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Dec. 7 (NBD) – China's smart door lock market is forecasted to hit 100 billion yuan (14.6 billion U.S. dollars) in output value in the coming 5-10 years, with demand for more than 30 million smart door locks, according to National Lock Industry Information Center.

Firms in the Internet, household appliance, security, smart home and traditional lock or hardware sectors have entered the market, which led to fierce competition in the field.

The rapidly expanding market encounters a series of problems including homogeneous products, poor user experience and price war.

Internet companies push their lock prices down, some even close to the cost price, in an attempt to quickly boost sales and obtain users. This made the competition more intense and disorderly.

Guo Geli, co-founder of smart hardware maker Shenzhen Zero Key Technology, pointed out there are less than 5 percent of Chinese families that are using smart locks, thus the market still has huge potential for growth in the next five years.

It is noted that capital has been flocking into such niche sector.

A report on China's smart lock industry shows that 22 financing cases took place in the domestic smart door lock industry from 2014 to July 2017, accounting for 10 percent of total in the smart home market.

In March, digital door lock producer Dessmann received financing fund worth over 100 million yuan (14.6 million U.S. dollars) from Red Star Macalline, Hotata and other investors.

Fingerprint lock manufacturer VOC revealed in May that it plans to go public in the A-share market in 2020 to raise as much as 500 million yuan (72.8 million U.S. dollars).

Later in July, Yunding Network Technology secured 270 million yuan (39.3 million U.S. dollars) in series C+ round of financing, the largest single fundraising in China's intelligent door lock industry.

However, for the booming smart door lock domain, a reshaping of the market is looming.

The falling overall price level brings much pressure on smart lock startups and traditional hardware companies that face difficulty in making profits from products.

Besides, an industry insider held how to ensure quality after-sales service will be a big challenge for those Internet companies foraying into the market with low price or cost price.

Apart from intelligent door locks, most digital locks in the market that open doors through fingerprint, touch screen and other ways can't be fixed by traditional locksmith.

Some consumers mentioned it is a hassle that when they contact the retailers which they bought the product from for lock repair, they are told to contact some other after-sales staff.

Such situation is even more common for online stores. It is hard for consumers to reach manufacturers for after-sales service once installation of the locks is finished.

Sun Jun, business development director of Shanghai Dorlink Intelligent Technologies, believes after-sales service is the key to intelligent door locks business.

Users will become impatient when they meet the problem with the intelligent door lock and need prompt solutions, Sun explained.

Thus the smart door lock industry is strongly service-based, and those companies offering better after-sales service will stand out in the competition, added Sun.


Email: zhanglingxiao@nbd.com.cn

Editor: Zhang Lingxiao