The golden age of a small household appliance | 36 Kr new wind direction

Doing business in China in 2021, whether it is consumer electronics, household appliances, smart homes or robot companies, sweeping robots are a single product that cannot be bypassed.

If you use one sentence to describe the sweeping robot industry at the current point in time, it is at this moment when it seems to be moving towards prosperity together, and a new round of fighting is beginning. Maybe the bullets could fly a little longer, but the gunshots were getting closer.

Starting a business in China, the competitive environment is easy to enter the red ocean from the blue ocean and then to the blood sea stage. This is the case with the sweeping robot industry, which has always been highly expected by capital, when the boss Coworth rose 10 times to 100 billion in the secondary market; capital targeted the cloud whale intelligence in the primary market, and the valuation rose 15 times after benchmarking.

The market's growing signal gun has sounded, and almost all players can smell blood like a keen hunter.

"Although our solution can be used on a lot of hardware, the most important thing to buy this year is the sweeping robot, which is the market heat." A sweeping robot supplier told 36Kr. In the "618 promotion", Cleaning appliance brands such as Tim Ke, Coworth, Yun Whale, and Stone Technology completed a 14-fold increase in half an hour in Suning alone; the new brand of sweeping robots , Youli " , also completed a turnover of 45.49 million yuan , an increase of 1584% year-on-year.

If it is extended to the previous November, Aowei Cloud Network expects that 40% of the cleaning appliance category will be contributed by sweeping robots, becoming the main driving force for growth. This also explains why so many companies are entering the market to find gold while it is hot. According to the data of Tianyancha, since 2018, the annual registration growth rate of China's sweeping robot-related enterprises has remained at about 40%, and it has maintained an annual growth rate of more than 100 for three consecutive years.

According to the estimation of industry researchers, the domestic sweeping robot market is 100 billion, and the current penetration rate is only 4%-6%; at the same time, with the gradual achievement of "self-cleaning", "more convenient" and "true obstacle avoidance" functions, consumers buy sweeping robots are no longer "big toys" under the hunting experience, but also smart home appliances with requirements for cleaning power.

Behind the heat also need to be calmly looked at, an investor who has long observed sweeping robots told 36Kr that the market penetration rate of washing machines has achieved explosive growth after reaching 5%, and the current penetration rate of the sweeping robot market is up and down. "Before Q4 2022, the industry will usher in a reshuffle, the differentiation will be more serious, and perhaps the proportion of each remaining company will be more balanced, but the homogeneous low-price competition enterprises will definitely be washed out."

There are often signs in the early stage of the reshuffle, and some industry veterans have begun to be unable to really see the industry variables. For example, Silver Star Intelligence, which was established in 2005, as one of the largest manufacturers of sweeping robots in China, has set up a marketing department this year. The purpose is to get close to the C-end again to understand consumer demands, because consumers are changing faster and faster, and the stage of making decisions based on experience alone has passed.

What is more interesting is that this market competition point is many and mixed, perfectly integrating the three elements of technology, consumption and life, and it is this fusion that gives this single product more "superpowers". Whether the label for sweeping robots is a household appliance or a home IoT entrance, the industry wants to know what the future trend is?

After in-depth exchanges with more than a dozen sweeping robot companies and investors and researchers in related industries, 36Kr tried to answer the following questions:

1. What does it take to be a sweeping robot? Is the barrier to entry high or low?

2. What are the current competitive points in the sweeping robot industry? How should companies shape the moat?

3. What difficulties need to be broken through in the branding of sweeping robots?

4. Xiaomi, hardware boss, or grassroots, who can laugh to the end after the stage victory?

On the occasion of the big waves

In October this year, the smart cleaning home appliance company "Pursuit" announced that it had received a 3.6 billion Series C financing, shocking the industry, because it was the largest financing in the field of sweeping robots to date. The significance of this benchmarking event is that "the space of the Jiaqing track has become bigger", Yuri CEO Kamu told 36Kr at that time.

At that time, "Yuli" also just released a self-cleaning washing robot UONI A1, which creatively put the washing function into the sweeping robot, which was the first in the industry. After the release of the new product, the team state still maintains the battle mode, media docking, logic output, product display is almost in one go, there is no sense of dragging mud and water, it looks like it is already a skilled worker.

