Home automation in India is a rapidly growing market used across residential, commercial, and hospitality segments. It consists of four main functional segments: lighting, security, audio/video, and HVAC. The residential segment accounts for about 60% of the market and is growing at a CAGR of 35-40%. Lighting and security products together make up 80-85% of the home automation market. While the market is fragmented, it is expected to continue growing significantly in the coming years as technologies advance and more innovative solutions become available.
3. 1
Technology is a critical factor in the way we function
today; disruption through technology has bought forth
some of the most efficient solutions in many aspects
of life today. From smart phones, internet banking, e-
commerce, to new age innovations such as wearable
technology and smart homes, technological
innovation is impacting our lives like it has never
before; stitching together people, systems and
solutions seamlessly.
Home automation could have well been a part of
science fiction many decades ago, but is a reality
today. Home automation has its roots in smart home
appliances which has over the years led to the
development of integrated smart homes. Home
automation today largely consists of four functional
segments – Lighting, Security, Audio/Video and HVAC
(Heating, Ventilating and Air Conditioning).
Residential usage is the highest in the market and
accounts for nearly 60% of the home automation
industry.
Functional segments in home automation
The home automation market in India is expected to
reach INR 8800 crores by 2017. The key growth
drivers for this demand are increasing consumer
awareness and financial ability, product innovations
(like smart phone apps), builders’ requirement for
market differentiation and an increase in the
preference for energy efficient systems. However the
market is still in its growth phase with a significant
gap for more innovative and connected systems.
Some of the key constraints include high product
costs and moderate levels of satisfaction among the
customers.
Home automation market growth in India
1. Functional Segments
Home automation can be delivered either through
wired or wireless systems. Wired systems are typically
used when the automation is done at the time of
construction, making installation easier. Wireless
technology largely relies on existing wired structures at
home, such as phone lines and power lines. Wireless
technology is however less invasive and more
convenient and given the proliferation of smart
phones and smart home appliances, are fast gaining
popularity.
The four functional segments of home automation in
India include Lighting, Security, Audio/Video and
HVAC (Heating, Ventilating and Air Conditioning).
Major driving forces for installing smart home systems
are convenience, energy conservation and security.
Smart home systems today, help control anything
from climate/temperature, security cameras, locks,
sensors and entertainment systems among others. A
detailed segment wise breakdown of the systems are
given below:
4. 2
2. Market Analysis
a) Customer segment analysis
The residential segment accounts for nearly 60% of
India’s home automation industry (out of which
individual homes and villas account for 75-80% of
market and builders account for ~20% of market).
This segment has the highest growth and is currently
growing at a CAGR of 35-40%. The market for
residential home automation is highly fragmented,
especially in home security systems.
Commercial spaces contribute to 30% of the home
automation market. This segment is largely driven by
security and access systems. Large companies like
Samsung, Bosch and Honeywell dominate this
segment in India. Efficient building management
systems are fast gaining popularity in India as well.
The hospitality industry also uses home automation
and accounts for 10% of the market. Security and
lighting systems are popular in this sector due to the
growing need for differentiation.
b) Product segment analysis
Lighting and security are the top selling products in
home automation, accounting for nearly 80-85% of
the market.
The lighting market is largely driven by the residential
segment. In India, the industry is still dominated by
remote control solutions as mobile apps and other
advanced solutions are costlier. Lutron, Philips and
Legrand dominate the lighting market in India.
Security systems are also becoming very popular in
India and are used by both the residential and
commercial segments. CCTVs’ accounts for about
25% of the security systems. The market for security
systems is however highly fragmented between local,
Chinese and other international players.
HVAC and Audio/Video systems account for about
15-20% of the market and is typically provided in
hotels and commercial complexes; residential
applications are still low. HVAC is largely done in
complexes with centralized air-conditioning.
A market split by product and customer segments can
be seen in the chart below:
Segment wise items and control setups
5. 3
It can be seen from the chart that lighting is the
largest component of the residential market while
security is the largest component of the commercial
market.
Overall, the market is highly fragmented, largely due
to the low entry barriers. Availability of open source
technologies makes it easy to enter the market.
Innovation is the driving force of the industry and the
market is evolving fast both in terms of technology
and features (mobile apps etc.). In India, the home
automation market is expected to grow significantly
over the next few years and will witness growth both in
terms of number of players and technologies offered.Market split by customer and functional segments
6. 4
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Authors
Research & Analysis
Niteesh Verma
(Associate Consultant)
Associate Consultant
Pavithra Babu
(Consultant - Content & Thought Leadership)
