How To Break The Involution Of The Sweeping Robot Industry?

"I didn't expect the competition to come so fast."

In the past 8 years, the sweeping robot has entered thousands of households from a fever product. Now new players have entered the market one after another, and large factories have successively deployed. The sweeping robot has become a must-have in household products.

The competition of the Red Sea has also accelerated the sweeping robot industry to enter a state of involution.

At the moment of product convergence, price competition, and high homogeneity, how to break the current involution has become a question that sweeper companies need to answer in the second half.

1. Polarization and Involution

The sweeping robot industry has begun to polarize.

The leading companies launched high-end and high-priced sweepers to hit the high-end market and occupy the technical high ground; white-brand machines and cheap machines launched low-end and low-priced machines to occupy the low-end market share.

Enterprises with different ranks, different sizes, and different positioning have entered the field of sweeping robots.

From the perspective of product and price positioning, when the price of high-end products reaches 6,000 to 7,000, there are also a large number of white-brand machines, the price is only a few hundred yuan.

Benefiting from the increase in unit price, the market sales of high-end sweeping robots have increased significantly. Aowei Cloud data shows that the proportion of sales of sweepers above 3,500 yuan will increase from 14.1% to 43.8% from 2020 to 2021, and there will still be some in 2022. improve.

On the other hand, the sweeping robot brands in the sinking market provide surprising products in low-tier cities, towns and other markets, with an average price of less than 1,000 yuan, or even a few hundred yuan.

From the perspective of market size, according to the forecast of Aoweiyun, the retail sales of clean electrical appliances in 2022 will be 37.4 billion yuan, and the retail sales volume will be 32.19 million units. As the largest sub-category of the cleaning track, it is expected that the annual retail sales of sweeping robots will reach 6.01 million units. With the rise in the price of sweeping robots, it is expected that the annual retail sales of sweeping robots will reach 13.8 billion yuan.

The continuous expansion of market size and profit space has attracted many players to enter the market.

In the past two years, in addition to the new top manufacturers such as Yunjing and Zimi, there are also cheap sweeper manufacturers such as Home Guard on Pinduoduo, as well as many white-label manufacturers.

The sweeping robot is no longer a "big toy" in first-tier cities, but a national product in home appliances. From first-tier cities to township families, consumers are increasingly accepting sweeping robots, and the concept of just need is deeply rooted in the hearts of the people.

The real reason for the phenomenon of polarization is that the top brands have launched high-tech products to enhance their competitiveness and maintain a differentiated competitive advantage through high R&D and high cost support.

According to the statistics of Aowei Cloud, among the top 10 brands of sweeping robots in China in 2021, the total retail sales share of Roborock Technology, Ecovacs, Yunjing and Xiaomi will reach nearly 90%.

In addition to Roborock Technology, Ecovacs and Xiaomi Mijia sweeping robots, brands such as Huawei and the old home appliance giant Haier have also begun to cross-border into this industry. In addition, there are some new players, such as Cloud Whale, Chasing, etc.

Under the high competition, the homogenization of enterprises from marketing to product functions, and then to price positioning has occurred.

Impacting the high-end has become a differentiated competitive strategy for head-sweeping robots.

In August last year, Roborock launched the G10S series of self-cleaning products, which have both self-cleaning and self-collecting functions; iRobot's high-end model S9+ series focuses on sweeping functions and is equipped with a self-collecting base station; Yunjing's J2, Haier JH65U1 etc. have launched a sweeping and mopping robot that automatically cleans and dries mops.

With the launch of high-end product series by leading manufacturers, the price of the sweeper market has further increased. The price of Stone Technology has reached 5,799 yuan, Haier's JH65U1 is priced at 4,699 yuan, and iRobot's S9+ series is equivalent to 7,000 yuan.

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Image source: Daily Economic News (data map)

2. High-end or cheap?

While the market is gradually maturing, it should be noted that the growth of the sweeping robot industry began to slow down in the first half of this year. Aowei Cloud (AVC) data shows that in the first half of 2022, the retail sales of sweeping robots was 5.73 billion yuan, a year-on-year increase of 9%, and the retail sales volume was 2.01 million units, a year-on-year decrease of 28.3%.

With a high degree of homogeneity, for consumers to choose a sweeping robot, there is almost no difference except for the brand.

How do sweeper companies establish competition barriers and how to seek market increments?

