Smart Home Appliances Market

Market Overview

The smart home appliances market size was valued at USD 30.79 billion in 2021. It is estimated to reach USD 63.63 billion by 2030, growing at a CAGR of 8.4% during the forecast period (2022-2030). Factors like technological advancements in smart home technology and an increase in spending on remodeling projects drive the market growth.

A smart home is a system in which home attributes like lighting, climate, entertainment systems, and appliances will be monitored and controlled by a home automation system. Home security measures like access control and alarm systems might also be included. Different smart solutions for residential applications are being made possible by the expanding home remodeling projects in Western nations. Due to the rising housing costs and mortgages, there is an increase in expenditure on house remodeling and improvement projects.

Home appliances compatible with smartphone devices, such as smartphones, laptops, and tablets, can be easily included thanks to rapid breakthroughs in wireless communication and IT infrastructure. This enables users to remotely manage and improve the performance of various home appliances, including air conditioners and refrigerators. The hands-free and more user-friendly deployment of smart devices made possible by digital assistance and AI significantly impacts consumer preferences.

Market Dynamics

Market Drivers

Technological Advancements in Smart Home Technology

The industry expansion is being supported by technological advancements implemented in residences. Smart homes and smart home products have been popular trends for many generations. Recent technology advancements emphasize automation and operating systems that are entirely integrated. For instance, In October 2021, IKEA unveiled its new IKEA smart home category and unveiled its first smart cleaner, the STARKVIND, designed for indoor use. This air purifier has five different fan speeds and an automatic mode that adjusts the fan speed on the amount of PM2.5 in the air using a built-in air quality sensor.

Additionally, tech-savvy businesses and corporations have developed smart automation and cutting-edge features for smart homes. Customers in their twenties will likely be drawn to digital smart dials and voice-activated lights with configurable capabilities and AI-driven features. For instance, Samsung debuted its 2020 series of front-load washing machines powered by AI coupled with a 7kg washer dryer. The new smart washing machines have the brand-new Q-Raptor technology from the company, which offers three intelligent features to manage laundry, including a manager, planner to finish time, auto-recommendation for the best wash cycle, and a homecare wizard to monitor the machine’s condition.

Market Restraint

High Cost of Technology and Related Products

The entire cost of the finished product is significantly more significant due to an increase in product launches and technological advancements in home appliances. In order to produce an automated and thoroughly integrated experience, new technologies are included in the manufacturing process of smart home appliances, which results in higher initial investment and ongoing maintenance expenses for consumers. Most businesses, brands, and producers employ the best technology and raw materials to deliver the outcomes customers want from smart home appliances. Advanced AI technology, personalization, washing machine, smart dials, and other technologies used in smart home appliances come at a higher cost and require more complicated installation settings, raising the finished product's cost.

Market Opportunities

Increasing Spending on Remodeling Project to Improve the Smart Home Experience

Consumers are spending more money on home remodeling or improvement projects to modernize their traditional household structures as a result of rising costs associated with housing prices and mortgage rates. Homeowners now have twice as much equity as they did in 2014. This is a pattern of homeowners who feel wealthier and are more likely to spend money on home renovations. Consumers expect appliances with extra features like multipurpose baths, minimalist designs, touchless faucets, and voice-control sensors due to the growing trend of smart homes.

Home appliance makers offer luxury tech-driven home appliances that are AI-driven and multi-task automatically, making it simpler to duplicate a tailored experience at home. For instance, Samsung and LG demonstrated their AI-based refrigerator capabilities at CES 2020 in January 2020. LG’s second-generation InstaView ThinQ refrigerator and the most recent version of Samsung’s Family Hub refrigerator use AI-equipped cameras that can recognize food and scan the interior to inform customers.

Regional Analysis

The global smart home appliances market is divided into four regions, namely North America, Europe, Asia-Pacific, and LAMEA. 

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant shareholder in the global smart home appliances market and is expected to grow at a CAGR of 10.10% during the forecast period. The online distribution channel for smart home appliances is made up of company websites and e-commerce websites. Due to the quick rise of e-commerce and emerging digitalization, particularly in developing nations like China and India, the online segment is anticipated to grow faster over the forecast period. The global online sales of smart home appliances are also increasing due to the rising popularity of online shopping, smart home appliances, and connected devices among millennials and the younger population. In addition, factors like the ease of conducting business online, a busy lifestyle, and the flexibility of shopping whenever and wherever are propelling the online sale of smart home appliances.

North America is expected to grow a CAGR of 7.60% during the forecast period. North America is expected to dominate the smart home appliances market due to its highly developed information and communication technology (ICT) infrastructure and the widespread adoption of connected devices. The majority of significant IoT market players are headquartered in the US. According to estimates, the development of the market for smart home appliances will be fueled by the region's high internet connectivity and the maturity of the bulk of the regional technological marketplaces. Additionally, the top businesses in terms of revenue, such as Microsoft, IBM, Facebook, Google, and Apple, are located in North America. Most significant participants in the IoT market are also based in the United States.

