Author: Yuntan, Editor: Xiaoshi Mei
Breaking the "monopoly dividend" of irobot in the European and American markets, China's sweeping robot brand has risen rapidly around the world.
From shirts for airplanes, to the export of low-value-added industrial products, to the glory of China's intelligent manufacturing shining overseas. China's sweeping robots occupy the commanding heights of technology and begin to carry out technical "reverse output".
[Challenge the Iron Throne].
In 1990, MIT student Colin Ingres founded iRobot, and 12 years later, the company's first robot vacuum cleaner was introduced. iRobot has thus opened up this new track.
As the originator of the industry, irobot once occupied 80% of the global market share and became a dazzling star in the technology industry at that time.
On the surface, the sweeping robot is a cleaning appliance that replaces manpower, but the core is a technology product similar to consumer electronicsIt integrates optoelectronics, AI algorithms, visual recognition, materials science, mechanics and other disciplines, and is an out-and-out science and technology industry.
This means that the industry iterates rapidly, emerging technologies will continue to reshape the industry pattern, and it is very likely that even the former giants will collapse overnight, just like the film giant Kodak abandoned by the digital age, and Nokia replaced by Apple smartphones.
The turning point of the sweeping robot industry pattern occurred after 2010, with the introduction of laser navigation, visual navigation, AI algorithms and all-round products, iRobot is gradually declining.
A number of Chinese brands rely on efficient first-class chains, rapid iteration of new products and technological research and development strength, and have launched a strong impact on irobot's "Iron Throne".
According to data from GFK, in recent years, the sweeping robots launched by Chinese brands have continued to innovate in technology. By the end of 2022, China-made sweeping robots had accounted for nearly 50% of the overseas market.
Roborock is one of them. In 2016, Roborock went overseas with its self-developed LDS lidar and SLAM algorithm, and launched its own brand the following year, gradually getting rid of the "Xiaomi" label.
In the face of the offensive set off by Chinese enterprises, irobot has been losing ground one after another. Mojing data shows that in the second quarter of this year, the market share of irobot Meiya (Amazon in the United States) online channel sales decreased by 7% year-on-year5 percentage points, only 279%, showing a trend of declining quarter by quarter.
iRobot's market share is mainly stolen by Chinese companies, among which Roborock is the most eye-catching. Since 2021, it has successively surpassed EUFY and Shark, and by the second quarter of this year, its market share exceeded 20%, ranking second.
The performance of the European market is also very bright, and in the core region of Germany, in the first half of this year, Roborock ranked first in the German Amazon market share.
Due to the large living area of foreign families, and unlike the domestic floor, European and American families have more carpets on the floor. Therefore, although the emergence of floor scrubbers has stolen part of the market, butAfter the sweeping robot is integrated with the sweeping function, it still has huge growth space overseas, and the growth of overseas is significantly better than that of China.
In particular, in Europe and the United States, where residents' income and consumption power are strong, the compound growth rate of sales in recent years is significantly higher than that in China. From 2017 to 2022, the compound growth rate of domestic sales is only 3%, but the growth rate in North America and Europe is as high as 18% and 19%.
*: Public data.
Jeffrey Moore, a business consulting guru, pointed out in his book "Crossing the Chasm" that for a technology-based product to be popularized by the masses, it must first be 25% of tech fanatics come into contact with this product;Then, as technology advances and products become more user-friendly, it will attract 135% of early users;Subsequently, the penetration rate will gradually increase, and eventually it will become a product that is used by the general public every day.
The life cycle of technology-based products, **Crossing the chasm".
At present,Sweeping robot is still a "new species",There is still a huge space for penetration and product optimization and iteration overseas,It is very likely to become a necessity like a washing machine in the future,From a few people's consumption to everyone's rigid needs。
Therefore, although Roborock's market share in some overseas countries has been in the forefront, there is still huge room for it to continue to rise, both in terms of increment and value.
[Dimensionality Reduction Strike].
Different from the times when it was once at the trough of the smile curve, Chinese sweeping robot manufacturers went to sea, not to grab the market with "low price and low quality", but to make a comprehensive jump in high quality, high technology and high value.
Although sweeping robots started earlier overseas, their products are mainly low-end. Among the top 100 sweepers on Amazon's platform, products priced below $400 account for nearly 70%, and less than 7% are priced above $800.
This has a lot to do with the former industry overlord irobot, limited by the long cycle of new product research and development, research and development out of market demand, irobot has gradually fallen behind.
iRobot's current low-end model is still an old product from five years ago, and only two new products have been launched in the past two years, and some new technologies also come from technology sharing with Chinese companies.
In addition, in terms of the first chain, cost management, transportation, etc., irobot is inefficient and has fallen into a profit dilemma. Since 2022, iRobot has planned to "sell" itself to Amazon, and the deal** has dropped from $1.7 billion to $14$300 million.
According to the latest news, the deal was warned by European antitrust regulators, who are worried that Amazon will use its channel advantages to help irobot. The warning also cast a shadow over the deal, and if the restructuring plan ultimately fails, iRobot's business situation will be even more severe, which also gives Chinese companies a chance to overtake.
You must know that the development logic of overseas markets has evolved from the "from scratch" dividend in the initial stage of the industry to the dividend of product upgrading. It is clear that irobot has not been able to adapt to the current market changes.