An investor who participated in the "pursuit" of this round of financing once told 36Kr that "the intuitive feeling of this financing is that the amount is large, the robbery is strong, and the pace is fast", and it should be known that before 2020, the track of cleaning home appliances is almost not much invested, so it is not surprising that it has become a landmark event.

The discussion around this huge financing is also polarized, with one side being an affirmation of the home cleaning industry and the other around how the money will be spent. After all, this number is much higher than its peers, and it is not so difficult to build a sweeping robot.

This entrepreneurial enthusiasm is not only reflected in "Yuli", but also in the intelligent cleaning robot companies "Jihai Technology" and "Beetle Intelligence" companies in Shenzhen. 36Kr feels more enthusiastic about the industry within their team, from the details to whether the embedding of a side brush is screwed in or inserted, how big the turntable design of the rag is so that it will not cause secondary pollution, and so on.

This is just the tip of the iceberg, this year's financing of the sweeping robot companies also have Trifo, Wow Li, Lesheng Intelligence, Shunzao Technology and other more than a dozen. But from the supply chain side, it is almost a bloody sea. Because more than 90% of the world's sweeping robots are produced in Guangdong, China. According to the data of the General Administration of Customs, the cumulative export of vacuum cleaners (including sweeping robots) from January to September this year was 100 million units, an increase of 15.8% year-on-year.

So, what exactly does a sweeping robot need? From the perspective of the industrial chain, the upstream is parts manufacturers, including LDS ranging modules, rubber tires, motor/battery equipment, vacuum equipment, motherboard chips, PCB boards, other parts, etc., can also be found in Guangdong, where the supply chain is perfect.

"The motherboards of various models of sweeping robots are basically produced in Guangdong. Low value-added chip modules are also produced locally. Special high-end color printing factory, only Guangdong production. Thanks to the fact that mobile phone manufacturing giants are in Guangdong, a number of high-quality suppliers have been cultivated. Wang Lilei, chairman of "Baole Robot", once told the media.

Founder Securities once calculated an account for the main parts in a sweeping robot research report, even if it is purchased according to the highest price, the cost price of a sweeping robot is only 138 US dollars (about 879 yuan), and Zhang Jinru, the secretary of the board of directors of "Silver Star Intelligence", also confirmed this view: "The cost of most low-end machines is basically less than 400 yuan. ”

Sweeping robot parts price range

Once you have the parts, it's the production process. The middle reaches of the sweeping robot industry chain are manufacturers, and the participants are divided into three categories: professional manufacturers (iRobot, Coworth, Stone Technology, etc.), vacuum cleaner manufacturers (Dyson, Shark, etc.) and traditional home appliance manufacturers (Haier, Midea, LG, Samsung, etc.).

In this link, we basically choose OEM (that is, OEM production cooperation) because the cost is lower. Pan Li, the operator of a sweeping robot manufacturing factory in Dongguan, told 36Kr, "The cost of opening a mold is about 200,000 to several million, and customers generally choose the middle price." But if you sell it overseas, you can at least make a profit in renminbi against the dollar. ”

Factories like Pan Li have tens of thousands of them in Guangdong, and many manufacturers have made a lot of money on sweeping robots this year, "for example, some factories are specialized in doing Pinduoduo, the unit price is about 200-300 yuan, and this year can achieve 80 million to 100 million revenues", Pan Li told 36Kr.

In fact, the larger cost still occurs downstream in the industrial chain - the promotion channel, which includes its own and third-party e-commerce platforms. For example, Xiaomi, JD.com. "If you do a brand, the money spent on the channel may directly lead to a doubling of the cost." But some products can attract people as long as the price is low enough, and they can also save the channel fee," said Zhang Jinru, secretary of the board of directors of Silver Star Intelligence.

Therefore, as long as the pricing is low enough, it is easy for consumers to buy and test the waters. If the market is big enough, the pricing is low enough to make quick money, which is a business model.

