Trout once mentioned in the book "Positioning" that in order to occupy the category in the minds of consumers with limited capacity, the best differentiation of the brand is to become the first, to be the category leader or pioneer, and the sales are far ahead;Secondly, differentiate the category, so that the subdivision category is the only one, that is, the first subdivision category.
This sentence also applies to the sweeping robot industry, as well as Ecovacs (SH:603486), the leading player in the industry. With the first-mover advantage and scale effect, Ecovacs, which took the lead in occupying the position of the industry, grasped the development dividend and won the largest piece of cake in the market segment.
After the tide of the flow recedes, it is only known who is swimming naked. As more and more brands pour into the sweeping robot track, the market gradually returns to the product force-driven, and Ecovacs' market share is gradually "eroded" by other new-generation brands, and its performance is "swallowed" by high marketing expenses.
Ecovacs, which has always been high and high, is now struggling to defend and expand the road.
Ecovacs' relationship with sweeping robots can be traced back to 2001.
In this year, Ecovacs developed the first robot for automatic walking vacuuming, and officially launched the first sweeping robot "DEEBOT" in 2006, completing the transformation from traditional vacuum cleaner manufacturing to sweeping robot under the leadership of founder Qian Dongqi.
In the following ten years, Ecovacs has been deeply engaged in the field of cleaning, and has successively launched the air purification robot AirBot, which can actively find pollution sources, the world's first window cleaning robot WinBot, and the world's first robot butler UniBot, extending the product layout from a single sweeping robot category to a complete product line of household robots.
In 2013, Ecovacs released the world's first DEEBOT 9 series with whole-house cruising mapping and remote control functions, leading a new trend of global planning of "mapping first, cleaning later". Technological breakthroughs have pushed the practical value of sweeping robots to a higher level, and Ecovacs' industry position has been further consolidated.
According to the data, in 2016 and 2017, the market share of Ecovacs' online channels was 502% and 488%, and the market share of offline channels was 478% and 519%, ranking first in domestic sales, and in the "Double Eleven" activity from 2014 to 2017, it won the sales championship of household appliances on multiple platforms.
In May 2018, Ecovacs was listed on the main board of the Shanghai ** Stock Exchange with an issue price of 2002 yuan shares, the first day of listing, up 4401% to close at 2883 yuan shares, with a total market capitalization of 115300 million yuan. At that time, it was reported that the stock price of Ecovacs reached 28 in less than 5 minutes02 yuan shares.
Since 2020, the epidemic at home and the demand for consumption upgrades have jointly given birth to a "lazy economy" with time value as the core concept, and Ecovacs' intelligent sweeping robots have ushered in new growth points. In 2020, Ecovacs achieved revenue of 723.4 billion yuan, a year-on-year increase of 3617%；Net profit attributable to the parent company 64.1 billion yuan, a year-on-year increase of 43122%。
At the same time, Ecovacs' share price continued to rise, hitting 252The 71 yuan share reached a record high, with a market value of more than 140 billion yuan, and was once called "sweeping the floor" by the capital market. In the same year, the company earned 1308.6 billion yuan, a year-on-year increase of 8090%；Net profit 201 billion yuan, a year-on-year increase of 21351%。
After the peak, it's a long downhill journey.
As of December 8**, Ecovacs shares closed at 3997 yuan shares, single-day **084%, the highest **98 compared to the year37 yuan shares "halved", with a cumulative decline of about 60%;The total market cap is 2304.6 billion yuan, a relative decrease of about 117 billion yuan from the peak of 140 billion yuan in 2021.
Not only that, after Ecovacs released its 2023 interim performance report, the company's share price deviated by more than 20% in three consecutive trading days on August 25, 28 and 29, which is an abnormal fluctuation in trading according to the relevant provisions of the "Shanghai ** Exchange Trading Rules".
Bedo Finance found that behind the sluggish share price of Ecovacs, there are not only objective reasons for major emerging brands to occupy the market, but also the impact of the brand's shift from "indiscriminate price increase" to "bloody price reduction" under the new trend of market consumption due to the ebb of industry traffic and the pursuit of cost performance.
According to the data of Aowei cloud network, with the increase of industry entrants, the online market share of Ecovacs sweeping robots in 2021 and 2022 will be 38 respectively63% and 3435%, and the online market share of sales was 4498% and 3983%, all of which showed a downward trend.
Previously, it was reported that sweeping robots have been "volume and price divergence" since 2019, and the average industry price at that time was 1479 yuan, and the sales volume was 5.33 million units;In 2022, under the "involution" of many manufacturers stacking parameters and dazzling technologies, the average price of the industry will come to 3,175 yuan, but the sales volume will drop to 4.1 million units.
As far as Ecovacs itself is concerned, the company's self-produced service robots will sell about 311 in 2022890,000 units, down 1250%；The sales volume of smart living appliances is about 446540,000 units, down 953%。In addition, Ecovacs' inventory as of the end of 2022 increased by 2023% to 290.6 billion yuan.
On this basis, Ecovacs' total revenue in 2022 was 1532.5 billion yuan, a year-on-year increase of 1711%, the growth rate slowed down significantly;The net profit attributable to the parent company was 169.8 billion yuan, down 1551%；The net profit after deducting non-profits was 172.7 billion yuan, down 12 percent year-on-year89%, falling into the bottleneck of "increasing income but not increasing profits".
