Local Report: India home technology industry thriving
A land of opportunity for those with the skills to capitalise on it, the custom installation industry in India is one of the most rapidly growing markets outside of the US and European hotspots. Charlotte Ashley finds out why, and what areas of the market are proving lucrative for integrators in the country.
On paper, working in the Indian residential industry in the last year should have been extremely difficult – new government policies, the de-monetisation and GST tax (introduced on 1 July, 2017) and a mixed real estate market may have created some insecurity, yet installers across the country are still successfully proving their worth.
“Now the market has picked up to a large extent, many projects that were on hold have resumed again,” says Rhythm Arora, AV consultant at Bengaluru-based Qubix Technologies. “We have seen a marked shift in quality recently,” adds Zohir Ramodiya, owner of Mumbai-based installation company Boom AV. “Our mid-level business has been shrinking but the large projects seems to be flowing in. I am feeling extremely positive. We’ve expanded the markets we work in (geographically and verticals) and have seen a good response,” he continues.
Ankur Bhatt, director at integrator Sound Sense, says the company has a full calendar of work and client roster for the next two years thanks to increasing awareness of AV and automation technology. “A period of slow-down is almost imaginable right now due to the volume of demand.”
Harshul Parikh, founder of Mumbai-based Trescent Lifestyles says the projects are able to begin easier in part thanks to RERA (Real Estate Regulation and Development) Act of 2016, designed to ensure more security to end users committing to properties.
Whilst analysts debate whether the Indian economy can achieve double-digit growth for 2017-18, the idea of a “connected” home is gaining serious traction in urban parts of the country with the most healthy real estate markets and a stable political climates. More broadly, this is fuelled in part by the growth of IT capabilities and spend of the upwardly mobile and tech-savvy, interested in owning the latest technology that can simplify their life. “Lifestyles are changing and the spending power of the upper and upper-middle classes is growing, and we’re benefiting,” notes Bhatt.
A recent report by Statista on the Indian home automation (covering AV, security, HVAC) pinpointed Pune (15%), Delhi-NCR (13%) Mumbai (12%), and Hyderabad (9%) as the leading cities driving growth among these individuals, even Amazon is ramping up its collaboration with the India real estate market. The same report forecast that by 2022 the Indian home automation market will surpass Rs 30,000 crore (€3.8 billion/£3.3 billion).
Most of installer’s projects are taking place in the domestic market to cater to the high demand, but some are travelling further afield. “A lot of our work is in Mumbai, but a number of projects are also in Bangalore, Delhi and Bhubaneswar, with one in Kolkata. Internationally, we are also consulting for a project in Dubai,” says Ramodiya on his company’s reach. “Due to the growing diaspora of Indians abroad, a number of companies are now getting work outside the country.”
“Qubix also works across India, Sri-Lanka and Maldives, and we hope to expand our reach into Hong Kong this year,” adds Arora.
“When someone goes to a car showroom they have an idea of the price tag of a particular model, but in our sector, the price tag can shock the client.”
Succeeding in the Indian market is nuanced and so much more then setting up shop, however. In total, there are approximately 40 CEDIA members spread across the country – a healthy figure, without even exploring non-members working in the sector. And competition is rife; “We find we are competing with companies from Singapore, UAE and parts of the West on a number of high value projects,” states Ramodiya.
Yet, as all installers agree, the spread of interest in home technology is chiefly down to one factor: word of mouth. “In our area of the market, word of mouth is by far the biggest endorsement. When someone goes to a car showroom they have an idea of the price tag of a particular model, but in our sector, the price tag can shock the client,” comments Ramodiya. “An endorsement from a satisfied customer therefore goes a long way to help bring a sense of normalcy to the cost.” Arora backs this: “Word of mouth, with support from social media, drives business here. For a large project, customers usually do a reference check, with some of their friends, known people in their network or an architect/interior designer – India is a land of relationships, and most HNW individuals are connected some way or the other.”
“On the whole, we’re seeing that, the influence of hands-free devices and security has been on the rise – people are looking for keyless biometric locks, universal remotes for various set-ups, live streaming services, and voice-activated devices and speakers,” says Bhatt on what clientele are currently commonly requesting. Parikh agrees: “There is a demand for-voice based control, despite to my surprise, large manufacturers such as Amazon and Google not doing enough to reassure customers about the security of their data.” He continues: “The demand for Netflix & Amazon Video and music services has also increased dramatically over the past year.”
“Multi-room AV systems are a must have,” adds Ramodiya. “The ability to stack everything in a central rack to free up space is also a big plus for a space-starved markets like Mumbai.”
