Several leading smart lock startups will have IPO plans in the past two years. But are the mainstream capital markets really bullish?
Editor’s note: This article is from the public micro-channel number, “Lu Jiu Finance” (ID: liujiucaijing69), Author: Guode Fan.
Before the Ching Ming Festival, the smart lock industry, which has not heard for a long time, ushered in a new financing.
Kadis received a Series B financing led by Orchid Asia Investment Group, with a financing amount of nearly US$100 million. However, Kadiz was previously involved in Guangdong Dinggu Ji Chuang Home Furnishing Co., Ltd. and initiated it in 2019 Scandal of an acquisition transaction.
But behind the financing, it is difficult to conceal the current embarrassing situation of smart locks. This is a low-frequency consumer industry. After the war of thousands of locks, financing has become more and more difficult, and no one can tell a new story.
With the gradual decline of the real estate industry and the low-frequency consumption attributes of the electronic lock industry, after a period of capital spree between 2015 and 2018, smart locks have become more and more difficult to finance, and their own development speed has also been greatly restricted. Many smart lock start-ups have encountered the same problem. The technical threshold is low, and there are many competitors. After users replace a door lock, they may not continue to consume for more than ten years. After the slowdown in real estate, the consumption of new houses decreases. In a market that is originally small and has no growth rate, life is difficult for everyone.
According to reliable sources, several smart lock start-ups will have IPO plans in the past two years, impacting revenue. Telling a new story will be an important matter in the second half of the smart lock. However, this is another typical “slow consumer” industry, low-frequency consumption, and at the same time not in the core consumption position of intelligent hardware of the Internet of things, so that capital has always been cautious about the smart lock industry.
In the view of Lu Jiu Finance, the second half of the smart lock’s victory or defeat is mainly in several dimensions, how to expand the SKU and get out of the small track of pure door locks; how to have an absolute market in an IoT ecosystem with absolute advantages Share; diversified channels, selling their products on a global scale.
The lock is the appearance, and the IoT ecosystem is the core
Why is Lu Jiu Finance not optimistic about the smart lock industry? Because companies such as Caddys do not have any smart ecology themselves, they have a small share in the current ecosystems such as Huawei. Huawei’s current IoT is still in a very early stage of development.
If it is a simple fingerprint unlocking, this lock cannot be called a smart lock, at best it is a fingerprint lock. Behind the word smart is that this door lock can be linked with other IoT products in the house.
For example, the door lock can be managed remotely. When you go home at night, you can turn on the door lock to turn on the lights in the house. When you leave the house, you can automatically turn off the home appliances. All this requires a complete IoT ecosystem. Xiaomi smart lock and its ecological chainThe company’s Luke can take advantage of success in a short period of time, basically using its own IoT ecological advantages.
However, IoT is currently popular in first- and second-tier cities. However, in the sinking market, most users have insufficient awareness of IoT. In the eyes of most people, smart locks may be locks that can be opened with fingerprints. In most of the third- and fourth-tier areas, the market share of smart locks that can truly be connected to the Internet is not high.
On the whole, the technical content of fingerprint locks is very low. The solutions have been mature ten years ago. Most lock factories do just assembling, so the so-called “thousand locks war” began in 2015. But as the market became saturated, many start-ups died in the capital winter.
Because, the trend of this industry in the sinking market is that there is only a lower price and no lowest price. Pinduoduo can buy a fingerprint lock for 250 yuan, and the well-known brand Luke has also put online The price of smart locks has fallen within a thousand yuan.
However, in the long run, the entire industry will still follow the general trend of IoT. The low-cost fingerprint locks installed in the sinking market today will be replaced again in the next few years with the popularity of IoT.
Since the hardware itself does not have much room for breakthroughs, the future competition of smart locks will definitely focus on software and ecology. Then the Xiaomi system, which has the world’s largest IoT ecosystem, will have absolute words in this field. right.