Forced by the dual pressure of consumer demand change and low performance growth, Ecovacs chose to bow to the sinking market, trying to exchange for increments in the stock market by reducing prices. In August 2022, the price of Ecovacs' main product T10 OMNI was reduced by 800 yuan to 3,999 yuan, and it was further reduced to 2,699 yuan during this year's "Double 11" period.
However, the move proved to have failed to reverse the decline in Ecovacs' performance. In the third quarter of 2023, the company's revenue was 338.7 billion yuan, a slight increase of 2 year-on-year58%；Net profit attributable to the parent company 1961230,000 yuan, a year-on-year decrease of 9200%；The net profit after deducting non-profits was 1610610,000 yuan, a year-on-year decrease of 9393%, and the profit is almost halved compared to the same period in 2022.
Ecovacs' cumulative revenue for the first three quarters was 1053.2 billion yuan, a year-on-year increase of 402%；Net profit attributable to the parent company 60.4 billion yuan, a year-on-year decrease of 4621%。Regarding the sharp decline in profits, Ecovacs said in its financial report that it was affected by macro and competition factors, the decline in input-output returns in the domestic market and the early investment in the expansion of some new categories.
The cumulative revenue of Ecovacs' biggest competitor, Roborock (SH:688169), in the first three quarters was 568.9 billion yuan, a year-on-year increase of 2951%；Net profit attributable to the parent company 136 billion yuan, a year-on-year increase of 5910%。Single-quarter revenue of 231.5 billion yuan, a year-on-year increase of 5756%；Net profit attributable to the parent company 62.1 billion yuan, an increase of 16038%, with double-digit growth in a number of indicators.
The most stable moat in the smart home industry is the technical barrier, and in order to consolidate the technical barrier, it is naturally inseparable from continuous scientific and technological research and development. However, Bedo Finance found that although Ecovacs publicly claims its model of "technology patenting, patent standardization, and standard internationalization", its R&D investment in real gold is not much.
In 2020, 2021 and 2022, Ecovacs' R&D expenses were 33.8 billion yuan, 54.9 billion and 74.4 billion yuan, and the R&D expense rate was respectively. 20% and 485%, which is much lower than the sales expense ratio for the same period. 74% and 3017%。Not only that, the company's sales expenses growth rate in 2021 once reached 10739%。
In contrast, Roborock's R&D expense ratios for the same period were: 56% and 738%。According to Wang Hui, general manager of Dreame Technology China, the company's annual R&D investment accounts for more than 10%, and the number of technical personnel accounts for more than 70%, both of which are higher than Ecovacs' R&D expenses.
In the first three quarters of 2023, Ecovacs' R&D expenses were 60.5 billion yuan, compared to 54.1 billion yuan, an increase of 1180%；The selling fee is 341.6 billion yuan, which is nearly seven times the R&D expenditure, and compared with 285.1 billion yuan, an increase of 1980%。
From this perspective alone, Ecovacs' self-proclaimed "high-tech" is largely made up of marketing, and its high sales expenses continue to squeeze profit margins.
In the author's opinion, the root of Ecovacs' predicament lies in the fact that as the first person to eat crabs in the industry, it has not set a technical threshold that is difficult for other brands to achieve. In the context of the industry's upstream components, parts, systems, and software, it is difficult for "sweeping the floor" to escape the fate of latecomers and homogeneous competition.
It is undeniable that Ecovacs has a keen sense of the market. Under the market change of the unstable leading position of sweeping robots, Ecovacs continues to deepen the field of cleaning and broaden the use scenarios of intelligent cleaning. At present, Ecovacs has released the intelligent lawn mower robot GOAT G1, and the commercial cleaning robot DEEBOT Pro K1 and M1.
At the same time, Roborock is also seeking more market possibilities. In February 2023, Roborock's "Molecular Sieve Washing and Drying Machine H1" was scheduled on major e-commerce platforms, officially sounding the clarion call for its entry into the washing machine market. At the beginning of September, Roborock further launched the MINI washing and drying machine M1.
In addition, according to Beduo Finance, Chang Jing, chairman and general manager of Roborock, also founded Shanghai Luoke Intelligent Technology Co., Ltd., which plans to jointly build a new energy vehicle brand Polar Stone Automobile with Beijing Automobile Factory. At present, Polar Stone 01 has started the first batch of user delivery.
It is not difficult to see that the leading brands represented by Ecovacs have not rested on their laurels and buried themselves in the changes in the market, but have turned their attention to a broader market and improved the thickness and depth of the brand by broadening the incremental space.
Zhimeng once pointed out in the "2023 China Consumer Trends Report" that no matter how the communication touchpoints change, consumers always believe in the power of well-known brands when choosing, and in such a noisy era of information, brands are still the key to allowing consumers to obtain a certain choice.
At the end of the day, it's the brand that will always be free traffic. In the case of having a certain market reputation, Ecovacs should consider how to be down-to-earth, build long-term brand value, and create a unique and irreplaceable brand image rather than continuing to use marketing for growth to win the attention of consumers.