How certain is the circuit of the hottest smart do

How deterministic is the smart door lock

we searched through e-commerce reviews to find the pain points of the industry. Under the high temperature, we pretended to be a buyer, investigated the Shilihe building materials market, visited a number of smart door lock enterprises, and consulted industry experts through various relationships. In the past month or so, we have obtained a lot of valuable first-hand and second-hand information through the above methods

at the same time, we have collated a large number of information from statistical institutions, databases and third-party reports, verified the credibility of each data in many ways, and deliberated over and over again for the rationality of each hypothesis. The results and thoughts are all output in the 75 page ppt "whale quasi Research Institute 2018 in-depth research report on China's smart door lock industry" (hereinafter referred to as the "report"). This paper aims to extract some important points in the report, To demonstrate the certainty of the smart door lock

I. clear concept at the beginning -- what is smart door lock? Which categories

generally speaking, the door lock with any function such as fingerprint unlocking, password unlocking, APP Bluetooth unlocking and connection is called smart door lock

according to customers, it is divided into home smart door locks and apartment smart door locks. The customers of home locks are 400million families in China. The customers of apartment locks are b-end (businesses) represented by the freedom of chain home, which operate 30million Apartments (all b-end houses for rent, including centralized and decentralized)

as shown in the above figure, household locks generally have exquisite appearance and fingerprint recognition, with an average price of 1500 yuan; The apartment lock has no fingerprint identification, only a password, and its appearance is relatively rough. It is divided into internal and external locks, with an average price of 500 yuan

II. Current situation of the smart door lock industry - the demand confirms that the market is vast

in 2017, China sold 6million sets of smart door locks at the home end, 2million sets at the apartment end, and the total output value of the industry exceeded 10billion yuan. It doubled on the basis of 2016, growing rapidly, and is expected to continue to double in 2018

by the end of June 2018, the penetration rate of smart locks in 400million households in China was about 5%, and the penetration rate of 30million b-end rental apartments was about 10%

5% is a wonderful number. Generally speaking, when the penetration rate of a new product reaches about 5%, it is a relatively good investment time point. The penetration rate of 5% on the one hand verifies that the demand is real, on the other hand, it indicates that there is still a lot of room for development

next, we analyze why the demand is so strong from the two markets of apartment locks and smart locks

third, it has noble decoration and advanced appearance, apartment lock - low cost is the king, and it is not "reasonable" to be able to use data as far as possible.

first of all, it is easy to analyze the demand for apartment lock, because the customers of apartment lock are free and other operators, corporate operation, decision-making mainly considers economy and efficiency

companies such as freedom operate rental apartments, and the following industry pain points can be solved by smart locks. It is believed that readers with rental experience can easily understand:

smart door lock solution

take the business model of the most mainstream operator as an intermediary as an example, that is, the operator rents a house from the apartment owner, and then sublets it to the tenant to earn a "price difference"

the key assumptions are as follows:

A. load element: 10-50kn interval selection

key assumptions

the economic account is calculated based on the volume of 200 apartments. With 3 years as the comparison time, the "price difference" of the operator is 3million. The profitability of the operator mainly depends on cost control. The key data are as follows:

key data

the cost of intelligent lock scheme is 350000, and the cost of mechanical lock is 1.62 million, which is only less than 1/4 of the cost of mechanical lock

there is a key assumption in the calculation here, that is, one person in the smart lock scheme can manage 200 houses, while one person in the mechanical lock scheme can only manage 20 houses. This assumption is the empirical data obtained from our interviews with industry insiders. After a sensitivity analysis of this assumption, we found that even if there are only 30 houses managed by each person in the smart lock scheme, the cost is still lower than that of the mechanical lock, For the specific calculation process, please refer to our report. It can be seen that from the perspective of economy, the smart door lock scheme is successful

by the end of June 2018, about 25% of the 6million apartments operated by big B had been equipped with smart locks, and this proportion will continue to increase in the future. Although there are some problems at present, such as the tenant losing something, and the operator cannot "prove his innocence", these non economic factors cannot change the general trend

IV. family lock - if the wallet is destroyed, will the key be far away

we can explain the demand for apartment locks by accounting. Whether to buy Household locks depends on consumers' preferences. We can only "reason" and prove it through some data

in 2017, China shipped 6million sets of home smart locks, which doubled year-on-year. We believe that the blowout of home locks is mainly due to the following reasons:

first, traditional mechanical locks have many pain points in use. The biggest pain point is the need to bring keys. Many people will have some experience, of which 149 million yuan is used in the construction project of high-performance nylon composite production lines for rail transit and automobiles. When they go out, they find that they forget to bring keys, they lose keys, it is inconvenient to go out for running, their family members forget to bring keys and need to send them away, and no one needs to wait at the door when relatives and friends visit their homes; Intelligent lock can solve these problems perfectly. In July, 2018, Tencent home and deshmann jointly released the "China smart lock consumer analysis report", which pointed out that "convenience without keys" was the biggest purchase factor for consumers, and 66% of users said they would consider buying fingerprint locks in the future

