AWE (China Home Appliances & Consumer Electronics Expo) 2024 has come to an end. During the four-day expo, I walked through every booth with my friends from the AWE reporting group of Lei Technology, experienced a large number of new products, interviewed many executives, and participated in many technical exchanges. We found that the new technology trend that has attracted the most attention this year is undoubtedly the combination of AI large models and home appliances, and the most "favored" category is intelligent cleaning, which is still growing rapidly. In the E1 hall where Dreame Technology, Ecovacs, and puppies are gathered, the popularity remains high, and there are always users queuing up to listen to the explanation at the booth of Dreame Technology.
(Dreame Technology Pavilion at AWE 2024)
The trend is clear at a glance: after owning traditional home appliances such as TVs and air ice washers, people are buying at least one smart cleaning device for their families to liberate both sides, and for more and more families, smart cleaning has become a way of life.
Intelligent cleaning has become the top stream of AWE, and the market has accelerated to concentrate on the head
In fact, at AWE 2023, the smart cleaning category has become the top stream in the audience, which is not difficult to understand: clean appliances are the fastest-growing subcategory in the home appliance market in the past three years.
As most families have purchased products and the product life cycle is long, mature home appliances such as TVs, air conditioners, and refrigerators have shown a trend of sluggish growth or even decline. However, under the influence of many factors such as the acceleration of urbanization, the increase in aging/declining families, and the "lazy economy", intelligent cleaning has ushered in a "splashing wealth" and growth against the trend - among them, the two core categories of sweeping robots and floor scrubbers are even more unbeatable and outperforming the market.
According to data from Aowei Cloud Network, the retail sales of China's cleaning appliances market in 2023 will be 34.4 billion yuan, a year-on-year increase of 6.8%, and the growth rate will exceed that of 2022, sweeping robots and floor scrubbers have become the twin engines of growth, of which the retail sales of sweeping robots will be 13.7 billion yuan, a year-on-year increase of 10%, and the retail sales of floor scrubbers will be 12.2 billion yuan, a year-on-year increase of 22%. Vacuum cleaners, one of the "troika", are eating away at the market by floor scrubbers and sweepers, but there is still a place.
(2023 smart cleaning market data, from Aowei cloud network)
In 2024, with the continuous upgrading of smart cleaning products such as floor scrubbers and sweepers, and the further decline in prices, smart cleaning will continue to maintain rapid growth. According to the forecast of Aowei cloud network, in 2024, it is expected that the overall cleaning appliances will be 36.8 billion yuan, a year-on-year increase of 6.9%, and the retail volume will be 27.05 million units, a year-on-year increase of 6.7%, of which the floor scrubber is especially optimistic, this category has only taken three years from 0 to 1 to become a 10 billion market, and the market size is expected to reach about 80 billion in 2030.
(2023 smart cleaning market data, from Aowei cloud network)
Smart cleaning has become a rare growth home appliance, and market competition is becoming increasingly fierce. Taking the fastest-growing floor scrubber category as an example, the number of brands involved in the industry has exceeded 250 in the past three years, and 108 new brands will enter in 2023 alone, while 48 brands will be out. The rapid survival of the fittest has accelerated the market to concentrate on the head, but there are not a few head brands, such as floor scrubber players, in addition to professional intelligent cleaning players such as Dreame Technology and Ecovacs, as well as comprehensive hardware giants such as Midea and Haier, there are also "foreign brands" such as Bisheng and Youli.
Among the many leading players of intelligent cleaning, Dreame Technology is a key player that no one can ignore.
On the one hand, Dreame Technology is the only player with strong two core categories, "floor scrubber" and "sweeper", with a market share of more than 20%, both achieved the achievement of category TOP2, in addition, its vacuum cleaner is also very potential, the troika goes hand in hand, "not biased", this time AWE Dreame Technology's booth display products also have a large number of highlights;
On the other hand, Dreame Technology has grown remarkably among the top brands. According to public information, from 2019 to 2023, Dreame Technology's five-year compound annual growth rate will exceed 100%, of which the business in Dreame Technology's international zone will increase by 120% year-on-year in 2023. In addition, the growth of Dreame Technology is high-quality growth, and it has a strong voice in the high-end price band, and in 2023, it will win the first market share of clean electrical appliances brands with more than 5,000 yuan in China's online market.
