The smart home market in China has emerged as one of the most dynamic and rapidly growing sectors within the broader technology and consumer electronics industry. With China’s large and increasingly tech-savvy population, the integration of advanced technologies into everyday home living is transforming how people interact with their homes. Smart homes, characterized by the use of internet-connected devices that offer automation and control of various household functions, are gaining widespread adoption across urban and rural areas alike.

In 2023, the market size for smart home products and services in China was valued at approximately $70 billion, with projections indicating continued growth. By 2028, the market is expected to reach over $150 billion, driven by increased consumer demand, advancements in technology, and the proliferation of Internet of Things (IoT) devices. This growth is supported by both consumer-driven needs for convenience, security, energy efficiency, and comfort, as well as government initiatives to promote smart technology and green buildings.

This report offers an in-depth overview of the smart home market in China, including key drivers of growth, major product categories, leading players in the market, consumer behavior trends, and the future outlook.

Key Drivers of Growth in the Smart Home Market

Government Initiatives and Policy Support

The Chinese government has played a significant role in promoting the development of the smart home market. Policies aimed at fostering the growth of smart cities, IoT infrastructure, and energy-efficient housing have provided strong support to the industry. For example, China’s “Made in China 2025” initiative, which emphasizes high-tech industries, includes smart homes and IoT as key sectors for innovation.

In addition, the Chinese government has introduced several policies to encourage the adoption of smart technologies in both residential and commercial buildings. These include tax incentives, subsidies for energy-efficient appliances, and the promotion of smart grids and digital infrastructure. As a result, the market for smart home products has been buoyed by supportive regulations and investments in digital infrastructure, making it more accessible to the average consumer.

Urbanization and Increased Affluence

The rapid pace of urbanization in China has been a significant driver of the smart home market’s growth. As more Chinese citizens move into urban areas, there is an increased demand for modern housing equipped with advanced technologies that provide convenience, security, and energy efficiency. By 2023, over 60% of China’s population lives in urban areas, a percentage expected to grow further in the coming years.

Additionally, the rising affluence of the Chinese middle class has resulted in higher disposable income, which is driving demand for premium smart home products. Consumers are more willing to invest in products that improve quality of life, such as home automation systems, smart security cameras, and energy-efficient appliances. The younger generation, in particular, is adopting smart technologies at a faster rate, with nearly 70% of smart home consumers under the age of 40.

Advancements in IoT and AI Technologies

The integration of the Internet of Things (IoT) and artificial intelligence (AI) into everyday household devices has enabled the rapid evolution of the smart home market. IoT allows devices to communicate with each other via the internet, enabling automation and remote control of various home functions such as lighting, temperature control, and security. AI further enhances the functionality of these devices, providing features such as voice recognition, predictive behavior, and machine learning.

In 2023, over 60% of smart home devices in China were IoT-enabled, and this percentage is expected to rise as new innovations in connectivity, cloud computing, and AI continue to evolve. AI-powered voice assistants, such as those integrated into smart speakers, have become a crucial part of the smart home experience, allowing users to control devices hands-free and engage with their homes in a more intuitive manner.

Energy Efficiency and Sustainability Concerns

As global awareness of environmental issues increases, there is a growing focus on sustainability and energy efficiency. In China, where environmental concerns such as air pollution and energy consumption are significant, smart home technology is increasingly being viewed as a means to reduce energy usage and promote sustainability.

Smart thermostats, energy-efficient appliances, and smart lighting systems are helping Chinese consumers reduce their energy consumption, lower utility costs, and minimize their carbon footprint. In fact, energy-efficient products accounted for 25% of the total smart home market value in China in 2023. As the government continues to promote green technologies and the need for energy-efficient homes increases, demand for smart energy-saving solutions is expected to grow.

Key Products in the Smart Home Market

Smart Speakers and Voice Assistants

Smart speakers and voice assistants are among the most popular smart home devices in China. These devices, such as XiaoMi’s Mi AI Speaker, Baidu’s DuerOS, and Alibaba’s Tmall Genie, integrate AI and voice recognition to offer a range of functionalities, including playing music, controlling other smart devices, providing weather updates, and setting reminders.

The market for smart speakers in China was valued at $3.5 billion in 2023, and the number of units shipped is expected to grow by 20% annually over the next five years. With the increasing prevalence of AI-powered devices and the growth of digital ecosystems, smart speakers are becoming essential tools for managing connected homes. As of 2023, over 300 million smart speaker devices were in use across China, making the country one of the largest markets for these products globally.

Smart Lighting Systems

Smart lighting is one of the most straightforward and accessible smart home technologies. These systems allow users to control lighting through smartphones, voice commands, or automated schedules. Smart bulbs, LED lights, and color-changing lighting systems have become increasingly popular in Chinese households.

The smart lighting market in China reached a value of $2.1 billion in 2023, with 20% of homes in urban areas reported to have some form of smart lighting. As consumers become more aware of energy efficiency and convenience, the adoption rate of smart lighting is expected to grow significantly. Additionally, as integration with other smart home systems becomes more seamless, smart lighting will likely become a more integral part of the connected home ecosystem.

Smart Security Systems

Home security remains one of the primary concerns for consumers, and smart security devices have become essential in modern homes. Products like smart cameras, motion sensors, doorbell cameras, and smart locks are growing in popularity due to their ability to provide remote monitoring, instant alerts, and enhanced home protection.