second, as the wallet is eliminated, the pain point of holding the key will be highlighted. Once upon a time, wallets and keys were the "three major items" that everyone needed to check before going out. With the popularity of mobile 2, the leather washer or spring of friction plate is worn: the leather washer or spring needs to be replaced for payment, QR code brush bus and other tools, more and more people go out without wallets, and the inconvenience of keys is highlighted

third, there are fewer problems and more functions. With the progress of intelligent door lock technology, "false fingerprint problem", "low recognition rate", "weak reliability" and other problems have been basically solved. In addition, there are more and more practical functions and application scenarios of the connected intelligent door lock

fourth, the price is acceptable to ordinary families. With the great development of intelligence, the price of components such as fingerprint identification module and wireless link module has fallen rapidly, which has led to the decline of the price of intelligent door lock. At present, the price of the mainstream intelligent door lock has reached about 2000 yuan, which is more and more acceptable to ordinary people

fifth, young people have a high degree of acceptance, and apartment locks have a spillover effect. With the post-80s and post-90s generation becoming more and more decision-makers of house purchase and decoration, those who have been exposed to electronic devices since childhood have a relatively high acceptance of smart door locks. The popularity of smart door locks at the apartment end has produced a spillover effect, which is the so-called "from thrift to luxury, from luxury to Thrift". After young people become accustomed to using smart door locks in scenarios such as renting houses and traveling, they have a high probability of choosing smart door locks after buying houses

in addition, in addition to the core function of "keyless unlocking", the smart door lock also has some "icing on the cake" functions. For example, it can remotely distribute unlocking permissions to cleaners, which is very convenient for busy people; Another example is to monitor whether the elderly living alone live a regular life, which is very important for children who work in other places and cannot take care of their parents close; Another example is that the door lock will push the alarm, which is good news for many patients with obsessive-compulsive disorder; These needs are relatively small, but they are "rigid needs" for the corresponding people

in addition, we will look at some data to prove the strong demand for home smart locks

as of June, 2018, the penetration rate of smart home locks in Europe and the United States was 35%, Japan and South Korea was 60%, and China was only 5%. Countless cases tell us that in fact, people all over the world like similar things, and everyone likes convenient, beautiful, interesting and other products, but the "economic time difference" exists. The popularity of smart home locks in China can refer to the development path of Europe, America, Japan and South Korea

in addition, about 30% of the hardbound buildings of real estate developers in 2018 have been pre installed with smart door locks. From this point of view, home smart door locks have been recognized by hardbound room users, and these users are the pioneers among home users

v. future scale calculation - small door locks and large markets

based on the above analysis, we have made some key assumptions to calculate the future smart lock market scale. Please refer to the report for specific assumptions and basis. Limited to space, only a few key assumptions are listed here

the annual sales of new houses and second-hand houses in China is about 25million sets. We assume that 50% of the transactions will be accompanied by the sales of smart door locks by 2022

the national health and Family Planning Commission announced that there are 430million families in China, and 30million of them are classified into the apartment market. We assume that the penetration rate of smart locks in 400million stock families will reach 35% by 2022, reaching the level of 2018 in Europe and the United States

apartment lock end, we assume that the number of houses managed by big B increases by 40% annually, and the penetration rate of smart lock increases by 10% annually; The number of houses managed by small B remains unchanged, and the penetration rate is slightly higher than that of family lock

based on a large number of industry experience data and the above assumptions, we make the following calculations:

total sales of home smart locks

by 2020, the annual sales of smart door locks in China will exceed 40million, and the total market size will exceed 40billion yuan. 2018, 2019 and 2020 will be the golden three years of smart door locks. If there is no concept of the 40 billion market size, here is a reference. The total box office of China's film market in 2017 will be 50 billion yuan

VI. prediction of market pattern

according to the data released by the national lock information center, by the end of June 2018, China's smart door lock brands have exceeded 3500, and there are more than 1500 manufacturing enterprises, of which the industry wide concentration of Cr20 has reached 60%. We believe that from 2018 to 2020, China's home smart door locks will usher in a big explosion, and many small and medium-sized lock enterprises may occupy some market share with low prices in the short term, The market pattern will tend to be decentralized; By 2020, the industry will usher in a major reshuffle. Some shoddy low-cost locks may have various problems after three years of use. At the same time, the price of brand locks will also decline due to economies of scale. For example, large enterprises develop a set of automatic assembly lines to reduce manual assembly costs, and economies of scale will be the strongest moat

we think that the market pattern can be compared. After the outbreak of intelligence that year, a large number of fake machines also emerged, which experienced the process of first dispersing and then concentrating. In 2017, the Cr5 of China's intelligent sales was close to 80%, and Huawei accounted for the highest 23%. However, the door lock industry will not be as concentrated as it is due to many b-end customers, many offline channels and other reasons. We predict that the market share of TOP10 enterprises will exceed 50% in 2020, and the annual shipment volume of the industry's first leader will exceed 4million sets, and may even exceed 8million sets, cutting off 10% - 20% of the market share

VII. Capital market outlook