(AWE 2024 Dreame Technology Exhibition Area "Clean Challenge Zone", produced by Lei Technology AWE Reporting Group)
Among the many leading intelligent cleaning brands, Dreame Technology, which has achieved strong growth, is a model worth studying, and the outside world is also full of curiosity about its business philosophy and R&D model. At AWE 2024, on behalf of Lei Technology, which focuses on AI hard technology, I conducted an exclusive interview with Guo Renjie, CEO of Dreame Technology China, and got the answer.
There are still many user pain points, and intelligent cleaning innovation seeks common ground while reserving differences
Smart cleaning products iterate very quickly, and today's products are significantly better than they were three or five years ago. The sweeping robot has been extended from "dry cleaning" to a sweeping robot that supports "dry cleaning and wet mopping", which is constantly improving in obstacle avoidance, route planning and cleaning power, and has functions such as automatic water loading and unloading and automatic dust collection in maintenance-free. The floor scrubber, which has only been born for a few years, has also appeared with new functions such as wireless, high-temperature steam washing, automatic water loading and unloading, and self-cleaning of sewage tanks.
However, the rapidly upgraded smart cleaning equipment still does not perfectly meet the needs of household cleaning, and there are still many pain points for users: the corners are difficult to clean, the hair is easy to entangle and difficult to clean, the stubborn stains are difficult to clean, and it is difficult to get different floors/houses/scenes in one step...... At this year's AWE, we were pleased to see that the head brands did not "crazy pile-up" or launched a "parameter arms race", and there was less gunpowder caused by homogeneous competition. The new products exhibited by each brand have come up with "unique skills" and use technological innovation to solve users' cleaning pain points. In terms of the evolution of products and technologies, the head brand "Brothers Climb the Mountain, Work Separately", has brought a large number of memorable innovative products and cleaning solutions to the market.
In terms of product form evolution or core difficulties, the leading brands have chosen a similar direction, but the implementation principles and emphases are different, which I call "seeking common ground while reserving differences".
First of all, the head brands are emphasizing the return to cleaning itself, so that the products continue to improve the "cleaning power", in the final analysis, the idea is to try to make sweeping robots, floor scrubbers and vacuum cleaners "clean to be clean".
For example, in order to solve the industry problem of corner cleaning, the Dreame sweeping robot X20 series released a year ago is the first in the industry to realize the expansion of bionic robotic arm rags, so that the robot can "reach out" to wipe the stains on the corners in narrow areas such as walls, table legs, and beds, and achieve a <0.2cm welt distance without leaving sanitary dead corners. The X40 and S30 series on display at AWE 2024 are equipped with a new generation of bionic "dual" robotic arm technology, which is the first in the industry to realize the expansion of the liftable side brush, and the side brush and the rag can be linked with both arms, achieving almost 100% coverage when cleaning the corners and crevices of the house.
According to Guo Renjie, some products on the market solve the problem of corner cleaning through various schemes, Dreame Technology has tried a variety of solutions such as fuselage shape very early, but the effect is limited, until last year the bionic robotic arm rag expansion function was launched, and this year Dreame Technology has realized the bionic "double" robotic arm on the basis of last year, so that the side brush and the rag can be expanded and support lifting, and then more comprehensively cover narrower corners.
It's not easy to implement a bionic robotic arm. According to Guo Renjie, the first is the structural challenge, the sweeping and mopping robot needs to walk, to avoid obstacles, to clean and self-clean, and the corresponding functional modules have a large number of components, which leads to the internal structure has been very crowded, and the bionic robotic arm needs to be reconstructed. The second is the material challenge, the side brush expands to the wall, which may be broken by the force of the robot, and the solution of Dreame Technology is to apply more flexible and non-fragile materials to protect the robot.
(Dreame Technology's cutting-edge sweeping and mopping flagship X40 series showcased at AWE 2024)
In April last year, after three generations of technology iterations, Dreame Technology has already had the technical achievements of a more mature bionic robotic arm, and launched the bionic "double" robotic arm this year, once again completing the structural reconstruction challenge of the side brush and rag area. For the bionic robotic arm technology, Dreame Technology has also laid out key patents such as "rag expansion structure", "rag lifting" and "swing control" early.
