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Based on the import and export trends in China’s hardware and smart lock industries in 2024, as well as domestic market performance, the industry will face the following opportunities and challenges in 2025:

I. 2024 Industry Overview

1. Import and Export Situation

· Exports: In 2024, the export value of hardware and intelligent locks increased by approximately 8-10% year-on-year, with major markets being Southeast Asia, the Middle East, and Africa. Growth in the European and American markets slowed due to trade barriers (e.g., anti-dumping investigations, technical certifications).

· Intelligent locks performed exceptionally well, accounting for over 35% of total lock exports. There has been an increased demand for biometric and IoT locks in Europe and the U.S.

· Imports: High-end hardware materials (such as high-strength alloys) and smart lock chips are still reliant on imports. The import value grew by 5% in 2024, but some companies are turning to domestic alternatives due to fluctuations in the international supply chain.

2. Domestic Market Situation

· Demand Side: Renovation of existing homes (accounting for over 60%) and the transformation of smart communities have driven the smart lock penetration rate up to 25% (2024 data).

· Price Wars: The prices of low-end smart locks have dropped by 10-15%, but high-end brands (such as Kaadas, Dessmann) continue to grow through technological premiums.

· Policy Side:

1. The national push for "old renovation" and "smart city" construction has increased government procurement orders for smart locks.

2. Industry standards have become stricter, with the release of the "Smart Lock Safety Technical Specifications" in 2024, leading to the elimination of some small and medium-sized manufacturers.

II. Market Opportunities in 2025

1. Integration of Smart Home Ecosystem

As the gateway to the home, smart locks deeply integrate with smart home systems (such as Huawei HarmonyOS and Xiaomi ecosystems), becoming the core node of a fully connected smart home.
Opportunity: Collaborating with IoT platforms to develop features like "hands-free unlocking" and "scene linking" to increase user engagement.

2. Continued Policy Benefits

The "14th Five-Year Plan" old renovation projects have reached their peak, with over 50,000 new communities expected to be renovated by 2025, driving demand for hardware and smart locks.
Rural revitalization policies are increasing the penetration of smart locks in rural areas (currently less than 10%).

3. Technological Breakthroughs and Domestic Substitution

Domestic chips (e.g., HiSilicon, Zhaoyi Innovation) have improved in performance, reducing dependence on imports and lowering costs by 20-30%.
Advances in biometric technologies (such as vein recognition and palm prints) and AI algorithm optimization enhance product differentiation and competitiveness.

4. Diversification of Export Markets

Emerging markets (Southeast Asia, the Middle East) have strong infrastructure demand, presenting significant potential for high-cost-performance hardware exports.
Demand for smart locks with green certifications (e.g., EU CE, UL in the U.S.) is growing in Europe and the U.S., with leading companies able to capture market share through compliance.

III. Key Challenges in 2025

1. Uncertainty in International Trade Environment

· The escalation of technical barriers in the European and American markets (e.g., GDPR data privacy requirements) has increased compliance costs for exports.

· Geopolitical risks (e.g., chip supply chain disruptions) may impact the production of high-end products.

2. Intensifying Domestic Market Competition

· Excess capacity in low-end products and ongoing price wars have compressed profit margins for small and medium-sized enterprises to below 5%.

· Consumer concerns about the security of smart locks (e.g., hacking risks) are affecting trust in high-end markets.

3. Technological Dependence and R&D Pressure

· Core algorithms and chips are still partially reliant on imports, and domestic substitutes need time to prove their reliability.

· R&D investment needs to increase to 8-10% (the industry average in 2024 is about 5%), putting pressure on small and medium-sized enterprises.

4. Data Security and Privacy Risks

· As smart locks become more interconnected, data breaches could lead to tighter regulations (e.g., penalties under the Personal Information Protection Law).

· Companies need to invest more resources in building security defense systems, increasing operational costs.

IV. Conclusion and Recommendations

Opportunities Outweigh Challenges:
Policy support, technological upgrades, and export diversification are the main drivers of growth.

Key to Business Breakthroughs:

· Technology: Accelerate domestic substitution and strengthen the R&D of biometric and AI algorithms.

· Market: Focus on rural and emerging overseas markets while mitigating trade risks in Europe and the U.S.

· Security: Establish end-to-end data security protection and enhance brand credibility through international certifications.