Li Jipei, the managing partner of Lanxin Asia, explained the logic of his investment in Cadiz as follows: “The experience of in-home smart door locks is a subversive alternative to traditional door locks. As the main area of smart home consumption upgrades, Compared with mature foreign markets, the domestic penetration rate still has a lot of room for improvement. Kaidis is the only smart door lock company in China that has integrated product definition, independent research and development, manufacturing, omni-channel sales and brand operation industry chain.”
However, Lu Jiu Finance believes that for a smart lock company without IoT ecological protection, the word “smart” must be greatly discounted. Many so-called smart locks also need to perform operations such as fingerprint entry on the lock body. There is no ecological smart lock company. In the past and the present, you may be able to live, but it will definitely not represent the future. In the era of the Internet of Everything, the attractiveness of the hardware itself will become weaker and weaker. A mature IoT solution will ultimately determine the consumer’s willingness to buy. The ultimate factor.
Companies such as Kadisse do not have a comparative advantage in technology. After raising a large sum of money, increasing investment in sinking channels, inviting image spokespersons, and advertising, seems to be an unavoidable upward path. However, this routine, traditional small home appliance manufacturers will be, this is still a “sell goods” path. To complete the layout of the IoT is almost an impossible task.
How to convert from low frequency to high frequency
When Lu Jiu Finance communicates with many smart lock companies such as Xiaomi, Luke, and Deschman, the other parties have a common worry. With the decline of real estate in the past two years, the market’s demand for locks is increasing. Far from keeping up with the capital’s demand for enterprise growth, a lock may not be replaced for more than ten years after installation, and the damage of the lock is relatively small, and the probability of after-sales is low.
Then, the most profitable and benign business in the world will always be the business of printer manufacturers: the profit of replacing consumables is often much higher than that of printers that are sold only once. Everyone wants to have a high-frequency business, but door locks are precisely a low-frequency consumer demand, especially smart locks.
For traditional mechanical locks, if it is a rental house, the new tenant may also change the lock cylinder. If it is a smart lock, change the password or fingerprint, and the cost of changing the lock cylinder will be eliminated.
So how to transform from a low frequency to a high frequency business is a question that the entire industry needs to think about.
After communicating with many practitioners in the traditional lock industry, Lu Jiu Finance found that the traditional lock industry actually has a lot of experience to learn from. The most important experience is to expand SKUs and miniaturize products to meet the needs of more scenarios. .
Concentration is a quality that should be adhered to for all startups, but sometimes if you fail to understand the meaning of these two words correctly, it will seriously delay the development of the company.
A startup company, after breaking through a small niche market, should expand its market scope as soon as possible, otherwise it will fall into a development bottleneck.
What is a lock? It is a confirmation device that can ensure that one space cannot communicate with another space at will, so why must this device be on the door? In the era of traditional locks, the classic three-ring locks have maintained their dominance for many years because they can be used in any scene in various sizes.
So, the current smart lock companies should expand their SKUs as soon as possible. Door locks are low-frequency consumption, but it does not mean that this industry is low-frequency consumption. Smart locks can transform door locks, as well as traditional locks, so they can be miniaturized. Smart locks to meet more usage scenarios is a core that everyone needs to solve.
For example, in an office, many employees have a cabinet each, and HR manages the keys of these cabinets. It is a headache. If these cabinets are smart locks with fingerprints, it will save a lot of trouble when resigning and joining; other scenes in the office For example, filing cabinets and some drawer transformations will require a variety of locks. This demand will arise with the closure and opening of a company, so the office is inherently a scene with a higher frequency than the family; in addition, The safe is also a natural product.
There are many similar scenes, schools, hospitals, gyms, venues, etc. Who said that fingerprint locks cannot be used on bicycles or battery cars?
Enterprises with smart locks shouldIt has been positioned as a lock company, not a door lock company. The logic of this block is similar to the first paragraph. It needs to be networked and intelligent. If it is a simple fingerprint entry, it is still not big data management, and it is not suitable for later management.
The channels of the lock industry should be streamlined
Data from the National Lock Industry Information Center shows that the proportion of the four major channels of domestic smart door locks in 2018 is: real estate 37%, retail 31%, and door distribution 26% , Security 6%.
