2024 Mid-Year Smart Lock Market Report: The Evolutionary Battle & Synergy Unfolding!”
Industry Advancement: Deepening and Maturing Side by Side with China’s Smart Lock Industry After years of evolution, the trajectory of deepening and maturing of China’s smart lock industry has become increasingly clear. The characteristics of consumer grading and upgrading at the demand level are becoming more and more obvious. The deep integration of biometric recognition and the Internet of Things at the technical level has enhanced the safety and convenience of products.
The refined functional differentiation at the product level is becoming increasingly mature, and the diversified product matrix accurately meets the increasingly rich and personalized needs of consumers. The all-channel retail system at the channel level integrates traffic, scale, brand image, and profit, building an efficient market network.
At the brand level, traditional enterprises and cross-border enterprises operate flexibly, strengthening market competitiveness. This series of changes reflects that upstream and downstream enterprises in China’s smart lock industry are moving towards a more professional, personalized, and intelligent direction, and also highlights the broad development space of the industry.
National Hardware Industry Information Center data shows that the output of smart door locks in China in the first half of 2024 reached 10.55 million sets, a year-on-year increase of 5.5%; the industry’s output value was 8.8 billion yuan, down 2.2% year-on-year due to the impact of lower unit prices.
From the perspective of the application of biometric technology, the shipment volume of fingerprint recognition modules in the first half of 2024 was 11 million sets, the shipment volume of facial recognition modules was 4 million sets, the shipment volume of finger vein recognition modules was 1 million sets, the shipment volume of palm vein recognition modules was 250,000 sets, and the biometric method of facial recognition + palm vein combination is increasingly favored by the market, with a shipment volume of 850,000 sets in the first half of the year.
Fingerprint recognition, as the most mature part of the biometric supply chain, has the highest industrial concentration in the smart lock supply chain. More than 80% of the products are supplied by Octopus and Betley, which is also one of the most stable supply chains at present. Octopus Microelectronics has shown a strong momentum of development from the second half of 2023 to the first half of 2024, with its share in the fingerprint sensor supply chain reaching about 40%. As the market share continues to expand, the company is expected to occupy a more prominent position in the fingerprint sensor supply chain.
In the development process of the smart lock industry in China, the continuous adjustment of various constituent elements promotes the progress and maturity of the industry. Online channels and offline channels have formed a diversified market structure, price orientation and value proposition define the depth and breadth of the market, traditional e-commerce and content e-commerce broaden the flow and market boundaries, and the replacement of mature technology and growing technology catalyzes the upgrade of innovation and experience. The competition and symbiosis of these elements jointly lead the industry forward.
Scale expansion: online and offline collaboration
Total data shows that the retail volume of smart door locks in China’s home market reached 8.96 million sets in the first half of 2024, a year-on-year increase of 4.8%. While the scale of the smart door lock industry is expanding rapidly, a diversified market structure is also taking shape.
Among them, the market share of offline retail and housing construction projects is basically unchanged compared to the first half of 2023, while the operator channels and engineering procurement channels have seen a contraction in their share.
Online channels, due to their unique consumer shopping advantages, have become the fastest-growing part of the industry, with a retail volume share of nearly 40%, up 6 percentage points from the first half of 2023. From the total data of online channels, the retail volume scale is 3.564 million sets, up 22.7% year-on-year; the retail sales scale is 3.69 billion yuan, up 15.2% year-on-year.
Industry positioning: Price and value game
For new entrants in the Chinese smart lock industry, the threshold for the low-end market is relatively low, encouraging more small and medium-sized enterprises to participate in competition and increasing the supply of low-end products. Under the cautious consumption trend, consumers are often more sensitive to price and tend to look for products with high cost-performance.
Driven by both supply and demand, entry-level smart locks have quickly occupied the market due to their cost-performance advantages, and the price structure of the Chinese smart lock industry has tilted towards the low-end. According to the online monitoring data of AVC (Ovum Cloud Network), the average price of traditional e-commerce smart lock categories in the first half of 2024 was 1039 yuan, a decrease of 11.7% year-on-year, with the retail volume of products below 1000 yuan accounting for 63%.
But at the same time, the prices of new technology and functional products are still at a high level, enhancing the value space and brand image of the industry. According to the online monitoring data of AVC (Ovum Cloud Network), in the first half of 2024, the average price of cat-eye large screen products in traditional e-commerce channels was 1,459 yuan, the average price of facial recognition products was 1,461 yuan, the average price of fingerprint products was 1,624 yuan, and the average price of palm vein products was 2,575 yuan. Mid-to-high-end and high-end smart door locks, with their higher value proposition, show a stable and continuous growth in market demand.
Channel Transformation: Traditional and Emerging Channels Flourishing Together for the Industry
The synergistic effect of traditional e-commerce and content e-commerce has promoted the expansion of market capacity. Traditional e-commerce, with its mature operating system, stable supply chain, and large user base, has laid a solid foundation for the smart lock market.