The bad thing is that it is bad money, "the existence of bad money will disrupt the market order, on the one hand, the low price will squeeze the space for innovative products, on the other hand, it will reduce market recognition." An industry investor told 36Kr that this kind of hilarity can only be a short-lived glory, "just like the early copycat smart phones, and then the later smart speakers, basically the same group of people are making fast money." ”

If everyone goes to make quick money, there will be no progress in the industry. Although it takes more cost and effort to make good money, there are always companies that insist. Taking the explosive products under technological innovation as an example, Stone Technology rushed out with its self-developed laser navigation technology, not to mention the cloud whale that washed and dragged the whole.

It is precisely because of the dare to invest in research and development that there is a possibility of overturning the original module and reconsidering adaptability, and innovation can also appear. From the perspective of research and development expenses, the corresponding "Stone Technology" invested 117 million yuan, 192 million yuan and 263 million yuan respectively from 2018 to 2020, which was large and continued to increase; the "Cloud Whale Intelligence" that decided to build a refined brand also built its own factory in Dongguan from the beginning, and the R&D headquarters was located in Songshan Lake.

In this case, the research and development threshold has become a barrier for new entrants. The "Beetle Intelligence", which has just entered the game, was established in January this year, and the first product released was in December this year, "a year of research and development, board playing, and the production cycle of the whole machine is already very fast." Zheng Quan, CEO of "Beetle Intelligence", shared with 36Kr the development process of what he jokingly called the "Messy Cape Hammer Method".

"Generally speaking, the manufacturing of sweeping robots needs to play 2-3 times of hand board, each time there will be 10 samples out of the hand board, so that the hand board is 40-50 million, we play a total of seven hand boards." What's more expensive is that the R&D process requires multiple versions to be developed at the same time, and each version must be as coupled as possible, "because you don't know which version can run out last, and the key devices have to prepare more than 500 at a time." ”

In today's market, high prices will still have a certain threshold for consumers. "But this is also a stage where volume and price rise together, and it is a critical period to increase market penetration," Ding Lijun, a partner at Cathay Fund, told 36Kr.

At that point, as innovative products emerge at scale, costs will come down quickly. The space of low-end machines is also infinitely compressed, so the speed of popularization cannot be underestimated. For example, since the launch of the sweeping and dragging integration of cloud whales, 96.8% of the sweeping robots (including the scrubber) have the function of mopping the floor.

"We believe that the unit price of next year's Q4 washing and dragging is likely to fall below 2,000 yuan, which will not be able to do the annual revenue of 2 billion companies will basically be out." Although 80% of enterprises do not even have the algorithm of the sweeper, the pattern will come so quickly. Another investor told 36Kr.

"Back to the pursuit, its overseas market is easier to shape the brand power, high-speed motors are a technical moat, you can look at Dyson against the benchmark." At a time when the industry is so hot, it is not surprising that investors want to smash the next Coworth by chasing. After all, it runs the fastest, and no one wants to miss it. ”

When you are intensively cultivated

Chang Jing, the founder of "Stone Technology", once said in an internal letter, "The development stage of the enterprise will be divided into 0-1 and 1-N. From 0-1, enterprises only need to find a unique value point to cut into, 1-N stage needs to extend the window period of short-term uniqueness, but also to start laying out long-term unique value, so that the company can be sustainable. ”

In other words, if the test from 0 to 1 is product force innovation, then from 1 to n tests the comprehensive ability of the team, including supply chain integration, design and development, manufacturing, channel distribution and other multi-party games.

The anxiety caused by the back wave lapping on the shore can be seen in the new J2 of the cloud whale and the new G10 of the stone. "The second generation of products does not have the surprise of the first generation, this year's product performance is flat, less innovation, more internal rolling power" and other voices are the industry's evaluation of cloud whale and stone new products this year.

It's easy to make a big hit, but maintaining long-term innovation requires a power motor that is always in power, which is obviously more difficult. The relevant person in charge of "Stone Technology" told 36Kr, "Innovation is a process, not innovation for the sake of innovation, the goal is to solve problems." If it is a start-up, there are not many choices, and when homogenization has no opportunity, it can only innovate, and it can only exit without opportunity. For large companies, the pursuit of product maturity and word of mouth is the first priority", so it seems that innovation will be relatively weak.

