Written by | ZHANG Yu
Edit | Yang Bocheng
Title map | IC Photo
For a long time, boss appliances have almost played a dominant role in the kitchen appliance industry, but in the past few years, the kitchen appliance industry has faced unprecedented severe challenges, and how to leverage a new round of performance growth by exploring the diversification and new direction of kitchen appliances has become an important topic for boss appliances.
Recently, BOSS APPLIANCES held the "AI Cooking @ Future" digital kitchen appliance technology new product launch conference, focusing on AI upgrading and innovation, and launched an integrated solution for the digital intelligence supervision and governance of catering fumes and a number of new digital kitchen appliances. It is worth mentioning that the boss digital kitchen appliance has also completed a comprehensive improvement in four major areas in the software system, and the upgraded AI cooking assistant ROKI is more intelligent, and the communication mode, speech recognition ability, real-time response speed and retrieval information ability have been significantly improved, which can meet the diverse needs of users more quickly and accurately.
Source: Boss Appliances
It is not difficult to find that the boss appliance focuses on the cooking scene and has carried out a lot of layout and exploration in category expansion, user management, and digital transformation.
However, it cannot be ignored that the kitchen is different from other home spaces, cooking behavior is often difficult to be completely replaced by digitalization, intelligence, and digital kitchen appliances cover software, hardware and other aspects of technical reserves, which leads to the transformation and upgrading of kitchen appliances under the wave of digitalization There are not a few kitchen appliance companies, but few truly achieve digitalization. In the kitchen appliance market that is caught in the stock competition, can the boss appliance tell the story of digital kitchen appliances? With the help of digital kitchen appliances, can boss appliances tear open the breakthrough of industry change?
First, the performance picks up, can it return to high growth?
In the first half of 2023, the performance of BOSS APPLIANCES returned to growth, and its total revenue was 4.935 billion yuan, a year-on-year increase of 11.04%; The net profit was 830 million yuan, a year-on-year increase of 14.67%.
Source: Boss Electric Financial Report
The recovery of the performance of boss appliances is inseparable from two reasons.
First of all, at the macro level, with the gradual landing of the national macroeconomic policy, the prosperity of the real estate industry has rebounded in an orderly manner, thanks to the implementation of the "guaranteed handover building" policy, the completed area of commercial housing is 246.036 million square meters, an increase of 18.5% year-on-year, and it is expected that 2023 will become a big year for market delivery. The kitchen appliance industry, which is deeply bound to it, has shown a moderate rebound as a whole. According to the monthly data report of Ovei's offline retail market monitoring, the retail sales of range hoods and gas stoves in the main categories of kitchen appliances increased by 7.6% and 2.2% compared with the same period last year. According to the monthly data report of Ovi's online retail market monitoring, the retail sales of kitchen appliance packages increased by 14.6% compared with the same period last year.
Specifically, data from Oviyun.com shows that in the first half of 2023, the total retail sales of kitchen and bathroom appliances (smoke, stove, disinfection, washing, embedded, collection, electricity, combustion and net) were 78.9 billion yuan, a year-on-year increase of 3.8%. As a category of just needed kitchen appliances, smokers, stoves and water heaters, its market scale has also returned to growth, Oviyun data shows that in the first half of 2023, the total retail sales of kitchen appliances just need categories will be 46.8 billion yuan, a year-on-year increase of 4.2%.
Secondly, at the micro level, the main products of boss appliances have increased significantly. According to the business composition, the products of boss appliances are mainly divided into three categories, the first category is smoke stove consumption products represented by range hoods and gas stoves; The second category is the electrified cooking product group represented by the steaming and baking machine, steamer and oven; The third category refers to the group of water kitchen electrical products represented by dishwashers, gas water heaters and water purifiers. In addition, it also includes integrated product groups represented by integrated stoves, integrated range hoods, etc., as well as refrigerators and other categories.
Among them, range hoods and gas stoves are the first and second main products respectively, and the combined revenue of the two accounts for about seventy percent of the total revenue of boss appliances. In the first half of 2023, the main products of BOSS Electric achieved a good growth trend, such as the revenue of range hoods of 2.325 billion yuan, a year-on-year increase of 12.09%; The revenue of gas stoves was 1.183 billion yuan, a year-on-year increase of 11.9%. In addition, although dishwashers and integrated stoves did not reach the main echelon of total revenue, the growth rate was very impressive, with revenues of 332 million yuan and 205 million yuan, respectively, a year-on-year increase of 34.28% and 41.19%.
Despite the recovery in performance, unfortunately, it is difficult for BOSS APPLIANCES to return to the high-growth development track.
From 2017 to 2022, the total revenue of BOSS APPLIANCES was 7.017 billion yuan, 7.425 billion yuan, 7.761 billion yuan, 8.129 billion yuan, 10.148 billion yuan and 10.272 billion yuan, with a year-on-year growth rate of 21.10%, 5.81%, 4.52%, 4.74%, 24.84% and 1.22% respectively. It is not difficult to find that the boss appliance has entered a low-growth stage since 2018, and during the same period, the gross profit margin has fallen from 53.68% to 49.98%, a decrease of 3.7 percentage points, which means that the profitability has been declining.
In addition, Oviyun.com data shows that the market size of kitchen appliances has decreased from 186.3 billion yuan in 2018 to 158.6 billion yuan in 2022, and comprehensive brands have increased their investment in the kitchen appliance market and the addition of Internet brands, resulting in intensified market competition. In this industry environment, it is difficult for boss appliances to return to a high-growth track.
Second, is the integrated stove the second growth curve?