It is the right time for Chinese brands such as Roborock to go overseas. Compared with iRobot's main product** below $300, Shark is mainly in $400-600, Stone is positioned in the middle and high-end, and the products** are above $300, and the high-end flagship model S8 Pro Ultra** is as high as $1599.
In the first seven months of this year, stones accounted for 41% of sales of more than $500, and 62% of sales of more than $800.
Such positioning is in line with industry trends, and the global clean appliances market size is 276$2.2 billion, up 35%, retail volume 14.7 billion units, down 22%。Sales are declining, but sales are increasing, showing that the average price of the product has risen, proving that consumers are willing to pay for high quality** value.
In 2022, Roborock's overseas market accounted for more than 52%, and in the third quarter of this year, overseas revenue increased by 65% year-on-year, and the three major regions of Europe, Asia-Pacific and North America all achieved growth of more than 50%.
These changes have been reflected in the latest financial report. Roborock's net profit in the first three quarters increased by 591% to 13600 million yuan, and the gross profit margin rose to 5434% all-time high. And the gross profit margin of overseas business (2022) is 531% is 8 percentage points higher than that in China, which is more conducive to feeding back the research and development of enterprises and achieving a virtuous cycle and stable operation.
*: Roborock's 2022 financial report.
And irobot fell into financial difficulties and deteriorated further, with a loss of 24.1 billion US dollars, and the revenue side has plummeted by 29%, and even the average price of products is declining, you must know that it itself is concentrated in the middle and low end. In the first half of the year, the average price of irobot products in online channels was only $283, a year-on-year decrease of 212%。The stock price also fell to a record low, and the management could only hope for a revival after being acquired by Amazon.
One rise and one fall, showing the correctness of Roborock's strategy of going overseas, and such a reversal is still continuing.
[The new king of going to sea in the birth].
Chinese companies are in the limelight going overseas, giving birth to the popular overseas short ** platform TikTok, the "king of African mobile phones" Transsion Holdings, the world's No. 1 charger brand Anker Innovations, and the ** cross-border e-commerce leader Shein ......
In the emerging field of sweeping robots, a new king is rising.
After experiencing the explosive growth of the industry's start-up period, due to the disturbance of the external environment, the sweeping robot industry has entered a short period of dormancy, and some enterprises have lost "trade and technology" and fallen from the altarWith scientific and technological innovation, model innovation, and market innovation, some companies have passed through the fog and moved forward against the trend.
Timely iteration of products based on market demand is the key to Roborock's success. At present, Roborock's all-round base station products integrate functions such as self-cleaning and self-dust collection, while iRobot's highest-end products only contain self-dust collection.
Different from China, European and American carpet culture is prevalent, and pets are generally loved, and the hair that falls out is easy to remain in the carpet texture. Therefore, overseas markets prefer products with strong suction power and easy hair cleaning.
At the 2023 CES exhibition, Roborock came up with a new product, S8 Pro Ultra, to better solve the above pain points. For example, the suction power is increased to 6000Pa, the dual rubber roller brush system is used to effectively resist hair tangling, and it is equipped with the latest 3D reactive obstacle avoidance to identify and clean pet feces, which is suitable for pet families.
Moreover, the roller brush and mop can be automatically lifted, which solves the pain point of using the sweeping and mopping machine to wet the carpet in European and American families, and is more conducive to the popularization of the sweeping and mopping machine.
With product micro-iteration to cater to the trend of overseas product structure upgrading, Roborock is a strong alternative to irobot.
At the same time, there is a significant difference between the overseas market and the Chinese market, and the channels, marketing and other dimensions must be adjusted in a targeted manner.
Previously, Roborock cooperated with dealers to enter overseas, and since 2018, it has begun to build its own channels, including the establishment of self-operated stores on platforms such as Amazon. At the same time, increasing Amazon's investment, uniting influencers and Internet celebrities on TikTok, Facebook, Instagram and other platforms, since the beginning of this year, Amazon Prime Day has increased its traffic by 55% year-on-year compared with last year.
It is worth mentioning that, unlike China, Western Europe and North America are mainly offline, and Roborock has now gained a good reputation and laid offline channels, and has now advanced to more than 180 offline target stores in the United States.
Thanks to the improvement of product structure and the self-operated model (North America), Roborock's overseas profitability is stronger. In the low-end band, irobot, shark and other companies are fiercely fighting, and Roborock's high-end products with a cost of more than $800 are quite popular, which means that Roborock is the first to enter the high-end market and enjoy differentiated dividends.
At the same time, the company also invested 4The self-built factory of 600 million yuan will enhance its independent and controllable ability and enhance its competitiveness in multiple dimensions.
Since irobot launched its first sweeping robot in 2002, the industry has gone through a decade of historyBreaking the initial stage of "starting from scratch", the current industry has entered the development period of "supply and demand matching", if a company creates products that meet market demand in a timely manner, after the supply and demand matching, it will usher in a blowout outbreak, and take the lead in accumulating first-mover advantages and technical barriers.
Roborock has the potential to grow into the next "king of the sea".
Disclaimer of Warranties
This article involves the content of listed companies, and is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their statutory obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.).The information or opinions contained herein do not constitute any investment or other business advice, and Market CapWatch disclaims any liability for any actions resulting from the adoption of this article.
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