Back to the sweeping robot industry, whether from 0-1 or from 1-N, often have to face two choices, one is whether to choose the millet ecological chain, and the other is whether to build a factory.

The impact of xiaomi ecological chain on home appliances is revolutionary, not only the establishment of the Internet of Things ecology, mobile phone / smart speaker terminal is also perfect; there is also business model innovation, in 2021 Q3, IoT has become Xiaomi's second largest source of income, investment in more than 300 IoT ecological chain enterprises, contributing 20.93 billion yuan in revenue.

Therefore, in the early stage of brand building, Xiaomi Chain is like the Whampoa Military Academy of a home appliance brand, which can concentrate more on products and obtain more channel resources, but this will also become a constraint in the later stage.

"Pursuit" and "stone" have successively been de-milletized, and the essence is that this "cost-effective model" and OEM oem limit the ceiling of profits, and will also affect the presence of private brands.

Of course, today, the "famous school" of the Xiaomi ecological chain is also difficult to enter, and in the tracking and observation of the market by 36Kr, there are many sweeper brands that fold when trying to establish contact with Xiaomi.

There are also two ways to choose the factory, one is R & D design and production and manufacturing all do it themselves, and the other is the OEM (original equipment manufacturer) method, that is, "OEM" or "OEM production". The advantage of OEM is that it can save costs at an early stage, and suppliers also bring their own set of professional and mature manufacturing systems.

"Quality manufacturers will have contractual guarantees and will not leak design drawings casually." But what they have is the ability to make, and that ability is replicable. A CEO of a sweeping robot company told 36Kr.

Therefore, whether to build or acquire a factory is also one of the key decisions for branding. "For example, Xiaomi is a case, we think its technology is 1.5 generations slower than Coworth, the main reason is that Xiaomi has handed over more research and development to other manufacturers." A sweeping robot industry researcher told 36Kr.

It can be said that the production and manufacturing capabilities and R & D and design capabilities are almost equal in weight. "A good supply chain and brand relationship should be like Apple and Foxconn," said the researcher, adding that brands need to master the most core production factors and integrate excellent manufacturers to serve themselves.

So, at this stage, where has the sweeping robot industry reached?

It is not a simple division of the product force shaping period or the brand power shaping period, but the overlapping period of 0-1 and 1-N stages. The obvious performance is that brand building is very important, and product strength cannot be let go, but innovation is becoming more and more difficult to find, and it is difficult to pry open the market with another product.

Therefore, everyone wants to do the brand, the relationship between the brand and manufacturing, the brand and the channel also need to be redefined, AI home service robot company "Trifo" founder Zhang Zhe said that the future will definitely belong to the "definer": "If the simple brand side completely adopts the ODM foundry model and participates in the limited product definition, even if it chooses a number of professional factories, it is inevitable that there will be a gap with the brand side that focuses on making boutique home service robots." ”

Manufacturers are also trying to reinvent their roles. "Silver Star Intelligence" calls its model OPM, that is, through the insight of C-end users, it provides more B-end products, and provides more consumer pain point services on this basis. The core of this model is that companies can define the product themselves.

In the future, there may be new explosive products that jump out of the market, but it is becoming more and more difficult to impress consumers. An employee of Yun Whale once recalled the scene of the first product release in 2019 for 36Kr: "At that time, the company put a large screen, you can see that sales are increasing every hour, breaking a thousand units took less than 1 minute, when only 2700 sweeping robots were sold out in 3 hours, and sales exceeded 10 million. ”

Moments of passion like this are hard to come by again.

Strike at the top with all your might

Since they all want to be brands, they also see that the window period of the brand is still there, and they want to seize the dividend when the pattern is undecided.

