Written by | Cao Shuangtao
Edit | Yang Yong
题图 | IC Photo
In 2023, Roborock will deliver a financial report to the market to increase revenue and profits.
According to the financial report, Roborock's total revenue in 2023 will increase by 30.55% year-on-year to 8.654 billion yuan. The net profit attributable to the parent company increased by 73.32% year-on-year to 2.051 billion yuan.
Among them, from 2020 to 2022, Roborock's revenue growth rate will be 7.74%, 28.84%, and 13.56% respectively. In the same period, the growth rate of net profit attributable to the parent company was 74.92%, 2.41% and -15.62% respectively. In other words, Roborock's growth rate in 2023 will be the highest growth rate in the past four years, and the growth rate of net profit attributable to the parent company will be the highest growth rate in the past three years.
The high growth of revenue may be related to Roborock's active layout of overseas business. In 2023, Roborock's domestic and international revenue growth rates will be 41.01% and 21.42% to RMB4.41 billion and RMB4.22 billion, respectively, and domestic and international revenues will account for 50.97% and 48.87% of total revenue, respectively.
As a comparison, although Ecovacs International's revenue in 2022 will be 5.186 billion yuan, it will only account for 33.84% of Ecovacs' total revenue that year. And the net profit margin of 44.65% in the international market is also 10.53% lower than the net profit margin of 55.18% in the domestic market.
Due to the basic market of Ecovacs, in 2023, the involution of sweeping robots in exchange for volume will gradually intensify, and Ecovacs' revenue and profit will be impacted. Ecovacs early warning financial report said that it is expected to achieve a net profit attributable to the owners of the parent company of 600 million yuan to 680 million yuan in 2023, a year-on-year decrease of 59.96%-64.67%.
The huge difference in performance has caused Roborock's share price to continue to rise in the secondary market, and Ecovacs' share price to continue to decline. Taking April 6 as an example, the closing price of Ecovacs was 33.99 yuan per share, which has fallen 86.5% compared with the highest value of 251.86 yuan per share in July 2021.
Source: Xueqiu (Roborock)
Source: Snowball (Stone Ecovacs)
However, behind Roborock's high-growth financial report, the domestic sweeping robot market continues to exchange price for volume, overseas market competition intensifies, Roborock "self-waste innovation", and the status quo that new categories are difficult to break through, and whether Roborock can continue to maintain high growth is also full of challenges.
1. How does Roborock recreate "stone"?
Whether it is a major appliance represented by Midea and Gree, or a sweeping robot represented by Roborock and Ecovacs, or an online major appliance platform such as Suning Tesco, Gome, and JD.com, the rise and development are all driven by the growth of the penetration rate of a certain category of household appliances driven by the dividends of the times. The dividends of the times here are either the increase in the purchasing power of national consumption, or technological changes.
For example, in the eighties and nineties of the last century, the national consumption power increased, the policy of household appliances going to the countryside at the beginning of this century, and the emergence of new air conditioning technologies laid the competitive pattern of Midea and Gree in the white goods industry. In the same way, "Roborock" benefited from the rise of the domestic lazy economy that year, as well as the maturity of technologies including AI and sensors, and the penetration rate of sweeping robots has also increased.
Source: Zheshang Securities
While the penetration rate of a certain household appliance category increases, the impact on manufacturers is diverse. Take the three major white goods with relatively fast penetration rate as an example:
First, driven by the benefits brought by sales growth, manufacturers can quickly build a dense sales network system across the country. In the early years, although Gree required channel providers to pay cash in stock, channel providers were still happy to do it, and there were countless channel dealers who got rich by selling Gree air conditioners. Throughout the process, Gree has also built a complete offline channel network from high-tier cities to township markets.
Source: Caixin Securities
Second, the improvement of sales channels not only feeds back the sales of home appliance enterprises, but also provides more possibilities for home appliance enterprises to reduce prices. While the price reduction has led to an increase in the penetration rate, it has also driven a large number of small and medium-sized manufacturers out of the market, and the market share has become more and more concentrated.