At the same time, content e-commerce has achieved market segmentation and in-depth mining through exploring personalized services and intelligent recommendations. There are also significant differences in product strategies among different e-commerce platforms, and the mutual learning and integration between platforms have effectively promoted the penetration rate of the smart lock market in China.
Technical Penetration: Growth and Maturity Complementary
China’s smart lock industry is at an intersection of a technological revolution and a surge in market demand. The diversified development of technology has enriched the unlocking solutions and security functions of smart locks. Currently, mature technologies such as cat-eye large screens and facial recognition have taken a leading position in the market and are showing a trend of becoming standard features of products.
In the first half of 2024, traditional e-commerce channels, the retail volume share of Cat-Eye Large Screen products was 32.9%, up 4.6 percentage points from the same period last year, with the retail sales share reaching 46.1%, up 10.5 percentage points; the retail volume share of facial recognition products was 28.6%, up 7.3 percentage points, with the retail sales share reaching 40.3%, up 12.5 percentage points.
The application of these two technologies and functions in smart lock products not only improves the security performance of smart locks but also further enhances the user experience. As a new force, vein recognition technology can provide more efficient unlocking solutions and privacy protection, injecting new iteration directions into the smart lock industry and its market size is growing rapidly.
In the first half of 2024, the retail volume share of vein products in traditional e-commerce channels was 5.7%, up 1.4 percentage points from the same period last year, with the retail sales share reaching 8.9%, up 2.1 percentage points; the retail volume share of palm vein products was 2.3%, up 1.8 percentage points, with the retail sales share reaching 5.6%, up 4.1 percentage points. At the same time, driven by both supply and demand, combined products, due to their integration of multiple functions, are favored by the market, and their share is showing a steady upward trend.
Among them, the “Cat-Eye + Large Screen + Facial Recognition” product combination not only performed the best in the market share in the first half of 2024, with a retail volume share of 19% and a retail sales share of 25%. Its growth rate also exceeds that of other combinations, with a 5 percentage point increase in retail volume share and a 9 percentage point increase in retail sales share. With the continuous maturity of technology and the gradual reduction of costs, the market share of combined smart locks will be further increased, driving the industry to move towards a more intelligent, safer, and more convenient direction.
Brand competition: differentiation and evolution in parallel
The differentiation and evolution of brands in the Chinese smart lock industry are ongoing. On one hand, the retail volume rankings of the online overall market have changed compared to the same period last year, which not only reflects the intensity of market competition but also reveals that the brand landscape is still in flux. On the other hand, some brands have successfully increased their market share by leveraging technological innovation, marketing strategies, and optimized channel layout.
With the continuous maturation of the smart lock industry, competition among brands is also becoming increasingly intense. Under the seemingly well-structured product lines, there are also many opportunities for catching up. The competition between brands is more focused on building core competitiveness, including technological innovation, user experience, and service quality, which will promote the industry to a higher level of development.
The total market share of the top 10 brands in the online retail market in the first half of 2024 is 71%, and the total market share of the top 10 brands in retail volume is 56%.
As a leading brand in the industry, Deshan ranked first in the online overall market (including professional e-commerce, platform e-commerce, and content e-commerce) in the first half of 2024 with an 18% share of retail sales; and in the online market of 2,000 yuan and above, Deshan’s retail volume and retail sales share were also in the first place, with both exceeding 26%; in the content e-commerce market of 2,000 yuan and above, Deshan’s advantage was even more prominent, with both volume and sales share reaching 40%, demonstrating the strong high-end competitive power of the Deshan brand.
Luker: The high-end market position is stable.
In the first half of 2024, in the traditional e-commerce market (including professional e-commerce and platform e-commerce) of 3,000 yuan and above, the company’s volume and revenue share are both the first in the industry, reaching 30% and 29% respectively. Luker has been deeply involved in the vein recognition technology track, and in the first half of 2024, it occupies the first position in terms of volume and revenue in the palm vein field of traditional e-commerce platforms; and it has shown absolute advantages in the finger vein market of 2,000 yuan and above, with a volume and revenue share exceeding 60%.
Particularly noteworthy is that the first product of the industry’s innovative finger pulse lock category, S6 Max, has maintained the top position in the volume and revenue rankings of the 2,500-3,000 yuan price range of vein lock models.
Huawei: By enhancing the cost-performance market and deepening the high-end market, it has effectively increased its market share. In the traditional e-commerce (specialist e-commerce + platform e-commerce) price range of 3,000-3,500 yuan in the first half of 2024, it showed significant competitive advantages, winning widespread recognition from consumers with its combination of “cat eye + large screen + facial recognition” products, with retail volume and proportion both exceeding 30%. This year’s new AI facial recognition lock further optimizes the product portfolio and enhances market competitiveness.
The momentum continues based on the outstanding performance in the first half of 2024. AVC predicts that the total retail volume of the smart lock industry in China in 2024 will reach 20.5 million sets, with a year-on-year growth of 9.6%; among which, the online market has a prominent advantage, with a retail volume of 7.51 million sets, a year-on-year increase of 15.0%.