The smart security market in China was valued at $5 billion in 2023, accounting for approximately 7% of the total smart home market. Popular brands in the market include Xiaomi, Ring (owned by Amazon), and Hikvision. With increasing awareness of home security, especially in urban areas, demand for smart security systems is expected to rise as consumers seek more control over their homes’ safety.

Smart Climate Control and Energy Management

Smart thermostats and climate control systems allow consumers to manage the temperature in their homes more efficiently. These devices use sensors and algorithms to optimize heating and cooling schedules based on user behavior, resulting in energy savings and greater comfort.

The smart climate control market in China is rapidly expanding, with over 15 million smart thermostats installed by 2023. The rise in demand for energy-efficient solutions, combined with greater awareness of smart home technology, has led to growth in this sector. Smart climate control products are expected to see a compound annual growth rate (CAGR) of 18% through 2028.

Additionally, smart energy management systems that monitor electricity usage and offer tips for improving efficiency are becoming increasingly popular. These systems not only help reduce energy consumption but also provide insights into overall home energy performance, supporting China’s push for sustainability and reducing overall electricity demand.

Smart Appliances

Smart appliances such as refrigerators, washing machines, and ovens are becoming more common in Chinese households. These appliances can be controlled via smartphones and integrated with other smart home devices, providing users with more control over their home’s functionality.

The market for smart appliances in China is estimated to be worth $12 billion in 2023, with continued growth driven by the increasing adoption of IoT technology in everyday household products. As the integration of smart technology improves, appliances are expected to become even more intelligent, with capabilities such as voice control, remote monitoring, and machine learning.

Leading Companies in the Smart Home Market

Xiaomi

Xiaomi is one of China’s largest and most influential technology companies, and it has been a key player in the development of the smart home market. The company’s smart home ecosystem, which includes products like the Mi AI Speaker, Mi Smart Bulb, and Mi Home Hub, has become widely popular due to its affordability, functionality, and ease of integration with other Xiaomi products.

In 2023, Xiaomi’s smart home division contributed significantly to the company’s revenue, which exceeded $10 billion. Xiaomi continues to expand its product offerings and increase its market presence, not only in China but globally. The company’s emphasis on affordable smart home products has helped make these technologies accessible to a broader range of consumers.

Alibaba and Tmall Genie

Alibaba, through its Tmall Genie brand, is another major player in the Chinese smart home market. Tmall Genie is a voice-controlled smart speaker that integrates with Alibaba’s digital ecosystem, allowing users to control other smart home devices, shop online, and access entertainment content. Alibaba has also invested in developing a comprehensive smart home ecosystem, including smart cameras, security systems, and AI-powered appliances.

Alibaba’s smart home business has seen significant growth, with Tmall Genie devices reaching over 50 million units sold by 2023. The company’s focus on integrating smart home devices with its e-commerce platform has been key to its success, offering consumers a seamless shopping and home automation experience.

Baidu

Baidu, the leading Chinese search engine company, has also made significant strides in the smart home market. Baidu’s DuerOS, a voice assistant platform, powers a wide range of smart home products, including speakers, appliances, and security systems. Baidu’s integration of AI and cloud services has allowed it to build a strong presence in the growing smart home market.

In 2023, Baidu’s smart home-related revenues reached approximately $2 billion, with the company continuing to innovate in areas such as voice recognition, AI integration, and machine learning. As of 2023, Baidu had partnered with several leading home appliance manufacturers to create products powered by DuerOS, further expanding its ecosystem.

Consumer Trends and Future Outlook

Growth of the Connected Home Ecosystem

As the adoption of smart home devices continues to rise, the concept of the connected home is gaining traction in China. Consumers are increasingly seeking seamless integration between various devices and systems within their homes, from lighting and security to energy management and entertainment. This trend is likely to continue as the technology behind IoT devices becomes more advanced and as ecosystems like Xiaomi’s, Alibaba’s, and Baidu’s continue to expand.

By 2028, it is estimated that over 50% of Chinese households will have some form of smart home system installed, with the majority of homes adopting integrated systems that connect lighting, appliances, security, and climate control.

Focus on Security and Privacy

As the number of smart home devices grows, so do concerns regarding data security and privacy. Consumers are increasingly aware of the risks associated with internet-connected devices, including hacking, surveillance, and unauthorized data access. As a result, manufacturers are expected to focus on enhancing the security features of their products, incorporating encryption, multi-factor authentication, and advanced AI to detect potential threats.

With more stringent regulations and consumer demand for privacy, the smart home industry in China is likely to see more emphasis on security, data protection, and transparent policies regarding the collection and use of consumer data.

Smart Homes for Sustainability and Green Living

Sustainability remains a central theme in the smart home market. As energy efficiency becomes a more significant concern for Chinese consumers, the demand for energy-saving solutions is set to increase. Smart homes with energy-efficient appliances, solar-powered devices, and advanced climate control systems will play an essential role in the broader push for green living in China.

The Chinese government’s support for sustainability initiatives and the growing focus on reducing carbon footprints will likely drive the adoption of smart home technologies that prioritize eco-friendly living. Energy-efficient products, such as smart thermostats and energy management systems, will continue to dominate the market, aligning with broader environmental goals.