Latent growth opportunities for Make in India for IoT companies

IoT Home appliances or Smart Home appliances has witnessed massive growth and adoption globally in the last 18 months. Even in India, we are witnessing a tremendous increase in consumers onboarding the Smart Home revolution. In the US alone, over 32% homes have penetration of IoT home products and in India, currently, we have an overall penetration of just over 3%.

Talking specifically about India, there are enough anecdotes to indicate that the Smart Home and IoT Home appliances market is expanding swiftly:

1. Several brands have already launched IoT and Smart home products in the last one year and multiple categories such as Lighting, Air Conditioners, Air Purifiers, WiFi Cameras etc have been picking up w.r.t meaningful IoT use cases.
2. Google Home and Alexa have been amalgamating the IoT ecosystems by focusing on IoT products that can be controlled via Voice Assistants.
3. There is increased demand among consumers for App and Voice Assistant operated Smart home appliances.

With the increased demand and adoption in the market and sensing that Smart Home appliances are the future of consumer durables and electronics, brands are now creating a long term roadmap for IoT in their respective categories. A few vital considerations in the roadmap are:

Localization of IoT technology stack
In order to make any appliance Smart or IoT enabled and to add smart controls to the appliance, from the hardware perspective, a connectivity module (say a WiFi module or Bluetooth module) is required to be integrated with each appliance.

In the case of IoT for domestic appliances use cases, WiFi has emerged as a clear winner for connectivity leaving Bluetooth Low Energy (BLE), Zigbee, and Z-Wave far behind. Thanks to seamless integration with voice assistants and mobile apps without need of a gateway device.

With the increase in demand for Smart home appliances, there is an inherent increase in demand for WiFi modules. Currently, almost 100% of WiFi modules are being imported and given the focus on localization, there are enough opportunities for #MakeInIndia companies to develop and manufacture WiFi modules in India.

Data localization
Other essential elements to add IoT capabilities to domestic appliances are IoT Cloud Platform and Mobile Apps. IoT Cloud platform is the core that manages transfer of control commands given by users from mobile apps and voice assistants to their respective smart appliances.  It is important that IoT Cloud platform is hosted within  India, as it has an impact on latency of the service if hosted from locations outside India.

Additionally, from a Data localization perspective, it is paramount that all the activity data and Personally Identifiable Information (PII) are stored in data centers in India.

With a lot of Chinese IoT suppliers, the whereabouts of storage of these critical information is dubious and in some cases have been traced down to servers and data centers in China.

In context of data localization requirements,  #MakeInIndia IoT Cloud platforms are essential and paves way for India-based companies to fill the gap and offer IoT cloud platforms that are scalable, trustable, secure, and above all compliant with data localization requirements as per Indian law.

Focus on Return on Investment (RoI)
Focus on RoI is always an essential aspect of any prudent roadmap. With IoT in consumer appliances, it is easy to visualize a feature rich product, but, without having crystal clear vision of the RoI, it fails in the long term. Integration with after sales service and AI based predictive maintenance are some key points that ensure RoI with IoT in the long term.

As an example, apps need to have a smart built-in feature, that gives the users notifications every time the service of a certain appliance is due and also allows them to book the service at the click of a button, leading to recurring business for the brands. Such intelligent features ensure guaranteed RoI and sustainable value.

Developing AI models specific to appliances that operate in Indian households are important to correctly predict service requirements and spare part replacement needs. As an example, water purifiers, air purifiers, inverters require frequent services and changes to water filters, air filters and batteries respectively. AI models for predicting change of spare part are dependent on tuning the AI models as per Indian conditions and usage patterns, thus, building a need for #MakeInIndia IoT and AI companies to come in.

Authored by Arpit Chhabra, Co-Founder & CEO, IoTfy