(X40 series equipped with bionic "dual" robotic arms, source Dreame Technology official website)
In addition to the original and leading bionic robotic arm technology, Dreame Technology's innovation in cleaning power is also reflected in many dimensions, such as the Dreame H30 Ultra and H20 Ultra floor scrubbers exhibited at AWE this time, which support the "lying flat" mode, and its body can lie flat to 180° and extend into the bottom of the table, bed, and sofa to solve the problem of cleaning dead corners in low spaces.
Secondly, the leading brands have paid attention to the diversified, multi-scenario and complex cleaning needs of users, and have given corresponding solutions.
Up to now, the smart cleaning products on the market are composed of a "troika": floor scrubbers, sweeping robots and vacuum cleaners, and so far there is no product that can solve all the cleaning needs of a home.
In Guo Renjie's view, floor scrubbers, sweeping robots and vacuum cleaners are very important to residents, "Dreame technology should meet the needs of different cleaning scenarios and different groups of people, for example, like some young people, he may not have children or even live alone, it will be more convenient to use sweeping robots, but once there are pets and children at home, it is difficult to solve all the needs with only one device, such as heavy cleaning such as children spilling rice cannot be completed with traditional vacuum cleaners or sweeping robots." "Therefore, Dreame Technology does not have a priority distinction for different business lines internally, and the company's organizational optimization goal last year is also to require each sector and each business line to develop and grow very quickly, so as to ensure that the three core product lines have products that can be played.
(AWE2024 A corner of the Dreame Technology Exhibition Area)
At the product level, Dreame's solution is "all-in-one", and it has launched a variety of products that support "one machine for multiple purposes" to meet the diverse needs of users as much as possible. For example, the flagship floor scrubber H40 Station on AWE integrates a floor scrubber, a vacuum cleaner, a mite remover, and a casual suction, and adds a base station that can automatically load and unload the water, so that one machine can complete the three-dimensional cleaning of the whole house.
Finally, the leading brands are making a fuss about "maintenance-free", that is, to make the intelligent cleaning equipment work with "zero supervision, zero intervention, and zero after-suffering" as much as possible.
In Guo Renjie's view, Dreame Technology "has been solving one of the core problems, which is the maintenance-free nature of the machine. For smart cleaning products, maintenance-free is the only "two" element that is as important as cleaning power. Today's machines still have a lot of processes that need to be operated by people, and we believe that as long as the product is liberated to the greatest extent, it can logically achieve better results. ”
In order to achieve maintenance-free, Dreame Technology has many creative practices, this time on the AWE core display of Dreame H40 Station one of the major selling points is "maintenance-free", it is equipped with an intelligent cleaning base station, built-in automatic water system, sewage tank self-cleaning system, roller brush self-cleaning system, double active oxygen sterilization system and intelligent control cleaning system five cleaning systems, one-stop solution to the past users need to manually maintain clean water tank, sewage tank, roller brush and cleaning liquid and other tedious work.
（免维护性取得重大突破的追觅H40 Station）
In terms of the specific implementation of intelligent cleaning, Dreame Technology has many ingenuity and uses some unexpected black technologies. For example, the H40 Station is equipped with the 60°C hot water forward and reverse washing roller brush technology pioneered by Dreame Technology, which can better decontaminate and sterilize and solve the problem of oil stains on the roller brush cloth. In order to solve the problem of self-cleaning of the sewage tank of the base station, Dreame Technology has developed a self-cleaning system for the sewage tank, which uses a 720° double rotary spray arm similar to the principle of wipers to eliminate stubborn stains. After the cleaning is completed, Dreame Technology will even use the high-pressure flushing technology of the aviation negative pressure toilet principle to use 8000Pa negative pressure to sweep away the stubborn garbage such as hair and particles attached to the inner wall of the sewage tank.
Use "Seeking Innovation" to break through the trap of medium-sized companies
In January, there was an impressive report "The Medium-sized Trap of Internet Companies", and the Late-Dian team found that the stock prices of Internet "medium-sized" companies, that is, companies operating medium-sized products with DAUs in the range of 10 million to 100 million, generally fell higher than the most representative China Internet Index Fund (KWEB), and their profitability has generally declined in the past three years, and less money can be used for growth, with more than half of the products DAU has stagnated or declined, on the other hand, WeChat, Pinduoduo, Douyin, and Alipay, which have more than 100 million DAUs, are growing in users.
