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©2015 Redseer Consulting Home automation in India is rapidly growing and is used in a variety of applications across residential, commercial and hospitality segments. An overview of the market and drivers impacting its growth Bringing convenience home Home Automation in India - Fast evolving and rapidly growing

Home automation market in india

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Page 1: Home automation market in india

©2015 Redseer Consulting

Home automation in India is rapidly growing and is used in a variety of applications

across residential, commercial and hospitality segments. An overview of the market

and drivers impacting its growth

Bringing convenience home

Home Automation in India - Fast evolving and rapidly growing

Page 2: Home automation market in india

CONTENTS

1. Functional Segments .............................................................................................................................. 1

2. Market Analysis ........................................................................................................................................ 2

a) Customer segment analysis ................................................................................................ 2

b) Product segment analysis ................................................................................................... 2

Page 3: Home automation market in india

1

Technology is a critical factor in the way we function

today; disruption through technology has bought forth

some of the most efficient solutions in many aspects

of life today. From smart phones, internet banking, e-

commerce, to new age innovations such as wearable

technology and smart homes, technological

innovation is impacting our lives like it has never

before; stitching together people, systems and

solutions seamlessly.

Home automation could have well been a part of

science fiction many decades ago, but is a reality

today. Home automation has its roots in smart home

appliances which has over the years led to the

development of integrated smart homes. Home

automation today largely consists of four functional

segments – Lighting, Security, Audio/Video and HVAC

(Heating, Ventilating and Air Conditioning).

Residential usage is the highest in the market and

accounts for nearly 60% of the home automation

industry.

Functional segments in home automation

The home automation market in India is expected to

reach INR 8800 crores by 2017. The key growth

drivers for this demand are increasing consumer

awareness and financial ability, product innovations

(like smart phone apps), builders’ requirement for

market differentiation and an increase in the

preference for energy efficient systems. However the

market is still in its growth phase with a significant

gap for more innovative and connected systems.

Some of the key constraints include high product

costs and moderate levels of satisfaction among the

customers.

Home automation market growth in India

1. Functional Segments

Home automation can be delivered either through

wired or wireless systems. Wired systems are typically

used when the automation is done at the time of

construction, making installation easier. Wireless

technology largely relies on existing wired structures at

home, such as phone lines and power lines. Wireless

technology is however less invasive and more

convenient and given the proliferation of smart

phones and smart home appliances, are fast gaining

popularity.

The four functional segments of home automation in

India include Lighting, Security, Audio/Video and

HVAC (Heating, Ventilating and Air Conditioning).

Major driving forces for installing smart home systems

are convenience, energy conservation and security.

Smart home systems today, help control anything

from climate/temperature, security cameras, locks,

sensors and entertainment systems among others. A

detailed segment wise breakdown of the systems are

given below:

Page 4: Home automation market in india

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2. Market Analysis

a) Customer segment analysis

The residential segment accounts for nearly 60% of

India’s home automation industry (out of which

individual homes and villas account for 75-80% of

market and builders account for ~20% of market).

This segment has the highest growth and is currently

growing at a CAGR of 35-40%. The market for

residential home automation is highly fragmented,

especially in home security systems.

Commercial spaces contribute to 30% of the home

automation market. This segment is largely driven by

security and access systems. Large companies like

Samsung, Bosch and Honeywell dominate this

segment in India. Efficient building management

systems are fast gaining popularity in India as well.

The hospitality industry also uses home automation

and accounts for 10% of the market. Security and

lighting systems are popular in this sector due to the

growing need for differentiation.

b) Product segment analysis

Lighting and security are the top selling products in

home automation, accounting for nearly 80-85% of

the market.

The lighting market is largely driven by the residential

segment. In India, the industry is still dominated by

remote control solutions as mobile apps and other

advanced solutions are costlier. Lutron, Philips and

Legrand dominate the lighting market in India.

Security systems are also becoming very popular in

India and are used by both the residential and

commercial segments. CCTVs’ accounts for about

25% of the security systems. The market for security

systems is however highly fragmented between local,

Chinese and other international players.

HVAC and Audio/Video systems account for about

15-20% of the market and is typically provided in

hotels and commercial complexes; residential

applications are still low. HVAC is largely done in

complexes with centralized air-conditioning.

A market split by product and customer segments can

be seen in the chart below:

Segment wise items and control setups

Page 5: Home automation market in india

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It can be seen from the chart that lighting is the

largest component of the residential market while

security is the largest component of the commercial

market.

Overall, the market is highly fragmented, largely due

to the low entry barriers. Availability of open source

technologies makes it easy to enter the market.

Innovation is the driving force of the industry and the

market is evolving fast both in terms of technology

and features (mobile apps etc.). In India, the home

automation market is expected to grow significantly

over the next few years and will witness growth both in

terms of number of players and technologies offered.

Market split by customer and functional segments

Page 6: Home automation market in india

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Authors

Research & Analysis Niteesh Verma (Associate Consultant) Associate Consultant Pavithra Babu (Consultant - Content & Thought Leadership)