Taking the air-conditioning industry as an example, relevant data show that from 2001 to 2006, before the price war in the air-conditioning industry, the number of enterprises was 400+, CR3 was 30%, and the average price of the industry was 3,000 yuan. After the price war, the number of enterprises dropped to 30, CR3 was 56%, and the average industry price was 2,110 yuan.
Third, in the process of increasing the penetration rate, consumers' demand for a certain category of household appliances is becoming more and more rigid, diversified and upgraded. While manufacturers meet consumer needs through technological upgrades, the penetration rate of household appliances in this category continues to grow.
For example, before 2009, fixed-frequency air conditioners were generally used in the industry, mainly to meet the needs of users for adjusting indoor temperature. In 2009, the emergence of inverter air conditioning met the needs of social and economic benefits of high efficiency and energy saving. Compared with fixed-frequency air conditioners, inverter air conditioners are faster, more energy-efficient and durable. With the application and popularization of inverter technology, the domestic air-conditioning industry has hit a new high in sales both at home and abroad.
Source: Western Securities
However, unlike the three white goods that complete the above development path with rigid demand, the rigid demand of sweeping robots is not good. Especially in the domestic sinking market, this situation is particularly prominent.
Li Hailong, the owner of an electricity store in Linquan County, Anhui Province, told DoNews that rural homes like ours have courtyards. Some family courtyards have large areas, complex internal structures, and a lot of dust, which is not what sweeping robots are good at.
Although this will not be the case in the commercial housing in the county, the sweeping robots that start from three or four thousand at every turn make the middle-aged and elderly consumers in the county feel that it is unnecessary to spend this money. Previously, the sweeping robot of a certain brand in the store was not sold for ten months, and in the end it could only be sent out by doing activities, and now peers dare not buy it easily.
As Li Hailong said, judging from the fan portraits of Roborock's official Douyin flagship store, the overall population is dominated by people aged 24-40 in high-tier cities. It can't sink, can't expand more age groups, and can't attract more offline home appliance channel providers, which restricts the expansion of the market size of sweeping robots.
Relevant data show that in 2021, the domestic sweeping robot market size will be 20.1 billion yuan, and the market size of the whole industry is not as large as the revenue of a single enterprise of Midea's air conditioning and consumer appliances.
Source: Daduoduo
Source: Midea's financial report
The limited market size is also restricting the development of Roborock. On the one hand, whether it is the self-built offline channels in high-tier cities that need to bear the rent and labor costs at the same time, or the online channels that need to bear the high investment costs, the high pit fees of the top anchors, and the promotion costs and product promotion costs of KOL evaluation bloggers, etc., all of which continue to increase the sales cost of Roborock.
From 2022 to 2023, the year-on-year growth rates of Roborock's sales expenses will be 40.48% and 37.85% respectively, although the growth rate has slowed down. However, from 619 million yuan in 2020 to 1.817 billion yuan in 2023, sales expenses are still increasing exponentially. Considering the current exhaustion of Internet traffic, the continuous decline in ROI of online advertising, and the intensification of competition among manufacturers, this cost may continue to rise in the future.
Source: Roborock's financial report
On the other hand, although Roborock has extended its product line to the field of washing machines, the cumulative sales of washing machines in the official flagship store of Douyin in the past 90 days are only 15 units, and the sales volume is quite dismal. Roborock's 2023 financial report shows that the sales revenue of other smart electrical appliances is 550 million yuan, accounting for only 6.4% of Roborock's total revenue that year.
Source: Daduoduo
Behind the difficulty of new categories to contribute revenue, on the one hand, traditional major offline channel providers rely on years of experience and have a large number of offline customer resources in their hands.
