Consumption upgrade brings opportunities as smart products gain popularity

China's ongoing consumption upgrade is presenting opportunities for the bathroom and kitchen products sector, with smart technology taking center stage.

"Smart bathroom products are entering into a fast-growth period in China, and Chinese consumers are increasingly enthusiastic about intelligent technologies, whether it's the toilet, shower, shower head, or bathroom mirror," said Xu Shuo, a researcher from Shenzhen, Guangdong province-based Qianzhan Industry Research Institute.

Bathroom product sales snowballed nationwide from $1.03 billion in 2003 to $4.54 billion in 2017, with a compound growth rate of 10.4 percent, data from Qianzhan showed.

Consumers born in the 1980s and 1990s prefer innovative products to traditional ones, because they are more environmentally friendly, intelligent and personalized. Their changed preferences are leading product designers to focus more on quality, intelligence and innovation.

"Amid the Chinese consumption upgrade and smart home trend, the outlook for smart bathroom products in China is great," said Xu.

China has become the largest bathroom products maker, exporter and consumer globally. Today, there are more than 20,000 bathroom product producers across the nation, and fierce market competition is bringing about fast updates to innovative product lines and improved product quality.

American Standard, a global bathroom and kitchen products brand, has been increasing its intelligent product proportion in China over the years, ever since their first smart bathroom product was launched in the market about a decade ago.

"We have seen the bright future for smart products. In the past few years, we have already introduced quite a few intelligent products, and we are planning for one-third of our ceramic products to use smart tech from this year onward," said Kang Jian, general manager of American Standard China.

Since entering the Chinese market 30 years ago, American Standard has maintained a high growth rate, even during sluggish periods.

"American Standard has achieved double-digit sales in the past four years... We are going to grow at double-digit rates in the future, with more advanced technologies and products to be introduced to the China market," Kang said.

China is currently the second-largest market for American Standard, and is on track to become its largest market.

According to Kang, the company has made the Chinese market a priority in their development plan, because local consumers focus more on quality, service and technology as a result of the ongoing consumption upgrade.

"China's economy as a whole presents great opportunities, including its continued urbanization, which opens many areas for expansion," said Kang.

American Standard is seeking to team up with leading Chinese real estate developers, including Evergrande, Country Garden and Vanke, to further tap Chinese market in the second quarter of this year.

Compared to developed markets, China's integrated bathroom products sector remains segmented, which means local consumers may have great demand for an efficient and environmentally friendly solution for renovating their bathrooms, Kang added.

Despite a drop in 2016, China's overall bathroom products market has maintained rapid growth since 2010, and in 2017, the market grew 15 percent over the previous year, according to Xu at Qianzhan.