Date
26 July 2017
Despite the hype surrounding smart appliances, SMEs hesitate to invest in the new technology due to doubts over product life-cycle and cost-efficiency. Photo: Internet
Despite the hype surrounding smart appliances, SMEs hesitate to invest in the new technology due to doubts over product life-cycle and cost-efficiency. Photo: Internet

SMEs caught in smart appliance dilemma

Household appliance makers realize their future depends on “smart” products that will appeal to the tech-savvy consumers.

In line with this emerging reality, quite a few major brands have already launched a new generation of refrigerators, washing machines and air conditioners — and even ovens and bread machines.

Small and medium-sized firms are also aware of the changing marketplace. But if you ask them whether they will invest in the new technology, many would display hesitancy.

Who has already invested? How much is it going to cost? When will I get a return? Will customers really buy such products?

These are some of the questions commonly raised, according to yicai.com.

SMEs usually operate with tight resources. The slowing economy is already giving them lots of pressure. These small players largely make products for overseas brands, with profit margins at a few percentage points.

They simply don’t have much financial room to maneuver.

Lack of knowledge, and technological concerns, are also stopping them from taking the plunge.

Many SME owners don’t really know much about smart appliance technology, and they can’t afford to hire additional engineers for something that they aren’t sure about.

They are also rightly concerned about the merits of smart appliances.

Controlling appliances remotely through mobile phones may sound cool, but that doesn’t mean existing products should be phased out quickly, the firms argue.

White goods and kitchen appliances are quite different from mobile phones or other consumer electronics. Families usually want to use it for five to ten years or longer before considering a replacement or upgrade.

Some SME owners are worried that if they invest a lot in today’s smart appliance technology, which could turn obsolete in a year or two, they would suffer great loss.

Others doubt if customers are really going to buy this smart appliance idea.

Security is one hurdle. No one would like their air conditioner or TV being hacked by somebody and get turned on when nobody is at home. The concern will be worse if we are talking about, say, an oven.

Smart benefits sometimes look trivial. Are customers going to pay a lot more for marginal energy efficiency enhancement or internet connectivity that is just good to have but far from necessary?

This is why although SMEs are in general eager to jump on the smart appliance bandwagon, many are still watching and pondering.

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RC

EJ Insight writer

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