Demand for hi-tech homes to grow
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.