A number of sweeping robot practitioners also expressed to 36Kr the opportunity point of building a new brand: at present, consumer decisions are still based on category purchases, not brand purchases. Xie Chen, head of the marketing department of "Silver Star Intelligence", shared the results of his consumer research with 36Kr: "Most of the purchase decisions may be based on friends' recommendation, or direct purchase of brands that have been heard of, and some from live streaming with goods... “

In terms of market choice, many companies choose to start from overseas markets, because brand building in overseas markets is better. Wang Zhonglin, CEO of "Jihai Technology", analyzed 36Kr as the reason for better overseas entry is that on the one hand, consumers have different ideas, and European and American consumers will prefer a product to solve a single problem, such as carpet treatment or pet hair treatment, so it is better to do; on the other hand, the supply side competition is smaller, and the profits in overseas markets will be greater, so it is conducive to the entry of start-up companies.

"In addition, competition in overseas markets is far less intense. Because there are no more than three companies that can really penetrate the omni-channel channel in the United States. Everyone competes in a dimension that can be seen, unlike in China, and everyone who can enter can also enter," Wang Zhonglin said.

Wang Weiye, CEO of Xingyun Group, expressed his views on the overseas market on the "pursuit" financing incident: "The Chinese market is a "pile of dead people", all of which are very powerful players. So in the beginning, The Pursuit was very clever in choosing the international market, which is why it was able to come out of the international market. ”

For overseas markets, crowdfunding has played a good role in early adopting. Usually, the company's new products will be pulled through the crowdfunding model, and then the fans on the crowdfunding platform will be rushed to the top of the ranking as a diffusion. After the crowdfunding is completed, the first users will make some replies on the Amazon platform, etc., and these comments may also rush to the forefront of Amazon, and the positive closed loop will be completed from then on.

Overseas brands are easy to do, but the domestic market is bigger. According to Euromonitor and IFR data, China's sweeping robot sales in 2019 were 5.44 million units, followed by the United States (2.75 million units), Japan (630,000 units) and the United Kingdom (160,000 units). It can be seen that the size of China's sweeping robot market accounts for almost half of the world. Therefore, many companies will still put the second battlefield back in China.

In China, it is necessary to comprehensively consider the three dimensions of technology underlying advantages, scale and service.

First of all, the sweeping robot is a high-tech product, so the underlying technology accumulation will be an important moat for enterprises.

An investor told 36Kr that today's sweeping robots need to pay more attention to the Internet of Things and intelligent hardware capabilities than two years ago, "the underlying technology and data are more important moats, and this is also the primary source of stickiness." ”

However, there are still some technologies that need to be broken. For example, how the sweeping robot with the base station integrates with the home environment, how the sweeping robot with the water supply and sewer function is added can really prevent leakage, how to break through the path planning of the three-dimensional space, and so on.

Based on this, a number of sweeping robot companies to 36Kr said, "In recent years, home cleaning is still inseparable from the handheld, Tianke's explosion is also based on this, most of the home cleaning standard during this time should be a combination of 'a sweeper + a handheld'." ”

Secondly, the sweeping robot is not so cool, and its essence is still an appliance for floor cleaning. Then, whether it can really sell goods and whether to form a scale, behind the consideration is assembly production efficiency, delivery speed, cost and customers and other aspects.

Finally, the sweeping robot is also a consumer electronics product, so finding distribution channels and establishing good services may play an exponential growth feedback. For example, "Cloud Whale" believes that it is a lifestyle brand that users love, and at the same time as the sweeper business, it also began to play the detail card, and at the end of November launched the "Cloud Whale Joy" peripheral product.

Which of the above comprehensive capabilities is more important? Zhang Kejia, founder of the sweeping robot company "Wow Li", expressed his views on 36Kr: "A wooden barrel cannot have a particularly strong short board, because when every competition point plays a key role, the short board can often determine the position." ”

There is no doubt that looking backwards at this point in time, a common understanding is that when the stock price of "Stone Technology" in the secondary market exceeds 100 billion, the starting gun of this competition has already sounded, and if you do not build your own brand today, the chance of winning will be less and less.

While the competition is gradually becoming more intense, for the future changes in the pattern of the sweeping robot industry, a researcher predicted: "It will not be like large home appliances all gathered to the head, the pattern will be more scattered." ”

This is just as the countless labels on the sweeping robot show, the charge of shuffling time is getting closer and closer. But "getting consumers to pay is never determined by just one factor. ”