What kind of smart home is in your eyes, "expensive", "complex" and "not practical"? It is undeniable that these are the crux of the smart home industry that has yet to be resolved. In particular, the cost of purchasing, installing, and using scares many intention consumers.
Let's calculate a set of accounts, a complete set of smart home systems, including regular lighting remote control, electrical remote control, electric curtain remote control, multi-room home background music and video sharing, security alarm and network video surveillance, purchase Domestic brands need at least 20,000 to 30,000 yuan, while international brands range from 50,000 to 100,000 yuan. In other words, if you put on a complete smart home system, you have to spend at least one extra house renovation.
In fact, the problem of high cost is not only the consumer's encounter, but also the "Sword of Damocles" on the head of the smart home business. Looking at the performance report of listed companies in the smart home sector, as early as the beginning of 2017, many companies have affected their performance due to rising costs.
Recently, in the “2017 Annual Results Forecast†of Anjubao, it was also revealed that due to the increase in corporate costs, the net profit in 2017 decreased by approximately 43.18%-71.59%. As one of the most competitive security brands in China, Anjubao has won the first place in “China's Top Ten Smart Home Brandsâ€. Its core competitiveness is strong, but it is inevitable that profits will be greatly reduced due to high costs. It is speculated that it is imperative to solve the problem of high cost of smart home enterprises.
Where is the cost of a smart home business?
1. Research and development costs. A complete set of smart home systems, including dozens of advanced technologies, such as Internet of Things, communication protocols, data storage and transportation, big data, artificial intelligence, biometrics, and more. These technologies have different degrees of development. To be perfectly embedded in traditional home products, they must undergo complex R&D tests. Therefore, high-tech research and development costs are the largest part of the operating costs of smart home businesses.
2. Production costs. Since the current consumer market is still not fully opened, smart home products are small-scale production, which cannot achieve breakthroughs in quantity, and production costs are generally high. Let us give you an example. The earliest fixed telephones and broadband are very expensive, and there is an additional charge when installing. When the information age is fully spread, the fixed telephones are now free. The broadband is also the network charging fee, that is, the installation, and the gateway. Send a set-top box to further stimulate consumption. The same is true for smart homes. Only when the “quantity†goes up, the cost will come down.
3. Labor costs. Even if the smart home is covered with a gorgeous coat, it is still a traditional manufacturing industry. The rising labor cost is the number one challenge faced by most manufacturers. The rising cost of raw materials and the shrinking demand for products have also squeezed their profit margins and brought some survival pressure. .
4. Financing costs. Despite the fact that today's smart home industry has the same word and standard, the investment market has become popular all the time. The capital market is a double-edged sword, which can help companies attract investment attention, but on the other hand, it also urges enterprises to generate benefits. As for the current situation in the domestic market, the production cost of the enterprise is high, and the marketing effect is not obvious. It is temporarily unable to meet the expectations of the investment market.
However, smart home enterprises that want to continue to finance products can not break the capital chain. They have to discuss their own pockets to promote and sizzle the market, forcibly turn their money to themselves and enter the infinite loop of capital financing.
How do smart home businesses make a profit to the cost?
In fact, the above four kinds of costs have caused bottlenecks in enterprises, which is not uncommon in China. In particular, the electronics manufacturing industry was initially in the golden age, and profits often outweighed costs, resulting in operators not aware of the high cost of harm. When the industry matures, the problem of enterprise cost will emerge. If you don't ask, the cost gap will become so large that it will end in gloom.
The smart home industry is also experiencing the mature stage of the whole industry from the inside to the outside. I believe that under the multi-faceted cooperation, the cost problem will be solved.
1. Industry-university-research cooperation to reduce research and development costs. In recent years, the cooperation between industry, academia and research has risen to the core of China's science and technology system reform. Under the cooperation of both schools and enterprises, China has overcome many technical essentials in many fields of technology such as consumer electronics, automotive electronics, health care, and new materials.
Smart home enterprises can cooperate with industry, university and research institutes to solve the technical problems faced by enterprises and reduce R&D costs as much as possible. More importantly, taking the opportunity of school-enterprise cooperation as an opportunity to further understand the direction of industrial policy, we can change from "production, study and research" to "political production and research" and then to "political production, learning and research". Although smart homes are mainly based on the consumer market, enterprises can still obtain a certain right to speak in the discussion of smart life scenes such as smart cities, intelligent transportation, and smart communities.
2. "Industry 4.0" and smart factory. This is a method for reducing costs in all manufacturing industries, optimizing production processes, implementing lean production, promoting automated production, and reducing labor costs. However, this requires a large amount of capital investment in the early stage to build a new type of factory; therefore, small and medium-sized smart home manufacturers can choose to build several intelligent workshops first, to achieve partial automation production, and then gradually fill up after the market scale is expanded.
In addition, customized products and on-demand production are in line with the needs of today's smart homes in China, and can also reduce production costs and provide consumers with new retail models.
3. Establish a joint experience store to promote the concept of intelligent home. Haier U-home smart home experience store, Dudu E home smart experience store, UIOT purple light IOT experience store, KoTI Kedi experience store... More and more smart home experience stores appear around us, we can experience store Touch smart speakers, smart locks, smart home appliances and other items to feel the integrated smart home experience.
Overall, the current smart home experience store cannot implement the function of promoting smart concepts. On the one hand, the experience stores are mostly based on a single brand, and the products and functions are relatively simple. On the other hand, the number of real-life experience stores in the Internet online store is small, and they are concentrated in the first-tier cities, targeting the high-end consumer market.
Experience store is a good way to promote smart home. Enterprises can try to open a store to reduce costs while attracting the attention of ordinary consumers and increasing their desire for consumption.
4. Appropriately pass on to consumers, but not to scare away consumers. According to the report issued by OVUM and Zhiyan Consulting, a third-party consulting organization in the telecommunications industry, the size of China's smart home market will reach 90.8 billion yuan in 2017. In the next five years (2017~2021), the smart home industry will grow at a compound annual growth rate of 48.12%. By 2021, 120 million households will use smart furniture products and services, and the market size will reach 436.9 billion yuan, accounting for 25% of the global market. %.
The numbers are tempting, but if the products are not accepted by the market, these huge numbers are always numbers. At the moment, we look at single items. For example, the price of smart door locks is two or three thousand. It is more expensive, but in fact, its market size has reached 10 million units, and the profit from door lock companies is even less. Therefore, it is understandable that the production cost is properly passed on to consumers. The valuable products will naturally be consumed by humans. Only the price must not be too high, grasp the consumer's shopping psychology, and do a good job in product cost positioning.
summary
Smart home itself is the product of consumption upgrade. If the cost is too high, the mass consumers will be blocked. As a result, the smart home industry is still in the promotion stage, and it will not be able to meet a large-scale outbreak.
The only solution is to make this industry bigger. Enterprises should reduce their prices, lower the threshold of products with future attributes, make ordinary people affordable, and let them realize that smart homes are beneficial. And thus willingly pay for the products and services. And the participants in the entire industry chain are willing to invest in research and development, provide better services, and form a virtuous circle, in order to achieve more and more efficient smart products and cheaper consumers.
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