In the current situation, some companies have occupied the market by lowering prices and using cheap product strategies, and by launching low-priced sweepers that meet basic functions, they compete with a number of white-brand companies to occupy the sinking market.

Another part of the enterprise is to build a competitive advantage with higher technology and experience through high-end products.

Under the two strategies, the market has already given the answer.

In the first half of this year, with the overall slowdown in the market of sweeping robots, self-cleaning models, washing machines, and self-collecting models have higher prices, but products that can provide consumers with a more "lazy" experience have seen a significant increase in sales.

Aowei Cloud report shows that the proportion of self-cleaning robots in the first half of 2022 has increased significantly, from 31.4% in the same period last year to 48.6%, an increase of 17.2%, followed by self-cleaning & self-cleaning models, accounting for 33%, The two together account for more than 80%. With the mopping function and the machine can wash the mop by itself, it has become the first choice for consumers to buy.

Taking Roborock Technology as an example, in August last year, the self-cleaning product G10 series was launched rapidly. According to Ovi statistics, the Stone G10S series ranks first in domestic sales in the self-cleaning category, with a cumulative sales volume of 210,000 units, sales of more than 900 million yuan, and a market share of 8.22%.

High-end technology has brought a substantial increase in performance to Roborock Technology, and the performance of new products has ushered in a rise in both volume and price. In 2022, the sales of H1 Stone Technology brand products will exceed 1.1 million units, achieving sales of 2.922 billion yuan. At the same time, the market share of stone products in the domestic market will reach 23.57%.

In addition, according to Euromonitor research, Stone is a leading brand in the global high-end market, not only has strong sales performance in China, but also has a high market share in Europe, Japan, South Korea and North America. From July 2021 to June 2022, Roborock Technology ranked first in the global high-end robot vacuum cleaners in factory sales, and ranked first in the global robot vacuum cleaner industry.

3. Sweepers must take the road of self-built production capacity

If we look back at the development of sweeping robots in the past few years, we can find that with the popularization of sweeping robots, the scale effect has also brought about the benefits of technology, and the cost of the original technology has been continuously reduced.

For example, sweeping robots with basic functions such as route planning and infrared perception have been decreasing in price in recent years, and have gradually become mainstream and standard products in the sinking market.

This also brings a revelation to the current sweeper companies: the existing high-end technology will eventually benefit, and the core competitiveness of future companies will come from industrial advantages and continuous innovation.

Self-built production capacity is an inescapable way to build industrial advantages.

The industrial advantage comes from whether the company can provide consumers with more competitive prices and more guaranteed product quality through cost control. And domestic brands in many fields have more or less stepped on the pit of OEMs on the road of controlling product quality.

Recently, Stone Technology has started to build its own factory.

On June 27 this year, Stone Technology announced that it plans to use over-raised funds of 460 million yuan to increase capital in Huizhou Stone, a wholly-owned subsidiary, for the construction of a self-built manufacturing center project. After the project is put into production, Roborock Technology will switch from the previous fully outsourced production model to a combination of outsourcing and self-construction.

Self-built production capacity sounds like the right direction, but it is not an easy path to implement.

In the short term, Stone Technology's self-built factories will face pressure on capital expenditures, as well as various links such as factory production ramp-up and efficiency improvement, but in the long run, the advantages of self-built factories will gradually become apparent.

The most obvious effect is cost reduction and production capacity controllable. By transforming OEM into self-purchasing raw materials and controlling the entire production process, it is possible to control the overall production cost and improve the cost and selling price advantage of the terminal.

In addition, it is worth noting that after building a factory, the brand can truly realize the integration of production, research and sales, help enterprises to feedback sales to research and development, and apply new technologies to production more quickly with research and development results, improving the flexibility of enterprises. sex.

To put it simply, self-built production capacity can be achieved, the price is lower under the same quality, and the products under the same technology are launched first. Technology will eventually benefit, but the continuous introduction of technology can maintain the vitality of enterprise innovation.

Chang Jing, founder of Stone Technology, has a very good saying about the impact of innovation on the industry.

"Product capability, quality capability, cost capability, efficiency capability, marketing capability, etc. are all basic capabilities. With these capabilities, enterprises can survive; but if they want to live well and surpass competition, they need to have sustainable innovation capabilities. That's the core competency."

"Product, quality, cost, efficiency, marketing, and innovation are a hexagon. If the "cause" of the hexagon is good, the "effect" of the enterprise will naturally be good."

How to build sustainable innovation capabilities is the highest priority in the top-level design of enterprises