To maintain the growth of revenue of boss appliances, there are two main ways: one is to expand the market share of the main products, but from the perspective of the existing market share of boss appliances, this way is not easy to go through; The second is to actively look for the second growth curve, according to the financial report for the first half of 2023, the integrated stove is the most promising to support the second growth curve.
According to the financial report, in the first half of 2023, the revenue of integrated stoves was 205 million yuan, a year-on-year increase of 41.19%, and the growth rate far exceeded that of range hoods and gas stoves. In 2022, the revenue of integrated stoves increased by 17.92% year-on-year, which is a good performance compared to other categories.
Source: Boss Electric Financial Report
According to data from Oviyun.com, the market size of integrated stoves in 2022 will be 25.9 billion yuan, which exceeds that of gas stoves, second only to range hoods (market size of 29.6 billion yuan), and is expected to exceed 30 billion yuan in 2023.
Integrated stove is a kind of range hood, gas stove, disinfection cabinet, storage cabinet and other functions in one of the kitchen appliances, boss appliances CMO Ye Danpeng said that at present to support the performance growth of boss appliances two plates, namely the basic plate based on traditional kitchen appliances such as smoke stove consumption, and the growth plate dominated by emerging products such as dishwashers and integrated stoves, "At present, the basic plate is still the basis of our revenue contribution, but the growth report has great expectations." ”
However, it cannot be ignored that in the field of integrated stoves, the boss appliance has lagged behind competitors due to its late start.
As early as 2021, whether it is the online market or the offline market, the market share of Martians is ranked first, its online market share is 23.35%, the offline market share is 21.32%, in the online market, Yitian Intelligent and Zhejiang Meida ranked second and third, and in the offline market, Zhejiang Meida and Midea Group took the second and third places, as the head enterprise in the kitchen appliance industry, the boss appliance has become a "catch-up" in the field of integrated stoves.
Although the integrated stove is the most promising to become the second growth curve of the boss appliance, it is difficult to become a new growth point at this stage due to the late entry. From 2020 to 2022, the integrated stove revenue of the boss appliance was 259 million yuan, 326 million yuan and 385 million yuan, accounting for 3.19%, 3.22% and 3.75% of the total revenue, respectively, and in the first half of 2023, the proportion of integrated stove revenue to the total revenue increased to 4.15%, and the contribution income was still very limited.
In addition, the integrated stove market is also facing a situation of stalling growth, Oviyun.com data shows that in the first half of 2023, the retail sales of the mainland integrated stove market was 1.34 million units, down 1.3% year-on-year; Retail sales were RMB12.4 billion, down 0.4% year-on-year, and the market as a whole declined. At the same time, the operating performance of listed companies with integrated stoves has not met expectations. In the first half of 2023, the total revenue of Martian was 1.023 billion yuan, a year-on-year increase of 0.05%; The total revenue of Zhejiang Meida was 772 million yuan, down 7.17% year-on-year; The total revenue of Yitian Co., Ltd. was 616 million yuan, a year-on-year increase of 1.09%; The total revenue of Shuaifeng Electric was 454 million yuan, a slight decrease of 0.95% year-on-year.
It can be seen that there are still many uncertainties in whether the integrated stove can become the second growth curve of the boss appliance.
Third, the difficult transformation of digital kitchen appliances
Intelligence and digitalization have become the industry consensus and unavoidable development direction. Ye Danpeng revealed that since the launch of the intelligent cooking system ROKI in 2014, the boss appliance has taken digitalization as one of the company's strategic directions.
In August 2022, BOSS APPLIANCES officially launched a new digital cooking product line brand "ROKI", and at the same time, the first ROKI digital kitchen appliance "Creator i1" new product was also unveiled at the same time. In the solution proposed by the boss appliance, digital kitchen appliances use technology to solve the user's cooking problem, reduce the cooking threshold, and stimulate the user's cooking enthusiasm.
From traditional kitchen appliances to digital kitchen appliances, it means that the entire industrial chain is opened, from upstream ingredients, condiments, fresh cold chain, cooking hardware equipment, software operating systems, cleaning appliances, kitchen waste treatment and other ecological chains, can be connected in series through the ROKI digital cooking system, opening up the upside of the entire kitchen economy.
However, the transformation of digital kitchen appliances is not easy, and there are two major difficulties: first, compared with watching TV, using refrigerators, turning on air conditioners, washing clothes and other behaviors, the cooking line is much more complicated, so the whole process of cooking requires both the automation of kitchen appliances and the active participation of people, and the human-computer interaction process is more complicated; Second, cooking behavior often requires the use of multiple kitchen appliances, so there are high requirements for the coordinated linkage of multiple items.
This means that the boss appliance not only has to work the cooking hardware equipment, but also opens up the software operating system, which also means that the R & D investment of the boss appliance is put forward higher.
Past financial reports show that from 2017 to 2022, the R&D expense rates of BOSS APPLIANCES are 3.32%, 3.95%, 3.85%, 3.73%, 3.61% and 3.82%, respectively, which have been below 4%. In the first half of 2023, the R&D expense rate of BOSS APPLIANCES still did not exceed 4%, only 3.50%.
For boss appliances, digital kitchen appliances do open up a new path for the industry to explore new directions, so that kitchen appliances companies are expected to break away from the basic plate of traditional kitchen appliances and can go to a broader space, but in the first half of 2023 financial report of boss appliances, the revenue of digital kitchen appliances has not been disclosed, and in terms of the current R&D investment of boss appliances, whether digital kitchen appliances are boss appliances innovate for innovation, or can really bring practical benefits, everything is still unknown.