Qian Dongqi's three entrepreneurships and the robot revolution.
Written by Lu Yao.
Qian Dongqi is one of the few people who has rejected Sequoia Capital.
In 2013, Shen Nanpeng went south to Suzhou and went straight to Ecovacs headquarters, hoping to buy some old shares. At that time, Ecovacs, from the main vacuum cleaner to the transformation of sweeping robots, in the business of independent brands and OEM, the profits obtained by OEM have never been in deficit, and the market share of sweeping robot products is in the first place in China, far exceeding Philips and Panasonic. Qian Dongqi felt that the company was not bad for money, and he was not sure what capital could bring to Ecovacs besides money.
In 2015, Ecovacs Robot's operating income exceeded 1.5 billion yuan, becoming the TOP1 in the field of China's home service robots, and three years later it was listed on the Shanghai Stock Exchange, as the "first share of home service robots", and the value of Ecovacs after listing once soared 10 times, even more than 140 billion yuan.
At the same time, Qian Dongqi retreated bravely, handed over the company that had been in operation for 20 years to his son Qian Cheng, and turned to the sub-brand Timke, researching smart vacuum cleaners and floor scrubbers. As of 2021, in the floor scrubber category, Timco's market share has reached 70%, and its GMV has even surpassed Dyson. This is Qian Dongqi's second venture.
However, the inflection point came with the autumn of this year, and in less than three months, the market value of Ecovacs shrank by more than 50 billion yuan, and as of January 30 this year, it stayed at 20 billion yuan. Even more convincing than the market value is the actual financial performance, in the first half of last year, Ecovacs' sales revenue increased by only 02%, and the net profit attributable to the parent decreased by 33 year-on-year4%。
This is more like the cold winter of an industry,Among the household service robots,Sweeping robots are representatives,With obstacle avoidance、Navigation、Mapping and other core technologies have entered the bottleneck of innovation,The technological halo of the product is disenchanted,The competition of brands can only revolve around product functionality、Convenience and cost performance。 According to the data of Aowei cloud network, the sales volume and sales of sweeping robots in China both declined in the same period, and the rising stars Rock Technology and Cloud Whale are also facing the dilemma that it is difficult to sustain rapid growth in performance.
In the past, track dividends, technology and high growth expectations were the main logic supporting the valuation of robots. However, when a non-rigid demand and high unit price of digital household appliances begins to shift from the incremental market to the stock market, it means that there will be a greater cost to change the increment, and the market will also be reshuffled.
From OEM to brand, behind the growth of Ecovacs
Black-rimmed glasses, a thin figure, wearing jeans and a polo shirt, playing the guitar well, and Qian Dongqi in front of the camera is always smiling, although this 60-year-old entrepreneur seems approachable, his eyes are not ordinary bold and vicious.
In the 80s of the 20th century, Qian Dongqi quit his job as a teacher and went to Hainan alone to do foreign trade, and China's first vacuum cleaner was exported by him. In the early stage, he helped the foundry sell vacuum cleaners abroad, and later accumulated some funds, and then co-founded a factory.
Founded in 1998, the 40-year-old Qian Dongqi invested 1 million yuan to set up the company in Suzhou, starting from the OEM business of cleaning appliances, and produced the "supersonic centrifugal vacuum cleaner" the following year. Among the OEM brands of Ecovacs, there are many international brands such as Philips, Hoover, and Panasonic, which have subtly brought Ecovacs experience in brand and technology.
Many people will attribute the rise of Ecovacs to such a thing: a traditional foundry, in order to get rid of the labor-intensive industrial attributes, and the imbalance between high-intensity work and low returns, so it developed into an independent research and development enterprise. Indeed, Suzhou is an important city for an export-oriented economy, and most of the early local companies were foundries with low added value of their products, and they lacked core technologies, and many of them were facing the pressure of going out of business.
At that time, the leader of the vacuum cleaner industry was Dyson, a "multi-stage cyclone vacuum cleaner" no one surpassed, as a latecomer Ecovacs, Qian Dongqi's idea was to set up a patent cracking team, the purpose is to crack more than 460 patent terms of this product, and make improvements on the basis of it, and finally launch the Ecovacs version of the multi-stage cyclone vacuum cleaner with independent intellectual property rights.
However, such independent technology did not break the original OEM situation. In 2000, Qian Dongqi set up an independent R&D team, codename"HSR" (Home Service Robot), which specializes in the combination of vacuum cleaners and robots. As a new project, in order to maintain confidentiality and greater freedom, HSR's office is not located in the headquarters, and the team of only five people at the beginning consists of five people, including engineers in charge of machinery, electronic control, and patents, who are independent of the company's original organizational system and are a new entrepreneurial team.
For a long time, the field in which HSR is located is a no-man's land in China, and in the first year, the first robot prototype vacuum cleaner was born, with a simple structure and large volume; The following year, the team launched the first 35 cm high, self-walking robot for vacuuming, and it was not until 2006 that the product form was changed from robot-like to disc-shaped, which is more convenient to shuttle around corners, and added the functions of selecting the working mode according to the room area, automatically identifying stairs, and automatically returning to charge.
