The global smart climate control market was valued at USD 3.109 billion in 2019, and it is expected to reach USD 8.262 billion by 2025, registering a CAGR of 19.21%, during 2019-2025
NEW YORK, Nov. 3, 2020 /PRNewswire/ -- The global smart climate control market was valued at USD 3.109 billion in 2019, and it is expected to reach USD 8.262 billion by 2025, registering a CAGR of 19.21%, during 2019-2025. In recent years, the consumer propensity toward adopting energy-efficient solutions, safety equipment, and building healthy homes has increased significantly across the world.
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- According to a study by the Joint Center for Housing Studies on healthy remodelling, in 2018, 30% of all the US households expressed concern about some aspect of their homes endangering their health, which was a 3% increase from 2014.
- Owing to such developments, homeowners are increasingly leaning toward adopting health and safety equipment as part of their homes, and air purifiers, thermostats, and smart sensors are increasingly becoming the focus. The demand for these equipment is expected to be particularly high in North America and Europe, owing to the higher penetration of smart homes.
- The demand for smart and connected air purifiers has gained traction in recent years. There is demand for such devices where the amount of air filtered and other stats visible on the smartphones enable users to have more control and offer alerts when the filters are to be changed.
- The growing propensity toward smart and safe homes is also augmenting the demand for safety sensors, such as fire and air pollution. Lack of safety sensors in the residential sector leads to safety hazards and fire accidents. According to a study by the National Fire Protection Association (NFPA), nearly 60% of the recent home fire deaths that happened in homes had no working smoke alarms in the United States.
- The demand for smart thermostat is currently driven from North America and Europe. According to the American Council for an Energy-Efficient Environment (ACEEE), the market for smart thermostats is experiencing significant growth, with projections that, by 2021, more than 43 million US homes, or 40% of the total, will have a smart thermostat installed. Such developments are expected to further augment the demand for smart thermostats over the coming years.
Key Market Trends
Growing Household Spending
- With the growing consumer spending ability across developed and developing nations, a prominent share of the spending is directed at consumer goods and home appliances. According to the National Association of Home Builders, during the first two years after closing on the house, a typical buyer of a newly built single-family detached home tends to spend on an average USD 4,500 more than a similar non-moving home owner. Likewise, a buyer of an existing single-family detached home tends to spend over USD 4,000 more than a similar non-moving home owner, including close to USD 3,700 during the first year.
- According to the Bureau of Labor Statistics, the average US household expenses amounted to USD 61,224 in 2018 per consumer unit with one consumer unit representing a household with shared expenses. Compared to the previous year, the spending increased by 1.9% on average; such growth in expenditure is expected to be driven by the technology spending of each households.
- In countries such as China and India, the household spending in terms of enhancing living conditions is increasing. According to the World Bank data, in 2018, household final consumption expenditures in China, Japan, India, and Australia, were at the top with USD 5,263.18 billion, USD 2,763.34 billion, USD 1,614.64 billion, and USD 808.92 billion, respectively.
- A prominent share of the household expenditure growth is expected to be driven by the spending over household appliances and electronic goods for improving standard of living. Such developments are expected to positively influence the demand for air purifiers, thermostats, and other safety equipment.
Asia-Pacific to Witness the Highest Growth
- In September 2020, China pledged to stop releasing carbon emissions before 2060 in a surprise move that catapults it ahead of US ambitions on climate change. China aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. The country's successful policies to improve air quality have helped local manufacturers to expand their domestic scope. In Beijing, through a systematic approach based on the adoption of smart technologies, the concentration of fine particulate matter (PM2.5) in the air has fallen by 35% between 2013-2017. The adoption of climate control technologies has also played a significant role in this.
- According to the IQAir, Chinese cities achieved a 9% average decrease in PM2.5 levels in 2019, after a 12% decrease in 2018. However, 98% of towns exceeded WHO guidelines, and 53% of cities exceed China's less stringent national targets. In Beijing, frequent smog has seriously affected people's living environment and physical health. According to the World Health Organization, following Delhi, Mumbai, and Dakar, Beijing is currently ranked fourth on the list of cities with the world's worst air quality.
- Japan is also one of the significant investors and adopters of the climate control market. The country's growing concern for air pollution and climate change encourages many consumers to adopt energy-efficient technologies. The Japanese government has also collaborated with the Climate and Clean Air Coalition for tackling air pollution and climate change crisis. In recent years, the country has also promoted the use of a smart thermostat and air monitoring devices. Japanese companies already have cooling technologies with extraordinary energy-saving capacity.
- Due to the recent COVID-19 outbreak, many local vendors have reported a surge in domestic demand. Hence, these companies are further investing in technological advancement. For instance, Sharp Corp has claimed to have developed an air purifying technology, Plasmacluster technology, that can reduce airborne novel coronavirus particles by about 90%. In July 2020, Panasonic Corp. and Daikin Industries Ltd also reported that their air purification technologies could inhibit the virus when attached to a surface.
Competitive Landscape
The market for smart climate control is concentrated with major giants, such as Daikin Industries Ltd, Honeywell Internation Inc., Unilever PLC, and Dyson Ltd, providing range of climate control solutions globally.The market poses high entry barrier in terms of both capital expenditure and government regulations. New entrants are required to invest in setting up of manufacturing facilities, along with technological advancements to keep track of the changes to remain relevant in the market.
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