Even in the sinking market, some home appliance channel providers give consumers a real price lower than the brand's self-operated flagship store and Jingdong price based on comprehensive factors such as favor and face. This kind of stable sales channel, not to mention Roborock, even Supor and Joyoung are difficult to break through.
On the other hand, unlike air fryers and omelette machines, small household appliances, the hard technology products of sweeping robots determine that manufacturers can only invest more R&D expenses in order to continue to maintain the comprehensive competitiveness of products. The development of Roborock, Ecovacs, Dreame, Cloud Whale and other enterprises is in line with this logic, which means that enterprises need to continue to invest in R&D every year.
From 2022 to 2023, Roborock's R&D expenses will be 488 million yuan and 619 million yuan respectively. In order to maintain the competitive advantage of sweeping robots, as well as the balance of multiple businesses of enterprises, the R&D expenses that can be invested in new products are actually limited, not to mention the formation of technical crushing of traditional giants such as Midea and Gree in major electrical appliances such as washing machines and air conditioners.
And how to make the second "stone" will also become a difficulty for Roborock in 2024.
Source: Roborock's financial report
Second, the sweeping robot exchanges price for quantity, and Roborock innovates itself
In 2023, the revenue of sweeping robots and accessories will still account for 93.43% of Roborock, which is the company's revenue pillar, and Roborock needs to face the increasingly involuted sweeping robot market in the future.
Whether it's a robot vacuum, a smartphone, or other consumer electronics. Because product technology iteration itself is cyclical and there is an upper limit in technology theory, when the product passes the stage of rapid development of supply and demand, and the core pain points are solved, product innovation will start from large technology iteration to micro-innovation or functional compounding, and the product value brought by innovation will decrease marginally.
At that time, the wait-and-see sentiment of consumers will rise, the decision-making cycle will continue to be extended, and the growth rate of the industry market will continue to slow down.
Source: Aowei Cloud Network
Compared with smartphones, two-wheeled electric vehicles, chemicals, major appliances and many other industries, the stock market game is a common way for enterprises to gain market share.
And whether it is Stone and Ecovacs as a listed company or other sweeping robot manufacturers, they all need to hand over sustainable growth financial reports to the primary and secondary capital markets, tell the new growth story of sweeping robots, and then ensure that the stock price is stable, and the investors behind it will not reduce their holdings and cash out, which means that the war between price and volume of sweeping robots will be more intense.
Behind Roborock's contrarian growth in the domestic market in 2023, it is actually the result of exchanging price for volume. So far in 2023, Roborock has successively launched a variety of sweeping robots in different price ranges, such as G20, P10, and G10SPURE. In contrast, Ecovacs, Cloud Whale, and Dreame are all controlling the speed of new products to market.
Multi-price bands and multi-SKUs, coupled with Roborock's invitation to Xiao Zhan to endorse last year, may be able to drive Roborock's growth in a short period of time. For example, from June to July last year, because other manufacturers did not launch products with a price of 3,000 yuan, Roborock relied on this price band products, and its sales increased by 30% year-on-year.
However, technology products are not fast-moving consumer goods after all, and multi-price and multi-SKU products will make it difficult for consumers to leave strong mental barriers to a certain product, and Roborock will also face a lot of pressure to create more explosive products in the future. Taking Roborock's official flagship store on Douyin as an example, many new products have sold less than 100 units in the past 90 days.
Source: Daduoduo
Focusing on new SKUs and sales, in addition to causing Roborock to not keep up with after-sales. For example, some investors in the stock bar said that Roborock neglected the after-sales maintenance services for old customers. On the black cat complaint, some consumers said that Roborock's two maintenance failures are still there, and the Roborock sweeping robot that has been used for less than 12 days has leaked twice.
Source: Stock bar
Source: Black Cat Complaint
At a deeper level, Roborock's sales expenses have been higher than R&D expenses in the past four years, which has not only seriously slowed down the pace of Roborock's product innovation, but has even been repeatedly caught in the turmoil of plagiarizing the patents of competitors.