Europe is expected to grow significantly over the forecast period. One of the few economic and political partnerships between nations that collectively occupy the majority of the continent is the EU. IoT provides a smart environment by fusing the real and virtual worlds, which increases demand for smart home gadgets. In addition, the European Commission has been actively collaborating with the IoT sector and several organizations to explore the possibilities of cutting-edge technologies like AI. The U.K., Germany, France, Spain, and Italy are the main contributors to the growth of the market for smart home appliances because these countries account for the majority of smartphone users in the region.

Numerous African nations have experienced tremendous economic growth, and their young people often aspire to become first-time homeowners. It is therefore anticipated that there will be an increase in demand for smart home appliances in the region. Due to the emergence of numerous online retail platforms, the region also presents enormous prospects for demand fulfillment. The Middle East is distinguished by high consumer expenditure on luxury facilities and a young population that is expanding quickly, in contrast to the consumer dynamics in Africa. The government's desire to diversify its economies has given the region's numerous construction initiatives and technological uptake a significant boost.

Segmental Analysis

By Product

Smart Washing Machine - smart washing machines allow users to monitor and manage laundry cycles from their smartphones or tablets, regardless of their location via connecting to home Wi-Fi networks. This functionality brings flexibility and also optimizes energy and water usage through advanced sensors and algorithms adjusting the settings based on load size and fabric type. They easily integrate with broader smart home systems, thus enabling voice control via virtual assistants such as Amazon Alexa or Google Assistant. With these advancements, smart washing machines make daily household work easier. The growing adoption of IoT technology, increasing demand for energy-efficient appliances, and consumer preference for convenience and connectivity in household devices driving the growth of the segment. Key players are Samsung Electronics, Whirlpool, IFB, and LG Electronics.

Smart Refrigerator

Smart refrigerators are designed to enhance user convenience and energy efficiency in smart home ecosystems, which enables remote monitoring and control using smartphone applications. They have touchscreens on which users can note family calendars, shopping lists, and recipes, along with internal cameras that allow the user to see the contents remotely. It also introduces inventory management systems equipped to track expiry dates and suggest grocery replenishments. They also offer special energy-saving modes and adjust the amount of power needed according to their usage patterns. As a result, this segment is set for significant expansion, fuelled by technological advancements and increasing consumer awareness of smart home benefits.

Smart Air Purifiers 

The smart air purifiers segment within the smart home appliances market is experiencing significant growth due to increasing awareness of indoor air quality and the health benefits associated with cleaner air. With advanced features like Wi-Fi connectivity, real-time monitoring, and smart home systems, the latest air purifiers empower users to control and monitor their devices remotely via a smartphone application. The rising rate of urbanization, along with a growing concern over air pollution and respiratory diseases, has stoked demand for these innovative products. During the COVID-19 pandemic, there has been a rise in consumer focus on the healthy home environment, which has increased the market. Important market players continuously innovate to provide features such as HEPA filters, activated carbon filters, and UV-C light technology, which may significantly enhance the efficiency of air purification. Key players in the Smart air purifier segment are Kent, Dyson, and LG Electronics.

Smart TV

Smart TVs are mainly about internet connectivity and interactivity, combining the latest streaming services, apps, and multimedia directly on a television screen. They often integrate technologies such as voice control, AI-powered recommendations, and compatibility with smart home ecosystems. The smart TV segment serves consumers seeking enhanced entertainment experiences and seamless integration with other smart devices in their homes. Smart TVs remain a dynamic segment within the broader smart home appliances market, as connectivity and content offerings increase influencing trends in entertainment consumption and home automation. Growth of the Smart TV segment is driven by increased connectivity, technological advancements such as high-definition displays, integration with smart home ecosystems, demand for interactive features, consumer lifestyles, on-demand content, and improved market accessibility through competitive pricing. Prominent players are Sony, Samsung, LG Electronics, etc.

By Distribution Channel

Online distribution channel comprises Sales through dedicated manufacturer websites, major online retailers such as Amazon, Flipkart, and Alibaba, and specialized e-commerce platforms focused on electronics and home appliances. The online channel offers consumers a wide range of products, competitive prices, and convenience and in-store experience, matched with detailed product descriptions, customer reviews, and various payment options. Manufacturers and retailers leverage online channels to reach the global consumer, gain better brand visibility, and leverage rapidly growing digital shopping. This segment is growing due to convenience, wider product selection, competitive pricing, ease of comparison, digital marketing strategies, global reach, improved logistics, technological advancements, and changing consumer shopping habits.

The offline distribution channel in the smart home appliances market remains pivotal despite the growth of online retail. Offline channels consist of brick-and-mortar stores such as electronics retailers, home improvement stores, department stores, and specialty appliance stores. Physical outlets provide consumers with hands-on experience, professional advice, and product availability on the spot these factors are usually very critical in making a higher involvement purchase like smart home appliances. Offline channels play a significant role in customer service and after-sales support, fostering customer trust and satisfaction.

Recent Developments

• November 2022- Amazon announced the rollout plans for Matter, a smart home standard that enables different devices and systems to work harmoniously.
• December 2022- Andes Technology Corporation, a leading supplier of high efficiency, low-power 32/64-bit RISC-V processor cores, announced the details of the AndesCore™ D23, a new 3-stage 32-bit RISC-V CPU core, to target embedded processing and IoT applications that require low power and high efficiency in a small footprint.