In terms of sales format, offline flagship stores, building materials market, and online ranked the top three, accounting for 35%, 25%, and 17% respectively. Among them, real estate is mainly sold through real estate development projects; retail includes offline agency and distributor channels, as well as online e-commerce channels such as Tmall, JD, and Xiaomi Youpin; door accessories are sold in conjunction with door factories; security rules It is sold through security integration engineering.
After financing, Kaidis said it plans to invest 50 million yuan in funds to support agents to enter the mall channels. This includes providing six months of rent subsidies for agents who expand shopping mall channels.
However, Lu Jiu Finance believes that it does not make much sense to self-operate too many offline stores for such a single-form and low-frequency consumer product as a door lock.
In industries that require a large number of stores, the first element is high-frequency consumption. Mobile phones and computers that are changed every two years or so, and electronic cigarettes are bought every month. These are all products suitable for opening a store, but for ten years What’s the point of opening a large number of stores after buying a door lock once? Even for products such as sweeping robots and vacuum cleaners with some consumables, there are no large-scale stores.
For products with a single SKU and low frequency, we should cherish the cash flow in our hands and spend the money on research and development, product experience, and optimizing sales channels.
Because the proportion of security is small, it can be temporarily ignored; door distribution because of the low technical content of smart locks at present, most of the door companies have also begun to make their own locks, and this market will become more and more unfriendly; The real estate market accounts for the largest proportion, especially the hardcover houses will be locked. Although the development speed of real estate is getting slower and slower, this market should not be underestimated. In the future, the competition in the To B market will still play a big role in the IoT ecosystem. In recent years, young people are increasingly paying attention to the intelligence of the whole house when buying houses. Door locks are also an important part. Therefore, door locks without IoT ecology will be greatly affected, and real estate developers will directly not consider purchasing.
In addition to the above three links, the proportion of retail is left. The offline flagship store, building materials market, and online are the main three channels. From this point of view, the investment in offline flagship stores and building materials market Ratio is not good. Lu Jiu Finance visited a number of stores selling locks in malls, although they can sellGo out to lock up, but after abandoning labor and rent, the profit is not much; the online dilemma is also obvious, many older users will not buy this type of product online, because it involves subsequent installation and other issues.
Then, the channel problem behind the smart lock is very clear. The cost of self-built channels for a single product is too high. Follow other channels and streamline your own channels is a steady and steady way. Price butchers like Xiaomi enter the market and let Prices in this industry are becoming more and more transparent.
In addition, globalization is also an issue that Chinese smart lock companies need to think deeply about. The decline of the domestic real estate market does not mean that the markets of other developing countries will shrink, so going overseas is also a way for smart lock companies to choose. Stone Technology The sweeping robot went out to sea very successfully.
Yunding Technology has deployed international business since the end of 19, the international brand LOCKIN, currently covers the United States, Canada, Japan, Singapore, Malaysia, Vietnam and other regions.
Lu Jiu commented: Locks are actually a good track
Data is always the core secret of a company. Even for investors, it is still half-hidden.
There is no smart lock company that has announced its actual revenue.
Xiaomi is the king of this industry, because his brand is too strong.
And how does the independent smart lock industry survive and develop? The conclusion is clear.
When all the owners of smart lock startups are worried about the low frequency word, they often ignore the fact that locks are a very, very demanding stable and profitable industry, and it already exists. Thousands of years.
No matter how the technology develops, people need locks and locks for their own safety, so as long as the cost optimization and good product experience are maintained, the smart lock company will not die. This is at least a real demand industry. It will become a short-lived existence like shared bicycles.
Today, no one has turned the lock into a cultural symbol, whether it is Xiaomi, Yunding Technology, Deschman, or Kadish. In the old traditional lock era, Sanhuan lock used its unique shape and the advantages of channels. All over the country, but today’s smart locks do not have a memorable mark.
How to make your brand become synonymous with locks in the new era. Whoever achieves this will occupy the future.
So, if you want to do this, just making a door lock is definitely not enough. This company must have its own product layout in every scene where a lock is needed.
Maybe one day, there will be a smart lock company that will launch its own door locks, bicycle locks, file cabinet locks, window locks and even locks between lovers.