De­mand for hi-tech homes to grow

China Daily (Canada) - - SHANGHAI - By WU YIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

Smart homes will be­come the next big thing in the com­ing two decades be­cause con­sumer de­mands are grad­u­ally shift­ing from “func­tion-ori­ented” to “life­style-ori­ented”, said Che Jianxin, the chair­man of Ma­call­ine Co Ltd, a fur­ni­ture and dec­o­ra­tion chain in China.

“Users who used to pri­or­i­tize the func­tion of a sin­gle piece of home ap­pli­ance or fur­ni­ture are now em­brac­ing a holis­tic ap­proach. Prod­ucts are be­com­ing in­creas­ingly in­te­grated with tech­nolo­gies and ser­vices. In the next decade, many tech­nolo­gies will be serv­ing the pur­pose of mak­ing a home smarter and safer and mak­ing life more con­ve­nient,” said Che.

In mid-De­cem­ber, Che inked a con­tract with AVIC Trust to set up a 2 bil­lion yuan ($287 mil­lion) fund to in­vest in the fast-ex­pand­ing dec­o­ra­tion and fur­ni­ture sec­tor in Shang­hai. The fund is jointly fi­nanced by Ma­call­ine (40 per­cent) and AVIC Trust (60 per­cent), and is ex­pected to ex­pand to 5 bil­lion yuan in the next few years fol­low­ing more rounds of fund­ing, ac­cord­ing to Che.

Ap­pli­ca­tions such as blue­tooth re­mote con­trol de­vices for home en­vi­ron­ment and on­line mon­i­tor­ing of home se­cu­rity sys­tems make use of In­ter­net of Things tech­nolo­gies and have be­come pop­u­lar in many new res­i­den­tial prop­er­ties. In­dus­try ex­perts said that such tech­nolo­gies were only avail­able in of­fice build­ings, ho­tels and high­end res­i­dences three years ago.

The fur­ni­ture and dec­o­ra­tion mar­ket is turn­ing into a capital-in­ten­sive mar­ket in re­cent years as more in­vest­ments are re­quired for re­search and devel­op­ment. The mar­ket has seen more man­u­fac­tur­erturned-de­signer brands and more en­ter­prises are get­ting listed, rais­ing funds to make their prod­ucts and ser­vices more in­no­va­tive, ac­cord­ing to re­search by CITIC Se­cu­ri­ties.

Essence Se­cu­ri­ties Ltd also found that the mar­ket size of the home dec­o­ra­tion and fur­ni­ture sec­tor is likely to ex­ceed 4 tril­lion yuan by the end of 2016, with the mar­ket likely to con­sol­i­date fur­ther as the big play­ers, par­tic­u­larly the A-share-listed ones that play a lead­ing role in the mar­ket, ex­pand their mar­ket share through their ex­clu­sive, cut­ting-edge tech­nolo­gies.

Data from the Na­tional Bureau of Statis­tics showed that the com­pound an­nual growth rate of en­ter­prises in the dec­o­ra­tion and fur­ni­ture sec­tor in the past decade is over 17 per­cent. In ad­di­tion, 20 com­pa­nies have gone pub­lic in the same time frame.

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