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| Residential sector will be the key driver of overall electronic lock category growth |
Rita Liu, analyst for Security and Building Technologies at IHS Inc., in her research note discusses about the Chinese market opportunity for electronic locks.
China’s electronic lock market is forecast to grow quite fast at a compound annual growth rate (CAGR) of 13 percent, from 2015 through 2019. The residential sector will be the key driver of overall category growth, with a CAGR of 17 percent, during the same time period, according to the IHS Access Control Market Intelligence Service.
Growth in residential electronic lock market
To control fast rising home prices in China, at least five sets of national-level real-estate market regulations were released in 2010. As a result, new construction activity has slowed. Even so, the electronic lock market within the residential sector continued to grow quite quickly, for the following reasons:
- China’s current penetration in residential locks is quite low, so there is a lot of potential for growth. Currently residential locks have been adopted by real estate developers for installation in high-end apartment projects in tier one and a few tier two cities.
- Real estate developers prefer to add more selling points, especially when the market is not as strong.
- High profits for electronic locks attract more suppliers from upstream and downstream in the industry supply chain, leading to more severe pricing competition. The average selling price for biometric locks and smart-card locks were estimated to decline by over 10 percent in 2014, making electronic locks more affordable to end users.
- Sales channels are expanding. Currently, real estate developers are the key channel for door locks in China, holding a share over 95 percent. Some manufacturers have started to reach end users directly via e-commerce websites.
- Brands have less influence on end users, so no matter how big the supplier is, they do not like to invest in market education, because there are no direct benefits to them for doing so.
Generally the electronic lock market in the residential sector is still in its early stages. The market is expected to grow over the next five years, with more players entering the market and more focus on the demand for residential locks in China.
