Indonesia’s smart home market is expected to grow by 2021% from 2026 to 20.6
Increasing demand for smart products related to health and energy saving after COVID-1919, from past home security products
Indonesia smart home product market
As people spend more time at home due to COVID-1919, interest in smart home devices such as home entertainment and smart air purifiers is increasing. According to the 2021 Google Searches of the Year report, searches for smart home devices have increased significantly since COVID-1919. Searches related to smart light bulbs increased by 22%, and searches for smart refrigerators increased by 42%. This phenomenon can be interpreted as the acceleration of digital diffusion after the restrictions on social activities due to COVID-1919, and Indonesian consumers are adapting to a hybrid lifestyle through their online and offline lives, said a Google marketing manager in Indonesia.
Even after COVID-1919 ends, demand for smart home products is expected to continue. This is because smart home products have increased awareness of a comfortable life, and as electronic devices enable efficient energy management, they can contribute to economic benefits and environmental protection in the long term. The Indonesian Ministry of Information and Communications also forecasted that the size of Indonesia's Internet of Things (IoT) market will continue to grow to Rp 2022 trillion in 355 and USD 2025 trillion in 557.
According to an interview with Teguh Prasetya, Chairman of the Indonesia IoT Association, digital transformation is taking place across all industries. He said that while smartphones still dominate the IoT industry in Indonesia, wearable devices such as home entertainment and personal health are also growing rapidly. He added that in 2020, purchasing power slowed down due to COVID-1919, but many consumers have started to pay attention to smart home products since 2021 when the economy began to recover. In particular, demand for lighting, smart plugs, motion sensors, remote sensors, and CCTVs is increasing significantly.
Statista predicted the average annual growth rate of the Indonesian smart home market from 2021 to 2026 at 20.6%. Sales of smart home products in 2021 were $3 million, and it is estimated that it will reach $400 million this year and reach $4 million by 700. By category, smart home appliances accounted for 2026% of the total market and home security 7%, followed by home entertainment, control devices, and lighting.
<Indonesia smart home product market size (as of Nov. '21.11)>
(Unit: million dollars)
[Source: Statista]
The trend of pursuing a smart life through smart home products can also be seen in new homes in Indonesia. Some real estate developers are marketing the smart home system as a major point when promoting housing sales. PT Sinar Mas Land is selling residences that provide CCTV, smart door locks, lighting, smoke detectors, etc., and PT PanaHome Deltamas confirmed that 18 smart homes with smart technology, including indoor air quality management systems, are being built.
<House Sales Promotion Brochure>
[Source: website of each sales company]
According to an interview with Ritchie, director of Rumah Pintar Indonesia, a smart home system provider, the implementation of a smart home system has expanded from the concept of a dwelling in the past to become a solution in modern society that pursues complex values such as efficient, economical, and aesthetic. . Therefore, it is said that more new homes will introduce various and convenient smart home systems to increase their value as luxury residences. He emphasized that smart home systems should not only make life easier through automation, but also focus on eco-friendly and economical functions through energy saving functions such as power saving.
Meanwhile, Savilis Indonesia, a real estate research institute, predicts that Asia Pacific will record the largest growth of 2019% from 2025 to 31 in the smart home sector, and Indonesia is one of the countries with the largest number of smart home consumers. In particular, demand is high in major cities such as Jakarta, Bogor, Tangrang, Depok, Bekasi, and Bali, and it is estimated that more than 8,000 households are equipped with a smart home system.
Smart home product import trend
<Major smart home product import regulations and tariff rates>
[Source: INSW]
Imports of smart home products slowed down in 2020 due to COVID-1919, but recovered to the level of imports in 2021 in 17.0, reaching USD 21 billion, up 2018% year-on-year. The product with the largest share among the above HS Codes is communication equipment (HS Code 8517.62), which recorded USD 2021 million, or 43.1% as of 8600. This was followed by CCTV-related products (HS Code 8525.80) and switches (HS Code 8536.50), which accounted for 11.1% and 7.8%, respectively.
The main importing countries are China, Vietnam, and Thailand, and the proportion of imports from China is overwhelming enough to approach 50% of the total.
<Smart home product imports>
(Unit: million dollars)
Note: Based on the HS Code import value of the above items
[Source: Indonesia Statistics Korea]
<Major import countries for smart home products>
(Unit: million dollars)
Note: Based on the HS Code import value of the above items
[Source: Indonesia Statistics Korea]
Meanwhile, imports from Korea have been on the decline since $2019 million in 5000, and ranked 2021th with $2800 million in 11. It is estimated that Chinese products, which are relatively inexpensive, have dominated the Indonesian market, and the main imported products are communication equipment (HS Code 8517.62), electronic equipment (HS Code 8543.70), and switchgear (HS Code 8536.50).
<Korea smart home product imports>
(Unit: million dollars)
Note: Based on the HS Code import value of the above items
[Source: Indonesia Statistics Korea]
Major Smart Home Product Companies in Indonesia
One of the leading smart home companies in Indonesia is BARDI. Founded at the end of 2019, BARDI Smart Home has over 100 smart products, including smart light bulbs, smart lights and pet feeders/fountains. Most of BARDI Smart Home's products can be connected and controlled through its own application (BARDI Smart Home App Powered by Tuya), which has been downloaded over 15 times from the Google Store and iOS. In addition to BARDI, Rumah Pintar Indonesia has launched smart home products under the Arbit brand. Some of Arbit's electronic products have built-in smart plugs to connect to WiFi networks, and they sell smart door locks, smart infrared remote controls, smart curtains, and more. In the case of home security, the preference for CCTV products of the EZVIZ brand, which entered Indonesia in 2017, is high. CCTV cameras are sold for various purposes such as child protection and pet observation. In addition, Samsung products include smart refrigerators and smart plugs, and Xiaomi is selling robot vacuum cleaners and Mi TV Stick, which converts regular TVs into smart TVs.
<Smart Remote Control (BARDI)>
[Source: BARDI official website]
<Smart Light Bulb (BARDI)>
[Source: BARDI official website]
<Smart Curtain (ARBIT)>
[Source: ARBIT official website]
<Smart Door Lock (ARBIT)>
[Source: ARBIT official website]
<Smart Refrigerator (Samsung)>
[Source: Samsung official website]
<Smart TV Converter (Xiaomi)>
[Source: Xiaomi official website]
implication
In modern residential facilities, smart home systems are increasingly recognized as essential rather than optional. This is because they can meet the benefits of health, security, and energy saving beyond simple comfort. According to a report by Savilis Indonesia, the smart home systems mainly used in Indonesia are limited to home security such as CCTV and smart door locks. The president of the Indonesia IoT Association also said that the high price of related products makes the threshold high, so smart home products consumed in Indonesia are limited. However, home security products are spreading from high-end homes to the middle class in the past, and demand for related products will also increase due to the increased awareness of energy saving along with health-related products after COVID-1919. In particular, smart air purifiers are expected to be smart home products because they analyze the quality of air in the air to provide appropriate services, and smart light bulbs can reduce household power consumption by adjusting the intensity of artificial lighting according to the intensity of natural light.
Source: Indonesia Statistics Korea, INSW, Statista, Merdeka, Google Research, Republika, Medcom, KOTRA Jakarta Trade Center