(Source: Late Finance "The Medium-sized Trap of Internet Companies")
Every industry of the company to a certain stage of development, may face a medium-scale trap, this is an economic concept: when the company develops to a certain scale, on the one hand, it has not yet established a "too big to fail" market position, but has not played a scale economy effect, its flexible advantages as a small company are gradually disappearing, in a "no sky, no land" suspension state and dangerous situation, which brings about the phenomenon of decline in core competitiveness and business performance.
Dreame Technology and all its peers are facing such a trap: the scale of the leading company of intelligent cleaning is large enough, but the market competition is still fierce, the current intelligent cleaning track is not yet highly concentrated, and the scale effect has not yet been formed, but compared with the newer small team, the medium-sized company will have a natural "gravity" to hinder innovation.
Because of this, players on the intelligent cleaning track have faced an impossible triangle: improving efficiency, high-end, and increasing market share, which cannot be both. It is difficult to achieve both high-end and market share, and it is often necessary to move towards high-end and increase market share, and to bear the corresponding sunk costs, which will erode corporate profit margins.
Founded in 1990, iRobot can be called the originator of intelligent cleaning, and it is getting worse and worse under the group of future generations. In January of this year, as the 16-month-long Amazon-iRobot merger failed, iRobot announced a 31% layoff of its workforce and the departure of the company's CEO, Colin Angle. In China, the cake of traditional vacuum cleaners and the head brands of sweeping robots is also being divided by the chaser.
In 2023, Dreame Technology will take the lead in breaking the impossible triangle of the industry, accounting for 22.5% of China's major cleaning category in October of that year (Gfk Zhongyikang data). In addition, in the German and Italian markets, the market share of Dreame sweeping robots has topped the list since October, and the market share of high-end sweeping robots in many markets has reached 40%-50%, or even more, while reducing costs and improving quality and efficiency of the whole industry chain. The key to Dreame Technology's breakthrough lies in sticking to its unique innovative concept.
First of all, we should insist on saturation R&D investment to ensure that the innovation "arsenal" has equipment available.
Dreame Technology reinvests in technology R&D investment, and saturates key technologies to ensure that there is a killer technology.
At present, 60% of Dreame Technology employees are product R&D technicians, and the annual R&D investment accounts for about 7%, leading the industry. As of March 2024, Dreame has applied for a total of 4,275 patents worldwide, and has obtained a total of 2,345 authorized patents.
Dreame Technology is well-known in the industry for its high-speed digital motor technology, and "high-speed digital motor" is one of the key cornerstone technologies that support all of its businesses. According to Guo Renjie, Dreame Technology's high-speed digital motor has achieved mass production of 160,000 rpm, production of 180,000 rpm, and reserve of 200,000 rpm, ranking among the international leading level, which provides the most basic guarantee for the strong cleaning power of Dreame Technology's intelligent cleaning products. Another core technology of Dreame Technology is intelligent algorithms, which have been applied in navigation and positioning, route planning, obstacle avoidance, dirt recognition, scene recognition, environmental perception, human-computer interaction and other fields.
In Dreame's technical system, high-speed digital motors and intelligent algorithms play the roles of "heart" and "brain" respectively, driving the continuous evolution of Dreame's products.
Secondly, insist on listening to the voice of users and avoid the formal innovation of "holding a hammer to find a nail".
According to Guo Renjie, Dreame Technology adheres to two points in innovation, one is to invest in technology research and development without hesitation, and the other is that innovation must let "the technical side listen to the voice of consumers":
"We pay more attention to guiding technological innovation based on user insights,For example, the bionic robotic arm mounted on the Dreame sweeping robotX40 and S30,In fact, it all stems from the insight into the pain points of the cleaning robot users' attention to the corner coverage,The home environment of professional users may be more complicated,There are a lot of tables, chairs and benches,When the sweeping robot can only continue to avoid obstacles,The final cleaning area is very limited,It may only be 50%,So Dreame Technology launched a bionic robotic arm to improve cleaning coverage。 ”
From the perspective of products, Dreame Technology is indeed constantly aware of the pain points of users when cleaning, and gives better solutions. For example, in response to the subtle problem of "the roller brush oil is not easy to clean", the single self-cleaning rate is 100% through the 60°C hot water forward and reverse washing roller brush technology.