Source: Roborock's financial report
For example, Guo Renjie, deputy general manager of Dreame Technology China, said in the circle of friends that friends "take it away without saying hello" to Dreame's self-developed and pioneering bionic robotic arm technology. Combined with the accompanying pictures, it can be determined that the "friend businessman" is Roborock.
Source: Interface News
According to relevant media reports, Roborock imitated Ecovacs' dual-disc mop solution, hot water washing, and AI voice assistant.
Last year, Roborock's main stone molecular sieve washing and drying machine H1 claimed to have adopted the third drying technology - molecular sieve low-temperature drying technology. However, some professionals said that Bosch, Siemens and other famous international home appliance brands have long launched dishwashers that use the same principle as this technology, but with different names such as crystal bud drying and zeolite drying technology.
Whether Roborock can continue to maintain a 25% market share in the domestic market under the gradual loss of core competitiveness due to self-waste innovation, I am afraid it is still debatable here.
Source: Aowei Cloud Network
Third, the intensification of overseas competition, how to maintain the advantage of stone?
Behind the negative plagiarism of technology, it may be related to Roborock's high-level decision-making. 3C major appliances and all kinds of small household appliances, if you want to break through in the highly competitive market, the founder's focus on products is one of the factors that cannot be obtained. In the early years, the stone, the Naimbo, and now the cloud whale, the usmile smile plus can be confirmed from the side.
However, Chang Jing, the founder of Roborock, has not only reduced his holdings and cashed out, but has also focused on "building cars". And last year, Roborock launched its first model, Polar Stone 01. However, the delivery volume of Polar Stone 01 was dismal after its launch, and the delivery volume was less than 1,000 units in many months.
Source: Pacific Automotive Network
Even for a big Internet manufacturer like Xiaomi, Xiaomi SU7 won nearly 90,000 orders within 24 hours of its launch. However, the existence of practical problems such as the increasingly serious price war and technology war in the new energy vehicle industry, the continuous extension of the consumer car purchase cycle, and the serious shortage of production capacity make Xiaomi SU7 face many challenges if it wants to continue to write a high-growth story.
Not to mention that Roborock, which is inferior to Xiaomi in terms of capital, channels, technology, and talents, it is still debatable how much revenue Polestone 01 can add to Roborock in the future.
When Changjing entrusts more management to the senior management, Roborock is also facing new pressure on how to continue to maintain growth overseas. As a relatively early sweeping robot manufacturer in overseas markets, Roborock does have many advantages in overseas markets.
For example, on Amazon's official website, 83% of the more than 1,000 consumers who gave 5-star reviews for the Stone Q8Max series products said that the product works well, is easy to set up, and does a very good job.
Source: Amazon's official website
However, the performance of some Roborock products is not good, which may affect Roborock's overseas sales. For example, the stone Q5Pro+, which costs $699 on the Amazon platform, 3,737 consumers only gave a score of 3.6 for the performance of this series of products in terms of deep cleaning.
Source: Amazon's official website
Statista data shows that from 2024 to 2025, the global shipments of sweeping robots will be 19.63 million and 22.1 million units, respectively, and the growth rate of the industry has slowed down.
Source: Statista
The story of exchanging price for volume in the domestic sweeping robot market is also staged overseas. For example, on the Amazon platform, a variety of sweeping robots are sold at a price reduction of $20 to $70, and Serene Life has pulled the price of sweeping robots to below $80. How to deal with the increasingly tragic price war overseas and how to truly improve product strength is another major test for Roborock.
Source: Amazon's official website
Source: Amazon's official website
Epilogue:
Invest 6.7 billion yuan in R&D a year, not only to maintain competitiveness in the domestic market, but also to make technical differences for overseas consumers, and constantly gain insight into the needs of overseas consumers. How will Roborock tell a new "innovation story" to the market in the future? Perhaps Roborock really needs to stop the bloody car-making business and work its main business.