting control, security and access control, HVAC control, entertainment and other controls, home healthcare, smart kitchen, and home appliances. Lighting controls held the largest share. The growth of the market for audio, volume, and multimedia room controls is driven to control the systems within a house. The advancements in wireless communication technologies is a major factor boosting the growth of the market for home theater system controls, thereby driving the overall market for entertainment controls.
North America held the largest share owing to factors such as increasing demand for reliable home energy management systems, enhanced home security levels, and growing popularity of integration of smart devices. The market in APAC is expected to grow at the highest rate during the forecast period.
Awareness is the most important driving force behind the concept of home automation, which is comparatively greater in metro cities than in non-metro cities. The Internet and builders are two great pushers here. The concept of smart homes has made its way into the brochures of reputed townships across India, where people can see model flats that are based on this technology. With increasing competition, many companies in sectors like home furnishing, home appliances, consumer electronics, and even service providers are quickly adapting and integrating their products and services with IoT to provid a unique customer experience. Hi-tech residential colonies are seen with smart homes being set up across the country. Hence, automation is clearly sought after and many companies are actively exploring the potential to drive growth in home automation in India.