Aware of the real needs of users and using technology to solve problems, rather than using technology for the sake of using technology, this is an inseparable part of Dreame's scientific and technological innovation concept.
Secondly, create an innovative environment and a unique R&D mechanism to ensure the implementation of "bold innovation".
There is a saying in the culture of Dreame Technology called "bold innovation", for enterprises to innovate (successful innovation) is often a kind of accident, Dreame Technology through culture, system, process, etc. to create an innovative environment, to ensure that there is still enough flexibility after the scale continues to grow, the sense of smell is keen, so that successful innovation becomes a certainty.
In Guo Renjie's view, Dreame Technology has always emphasized that it is necessary to start from consumer needs to do product innovation, in order to ensure this, Dreame Technology will respect consumers in the whole chain, so that users can gain insight into the whole link and participate in every link of the product.
"Our user insight team is part of the larger R&D system, and there will be user insights in the product definition stage. To solve the same problem, such as corner cleaning, there are dozens of technical path options, in addition to the bionic robotic arm and flexible rags, in this process we will introduce user insights for users to make the final choice. After the product comes out, the prototype will be given to some users to try out, and then further iterate. For example, if the robotic arm is normally extended, users feel that it is unsightly and easy to break, and our products are adaptively telescopic, and only when the corners are recognized. ”
Finally, a "positive flywheel" is formed to escort innovation through top-level strategies.
Real innovation is inseparable from huge resource investment: to do basic technology research and development and reserves, a lot of investment in a short period of time has no returns; to do technical route selection and practice, some technical routes may be dead ends, there are sunk costs; to be the first to eat crabs, the first to do trial and error and bear the cost, and then pick up ready-made, so the innovation is also likely to become martyrs. It is precisely because of this that in the hardware industry, we will find that mobile phone brands with small profits and quick sales may have a high market share, but it is difficult to have their own innovation, because there is no profit to invest in research and development, and they cannot afford the huge sunk cost of innovation.
Dreame Technology's saturated R&D investment and bold innovation are not a source of water. In the product line, Dreame Technology focuses on floor scrubbers, sweeping robots, vacuum cleaners and high-speed hair dryers, and its product strategy is to cover the price segment but base itself on the high-end. Cutting-edge technology will be on the high-end first, and then continue to be devolved into more price segments. However, there is an inevitable problem: SKUs/SPUs are constantly expanding, R&D investment is increasing, and profits can be eroded. However, judging from the performance in 2023, Dreame Technology has achieved full-link cost reduction of products.
How does Dreame Technology do it? The trick, in Guo Renjie's words:
"Dreame Technology has formed a normal flywheel, that is, we maintain high R&D investment, so we have developed the best technology and the best products, and have been recognized in the high-end market, ensuring profit margins, and then ensuring high R&D investment, which is a very important positive flywheel. ”
"Once it becomes reversed, this thing will become very scary, for example, our R&D investment is low, the product is average, it sells very cheaply, the profit is low or even loses money, there must be less money to do R&D, the technology is worse, the product is worse, it can only be sold cheaper, this is a reverse flywheel. ”
Therefore, Dreame Technology must maintain a positive cycle, good technology, good products, good price, in order to invest in research and development, to have the confidence to boldly innovate, to do the best technology, to continue to give consumers the best products. ”
Judging from the market share of Dreame Technology in the price segment of 5000+ sweeping robots in 2023 exceeding 50%, Dreame Technology's voice in the high-end market is indeed enough. At the end of 2023, Dreame Technology launched the 8999 yuan fully embedded ultra-thin water and water space master series sweeping robot with a highly innovative form. When technological innovation translates into a "real fragrance" experience, users are willing to pay for it and pay a corresponding brand premium.