When it comes to a custom installer’s lifeblood, they explain how they are often working for senior professionals with healthy budgets and ambitious goals about what they want to achieve. Consultant Arora lists renowned cricketer Virat Kohli, a YouTube millionaire and local TV star among his recent residential clientele, ranging in focus from whole-home automation and security systems equipped to auto-lock and inform of breaches by SMS/email and large home cinemas working with a ‘First Day First Show Server’ allowing the homeowner to privately watch movies on the day of their release (for $400 per download).
One project, titled ‘Clinical Retreat' (pictured above), from Sound Sense’s portfolio required the company to deliver a home cinema that had to be both “lavish” and entertain as many as 30 people with a “larger than life screen” in a limited space (i.e. 24.9ft by 18.9ft) incorporating pillars. It also had to adhere to CEDIA, HAA, THX and ISF standards and ensure noise isolation, as the space in question was actually below the client’s surgical clinic and office. A 5-row, 9.2.4 Dolby Atmos-quality movie-watching experience from an acoustically transparent, 2.35:1, 13-metre wide screen now can be enjoyed by up to 33. “This was a fantastic opportunity for our team to push the boundaries of our creativity, skillsets and the power to collaborative internally and externally to innovate and design a home cinema set-up to cater to very specific requests on a restrictive budget.”
Another recent project from Boom AV (pictured above/right), saw a banker’s dream for a home-wide system realised in his penthouse located in a 45-storey Mumbai apartment block. The installer delivered a distributed AV system, outdoor projection system in the terrace area and a discreet sound system in the living area. “As this was a residence where design was at the forefront, we had to be extremely careful while selecting speakers as we did not want to interfere with the aesthetic marked out by the interior designer,” says Ramodiya, who had to balance this with meeting the client’s request for a system to rival clubs when it comes to sound pressure and quality. Further little touches such a projector concealed behind an IP66-rated wall panel ensured the system was equipped to deal with Mumbai’s monsoon season.
For some, expanding into commercial is a natural progression. Some teeter (stating only around 10% of projects are commercial), but for some it’s a valued area of expansion. “Initially, we worked exclusively on residential installations. Over time, based on the requests, we handled installations in education and corporate spaces. We now handle the entire portfolio for corporate housing projects, but the mix of residential to commercial still sits at around 70/30%,” state Sound Sense’s Bhatt.
Consultancy Qubix has a stronger focus on the commercial market than residential (75/25%), and Arora says he sees clear differences between working on both sides; “A high-end residence can take three times the amount of time it takes to finish a corporate project of a similar, or even a higher complexity.” For residential-focused Trescent Lifestyles, Parikh says the demand for commercial projects doesn’t necessarily translate into value for them; “There is a demand for high-quality commercial jobs, however these projects are typically lead by the purchase teams of organisations with the focus being on the end dollar value being the lowest. For an integrator who wants to work on volumes this may be exciting, but it’s not attractive for us.”
Challenges in the marketplace
“Hiring the right staff in India is extremely difficult as there is no set individual that can meet our requirement,” says Ramodiya on difficulties faced in India. This means that a mix of new graduates and experienced staff will be hired. He continues: “We often have to look for personnel in associated fields and train them to fit what we need – for instance, a technician with a background in networking or IT will not understand the bandwidths required for a residential application of lossless video streaming on LAN.”
Installers say they have to look to on-the-job learning and their own resources, with help from others such as CEDIA, THX, videos and training from companies that do offer it, to mould their employees. “I find there can be less training available from residential brands as they are often represented by distributors who are often working in installation themselves,” says Arora.
“It would be a much better situation here if manufacturers had direct representation to ensure better after sales and training support."
Arora hopes more of the industry will invest in India going forward to propel it. “It would be a much better situation here if manufacturers had direct representation to ensure better after sales and training support etc. – this would lead to better quality work and more confidence among both integrators and customers.” Parikh, says he would like to see the creation of a unified body of businesses that are committed towards the overall improvement of the AV market in India. “Currently each business is represented individually by the owners, but collectively the industry can achieve a lot more if the businesses are committed towards overall growth, and not just their own.”
The quest for professionalism continues to be a challenge in India, as all installers agree that whilst striving to offer high quality proposals to clientele, some will simply look to win out simply by being the cheapest. “At the market level we face the challenge of an influx of new integration companies and prices being cut and resultantly harming industry standards and work ethic,” states Bhatt.
Ramodiya concludes: “Companies in India need to realise that solutions can always be value-engineered to fit budgets. Dropping prices is not the only way to win projects.” He continues: “Investing in trainings and attending trade shows around the world will help them up their exposure level and deliver better solutions to clients. This will raise their game and in turn help them win projects in the long-term.”