In this interview between Fortune China and Ms Jingdan Na, Vice President of Marketing and Strategy and Chief Marketing Officer (CMO) at Tuya, we hear of the innovations in the IoT space and its role in climate change.
In June, Fortune China unveiled its 2023 list of influential Chinese companies in overseas markets, focusing on seven sectors. Notably, the Enterprise Service sector shines, with Tuya Smart leading as the world’s number one Internet of Things (IoT) PaaS provider by shipment volume. Tuya operates under a B2B2C model, boasting over 700,000 platform developers globally. The company’s unique success story includes dual listings in New York and Hong Kong, marking it as the first global IoT cloud platform on the stock exchange.
Tuya’s global success hinges on its one-stop services for international businesses, a departure from traditional direct product distribution. Key to this achievement is its partnership with Amazon Web Services (AWS), enabling Tuya to provide IoT services in 220 countries and regions worldwide.
Tackling global warming and IoT competition, Tuya ventures into frontier areas like Home Energy Management Systems (HEMS) for sustainable development and to capitalise on emerging market opportunities.
The collaboration of large enterprises and developers with Tuya, driven by technology, platform and reputation synergy, fosters the IoT ecosystem. HEMS, aligned with carbon neutrality goals, holds significant potential, particularly in European and American markets, making it a technology poised for success.
In the face of global warming, HEMS aligns with the goal of fighting climate change
According to data from the US National Oceanic and Atmospheric Administration (NOAA), the global average temperature exceeded 17 degrees Celsius for the first time. Just a day later, the record for ‘the hottest day on Earth’ was broken again, and it can be predicted that this record will be broken repeatedly in the future.
In response, the World Meteorological Organization (WMO) is urging countries to prepare for the impact on human health, ecosystems and the economy. The most direct impact is that the demand for high-energy-consuming appliances such as air conditioners has surged among consumers. Therefore, the concept of HEMS has once again been raised in public.
Na pointed out that HEMS is the future of Smart Homes: “According to global electricity data, residential electricity consumption accounts for 37% of total societal electricity consumption, and electricity usage is very inefficient, resulting in serious energy waste. In many places in Europe and America, electricity control is still manual.”
In Na’s view, with the popularity of IoT products, “there should be new technologies to drive the full digitalisation of home energy management, which is a great opportunity I saw last year and will also be the next turning point for Smart Homes.”
The concept and products of HEMS were first proposed in Europe and America as early as the 1970s, but for various reasons, market penetration has been extremely low and there are obvious technical defects. “Home electricity systems are still limited by wired protocols in many ways, so the number of devices connected is low. Many have not yet been integrated with power companies, so each part of the system is disjointed.”
Even such an elementary system “can help some regular households in the United States and Europe save 30% of their energy usage each year, saving over $400 in electricity bills per year.” At present, based on the IoT platform, HEMS have a clearer path to the market. Considering the recent surge in energy prices in Europe and America, the market starts to be profitable.
From the perspective of product commercialisation, Smart devices with power-saving functions, such as Smart plugs and Smart thermostats, have emerged and gradually gained popularity in overseas markets. These emerging products are parts of Smart Homes. Tuya’s product concept is even more aggressive, aiming not only to build an interconnected system of Smart devices but also to achieve precise electricity consumption data analysis. Ultimately, it seeks to truly achieve energy conservation and emission reduction in the Smart Home fields through home electricity strategy management.
Na summarised the logic behind this product as observation, execution, optimisation, and prediction. More specifically, it can be explained as the intelligence of electricity meters, the application of energy-saving devices, the optimisation of electricity use models, and the precise prediction and execution of electrical devices. This allows both passive monitoring and active and intelligent management of household energy, bringing convenience to users and saving money while being energy-efficient and environmentally friendly.
“Assuming that the electricity system adjusts in real-time, and the lowest electricity cost occurs at 4 o’clock in the morning, with HEMS’s intelligent prediction and execution, washing machines can automatically turn on when electricity cost is lowest, achieving a win-win situation for consumers and electric power companies,” Na said.
Once HEMS is widely popularised, the electricity bills received by consumers will be totally different. Future electricity bills can be similar to current mobile phone bills, with breakdowns of electricity usage and time for large and small appliances, lamps, and other products listed separately. For example, bills can show how much electricity the refrigerator and air conditioner used this month, or whether the appliance was more energy-efficient compared to the last month. This allows consumers to understand more directly the details of appliance power consumption and energy-saving algorithms of appliance operation, thereby optimising electricity consumption.
Currently, the best market for HEMS in Europe and America
Transitioning from empowering Smart Homes to providing home new energy management solutions is a huge blue ocean market, and the venture is in line with Tuya’s core competencies.
“Tuya serves as a platform, so it can have diverse observations and identify blind spots for other enterprises more easily,” Na explained. In recent years, energy prices in Europe and America have skyrocketed. “People used to not care about electricity bills, but now an increasing number of consumers and companies are starting to explore ways to save electricity.”
From a global perspective, energy prices are rising, while the target date for implementing the Paris Agreement, which aims to address climate change, is approaching, and the concepts of zero carbon and peak carbon have taken hold. Regarding this, Na believes that currently, the best market is Europe and America, especially Europe, according to market research.
“I think the European market is the most receptive and demanding of innovation. The cost of electricity in Europe is too high, so it is feasible to impress consumers with value-added services that can save electricity, ” Na said.
Ten years ago, Smart Home products seemed unaffordable, but now they have become common for households. Since the number of globally connected Smart Home products has exceeded tens of billions, the commercialisation of HEMS products will also be attainable in the future. Especially if the global heatwaves continue in the summer, the pace from vision to reality may significantly accelerate.
Looking into the development of the Smart Home industry, solutions for audio-visual entertainment, home and living, and home security systems have been greatly enriched, and the market competition is extremely intense. However, the Smart energy management field that has been neglected for a long time is still in its early stages of development, which means it has huge potential and is truly a blue ocean market.
Considering business development, Tuya seized the opportunity from the explosive growth trend of Smart Homes nine years ago, and firmly established the path of platform-based development with a focus on ‘connectivity + ecosystem’. Cooperating with AWS, Tuya has a significant chance to place itself at the forefront of HEMS deployment when the next decade’s opportunity arrives.
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