In fact, in my opinion, making the best products, using the best price, and making the greatest profits is exactly the idea of Apple and Tesla. Apple took 90% of the market's profits, and used the profits to invest in underlying technologies such as A-series chips and iOS, so as to bring mobile phones with a better comprehensive experience and continue to win its target users. In 2023, Apple will sit on the throne of the No. 1 mobile phone sales for the first time. In the field of consumer electronics, Apple still has the right to speak. Of course, a good price does not mean that it is expensive, the key to a good price is the "pricing power", Apple and Tesla all have the pricing power in their respective fields, and they can "hit low" at any time to do sinking, which will make it difficult for followers who lack technical reserves and innovation capabilities to parry.
Through its unique innovative ideas and methodology, Dreame has successfully avoided the trap of "medium-sized enterprises" and taken the lead in breaking the "impossible triangle" in the intelligent cleaning industry. Looking further, there are still many opportunities for Dreame Technology.
The Sea of Stars: Conquer the world with technological innovation
Intelligent cleaning is the core "base camp" business of Dreame Technology, but it is not all.
At AWE 2024, Dreame Pocket high-speed styling hair dryer P10 has become a popular product in the audience, with its foldable design, while maintaining the strong wind power of the high-speed hair dryer, the volume and weight are greatly reduced, easy to carry, and can also be turned into a curling iron after folding, realizing the three-in-one of blowing, curling and straightening.
(Image source: Produced by Lei Technology, about the Dreame P10 evaluation, you can move to Lei Technology for more details)
Dreame Technology took the lead in launching a foldable high-speed hair dryer, in addition to achieving a breakthrough in hinge and structure, the key lies in the high-speed digital motor technology, the unique structure requires the digital motor to be placed behind the hair dryer, if it is not small enough and light, it will directly affect the user's use, and the high-speed digital motor of Dreame Technology can output the same large wind speed and speed in a smaller volume and lighter weight.
High-speed digital motors and intelligent algorithms can drive smart cleaning devices and hair dryers, so theoretically, Dreame can be involved in many fields. In addition to electric toothbrushes, there are also water purification equipment, washing machines, refrigerators, fresh air systems, etc., in short, as long as the household appliances that need to be driven by a motor, theoretically speaking, they are the "X" of Dreame Technology. However, Dreame Technology is currently very cautious about expanding its category, according to Guo Renjie, "we must use technology to make the best products before we can make a category", which is the company's red line.
Looking to the future, the growth space of Dreame Technology is still very vast.
1. At the product level, with the outbreak of intelligent cleaning, the "brain" of Dreame Technology's "intelligent algorithm" will be more useful.
At AWE 2024, AI home appliances have become another hot concept after AI mobile phones and AI PCs, among which the intelligent cleaning track is regarded as a natural scenario for large-scale model technology. Deep learning technology is strong in perception, and large model technology can understand and simulate the real world, just like the ability of the videos created by Sora to demonstrate. Therefore, when large-scale model technology allows robots to understand and simulate the house environment and the whole world, its working logic may be refactored.
Guo Renjie said that the first step of large-scale model technology will make the voice interaction between the robot vacuum vacuum and humans more convenient, for example, users can ask it to "sweep the kitchen well" - now it cannot understand such complex instructions. In addition, large models in the cloud can also improve the training efficiency of intelligent algorithms, such as better identifying objects in the environment. Look further,The sweeping robot will become the intelligent hub of the home,Its camera is also a moving eye,It can be used to take care of the elderly、Care for pets、Intelligent security and other scenarios,These will be broader application scenarios of intelligent algorithms。
Therefore, in the combination of large model technology and intelligent cleaning products, Dreame Technology is bound to become one of the key players in the new round of competition for intelligent cleaning appliances.
2. At the market level, the penetration rate of clean household appliances in the domestic market is still not high enough, and Dreame will play a key role in promoting intelligent cleaning equipment into thousands of households. In the broader global market, Dreame Technology also has a good performance, and in Germany, Italy and other markets, Dreame sweeping robots have won the first place and are all "high in volume and price".
In the era of exploration of the globalization of science and technology consumption, Dreame Technology represents a new force: unlike some brands that have relied on "high quality and low price" to enter the global market in previous years, Dreame Technology has made better innovative products based on technological innovation in R&D investment, supported the brand through technological leadership and product breakthroughs, and then won the recognition of global consumers, and the competitors of technology consumer brands in the global market have gradually established advantages.
In the wave of globalization of home appliances, we look forward to seeing more pursuits emerge.