In this case, Qian Dong Wizards officially founded the brand "Ecovacs". At that time, it seemed that the home service robot was a typical high-tech product, involving the Internet of Things, sensors, intelligent core control, new materials, algorithms and other technical fields, and the market was willing to pay for its high premium.
In 2011, Qian Dongqi made an incomprehensible decision: to eliminate all vacuum cleaner business lines and focus the company's resources on the field of sweeping robots, which had not fully emerged. At that time, it had only been two years since Ecovacs launched the relatively mature mass-produced sweeping robot "DEEBOT", and compared with the company's original establishment of a complete vacuum cleaner production line and sales network, DEEBOT was not the main force supporting revenue.
If the brand positioning is small household appliances, Ecovacs may never be able to compete with big brands such as Philips, Panasonic, and Midea. But if it is positioned as a robot, Ecovacs can be the first in the industry. In Qian Dongqi's vision, Ecovacs will not be satisfied with only the tool-based products that complete a single task, but also want to realize the transformation from a tool, to a housekeeper, and finally to a partner.
In the five years from 2013 to 2018, the compound annual growth rate of domestic sweeping robot sales reached 5845%, with a compound annual growth rate of nearly 59%, far faster than other home appliance categories. Combined with the data released by the International Association of Robotics, starting with 2015, the market size of service robots will expand more than sixfold to $46 billion in the next five years.
During this period, Ecovacs attracted the attention of top VCs including Sequoia and IDG. On the eve of its launch, its service robot iteration has exceeded 20 versions, and it has also launched the butler robot unibot, but the response is mediocre compared to the sweeping robot.
Robotics is a technology-driven market, covering sensing technology, structure, engineering, algorithms, the Internet, big data, the Internet of Things in various fields, a new technology emerges, if the enterprise does not grasp it, it is likely to lag behind. ”
In 2018, when Ecovacs was listed, as the only company in the industry that owned both LDS SLAM laser navigation and VSLAM visual navigation products, this scarce target became a hot presence in the market.
Short-lived dividends
In the eyes of the outside world, Qian Dongqi always plays cards out of common sense, for example, after Ecovacs was listed, two major events happened to this company, one is that Qian Dongqi gave way to Qian Cheng and handed over Ecovacs to his son who returned from studying in Canada; The second is to start a second business by yourself and create a new brand of home appliances "Timke".
Before taking over Ecovacs, Qian Cheng, who was born in the 90s, was mainly responsible for the e-commerce business of Ecovacs, and then served as the president of the international department. According to the evaluation of former employees of Ecovacs, Qian Cheng has radically reformed the company after taking office, and strategically advocates high-end transformation. At the same time, Qian Dongqi's "Timke" also entered high-end smart household appliances.
Father and son fought on two fronts, but they had the same goal. In 2019, Ecovacs strategically withdrew from the ODM business of service robots, focusing on the development of its own brand and focusing on the mid-to-high-end clean electrical appliance market. In the same year, Timco released the Piaowan Smart Wireless Vacuum Cleaner, this time, his opponent was Dyson, a high-end home appliance brand known for its innovation.
However, the market has questioned their approach, and the management is dissatisfied with Ecovacs taking the money from the new listing to transfuse blood and add coco, and the internal situation has also been shaken after Shangfeng gave up stable ODM orders.
However, Qian Dongqi firmly believes that compared with Europe and the United States and other countries, the penetration rate of domestic clean small household appliances is less than 5%, and in the three years after the listing of Ecovacs, from the small household appliances business in the 2018 annual report, to the clean small household appliances business in 2019, and then to the smart life appliances business in 2020, the change in the title reflects the extraordinary reliance of Ecovacs on Timco. This business did not disappoint him, with an average annual sales volume of more than 6 million units, and the smart life appliance business almost equaled the service robot.
Until 2021, Ecovacs and Timco, which have first-mover advantages, have continued to increase their volumes, with total operating income exceeding 10 billion yuan and net profit attributable to the parent company exceeding 2 billion yuan. For most enterprises, the reasons behind the continuous growth are divided into two parts, one is the improvement of product power brought about by R&D investment, and the other is the brand effect brought by the increase in marketing.
However, at this time, the field of household cleaning robots is no longer a blue ocean. Taking floor scrubbers as an example, there are first cutting-edge brands chasing the first generation of floor scrubbers on the market, and then traditional brands such as Midea and Haier follow up. In just two years from 2020 to 2022, the number of floor scrubber-related brands has skyrocketed from double digits to nearly 200.
How high the technology content of the sweeping robot can determine whether Ecovacs is an innovative company. In an interview with **, Qian Cheng said that the lazy economy is in full swing, and Ecovacs has eaten the traffic dividend of content dissemination, and can preconceive to influence consumer decision-making, but the fundamental reason for the company's growth is high-tech technology.
But at a press conference last year, Qian Cheng publicly bombarded the sweeping robot industry, "Products obtained by plagiarism can only be similar in shape, let alone user experience." To some extent, this sentence also exposes the fact that the technical threshold of the industry is not high.
Taking sweeping robots as an example, the product function has already completed the iteration from random collision to global planning, the basic washing and mopping functions have been improved, most of the key technologies have been opened, and Ecovacs has even opened its own motor and other advantages to the B-end operation, including radar, motors, lithium batteries and other businesses.
In 2016, Roborock, which is part of the Xiaomi ecological chain, broke through the technical barriers of LDS SLAM and the high cost of LiDAR, and launched the first generation of global planning Mijia sweeping robot, with a price of less than 1,700 yuan, which is far lower than the same type of products of Ecovacs. Nowadays, LDS laser sensors have become the standard for entry-level products, as long as the budget is sufficient, and there are also TOF laser sensors, binocular vision recognition and other technologies.
Just like Ecovacs cracked Dyson's patent, in this industry, even if the new technology has patent protection, it is difficult to prevent latecomers from achieving the same function, and "imitation + integration" has become a trend in the industry.
According to open source**, in the context of intelligent electric vehicles, the market demand for lidar, computing platforms, cameras and other components has exploded, which is driving the development of the entire robot industry chain, with the rapid dilution of product unit price, the manufacturing cost of a single sweeping robot will drop from 1900 to 1600-1700 yuan in the future.
They selected Ecovacs' X1 Omni and T1 Omni, as well as Roborock's G10 and G10S for comparison, and found that these main models have been in a trend of price reduction since their launch, in order to exchange price for volume. Last year, after a set of price reduction + marketing combination, Ecovacs' product sales increased as promised, but the gross profit margin of the product was far lower than expected, and the net profit fell by 33% in exchange for price reduction and marketing. The prosperity of the industry has declined.
Price for volume
Ecovacs and Timco are not typical technology-driven enterprises, but market-driven cases. Some industry insiders commented that compared with science and technology enterprises, he believes that Ecovacs' growth path is not the same, and the latter is a solution based on user needs, rather than a technology-driven enterprise. This is not the same as Qian Dongqi's previous view.
Theoretically, users are more willing to pay a higher premium for demand-driven products. Looking back on the development of sweepers, according to GFK Zhongyikang data, the average price of sweeping robots has risen from 1300-1500 yuan in 2020 to 1830 yuan, and will continue to rise to 3210 yuan in 2022.
The secretary of the board of directors of Ecovacs has also publicly stated that sweeping robots are the only category that has not only not entered the first battle in the past 5 years, but has become more and more expensive. Coincidentally, some people engaged in the production of sweeping robots pointed out that since the sweeper of the all-round base station has become the mainstream in 2022, the products** including Ecovacs, Stone, and Cloud Whale have at least doubled.
Problems arise as well. The fundamental purpose of the sweeper is to replace people to clean the ground, if the basic needs of users can be met with about two thousand entry-level models, then the high-end flagship model loaded with AI, ** and other complicated functions, but it seems to be chicken. On the other hand, in fact, compared with foreign sweeping robots, the domestic premium is higher, for example, irobot's most popular item is priced within 300 US dollars, and the high-end version only adds functions such as self-dust collection.
As mentioned earlier,When technological innovation peaks,The most convincing thing for consumers is**,Referring to the past experience of air conditioners and microwave ovens,Sweeping robots don't seem to be able to escape the fate of traditional electrical appliances in exchange for price。
It is understood that Qian Dongqi is currently starting an internal business again, but this time it is aimed at cooking, launching the "Shiwan" stir-fry machine, he has high hopes for this new product, and believes that the biggest opportunity for Timco is in the kitchen revolution. However, if the business scenario is extended from floor cleaning to cooking and other fields, it will naturally lead investors to list it in the ranks of home appliance companies, and at the same time dilute the concept of Ecovacs "robot".
People are reluctant to wash clothes and sweep the floor, from the perspective of human nature is the same, the penetration rate of washing machines should be 100%, and there is still a lot of room for the penetration rate of floor scrubbers. Qian Dongqi's idea is very optimistic, and it cannot be ignored that with the entry of traditional home appliance companies into the category of small household appliances such as sweepers, floor scrubbers, vacuum cleaners, cooking machines, air purifiers, and hair dryers, it is inevitable that Ecovacs will compare with these companies.
In the long term, Ecovacs' annual R&D expenditure from 2019 to 2022 increased from 2700 million grew to 7400 million, compared with R & D expenses, the increase in sales expenses is even more, and it remains at about six times that of R & D in the same period.
Ecovacs has always flaunted its own high-tech label, but as Qian Dongqi himself said, to make consumer goods to research a generation, develop a generation, and promote a generation, like most of its peers, the company's current focus is also on the back.