Edit | Yuer Lake
Produced by | Chaoqi Network "Yu See Column"
In the past 2023, the global economy has picked up and consumption has been upgraded. In the track of smart life home appliances, what is invisible is the quiet change in the demand of the consumer market, and what can be seen is that the head smart life home appliance enterprises represented by Suzhou Ecovacs Robot E-commerce Co., Ltd. (hereinafter referred to as Ecovacs) have gradually entered a period of rapid growth in performance.
In 2023, Ecovacs' total revenue will still maintain steady growth, with a revenue scale of more than 15 billion yuan and a market share of about 40% of sweeping robot products, ranking firmly in the leading position in the industry. In the first quarter of 2024, Ecovacs has delivered a brilliant report card of both revenue and net profit, and net profit and non-net profit have even increased by 3-8 times from the previous quarter, with an astonishing increase.
It is observed that the growth of Ecovacs' overall performance is due to the technology behind the company, as well as the dual-brand strategy of Ecovacs and Timco, which bet on the popular track of sweeping robots and sweepers respectively.
According to the financial report data, in the first quarter of 2024, the performance growth rate of the two brands under Ecovacs is very impressive. Among them, the shipment of Ecovacs all-round base station products increased by 68.6%, while the shipment of Timco floor scrubber increased by 25.4%. The continuous growth of product sales is inseparable from Ecovacs' deep cultivation in the international and domestic markets, as well as the two-way layout of online and offline channels. In the first quarter, its overseas revenue also performed well, which can be said to be on a par with the domestic business.
The performance growth data of Q1 is enough to prove that as Ecovacs' dual-brand products become more and more popular in the market, its brand power, product power and core technology have released huge commercial value. Behind this, there is also the performance growth logic driven by Ecovacs' innovative technology and products.
Profit doubled, fist products consolidated "performance chassis"
As we all know, in the past few years, on the track of smart life home appliances, major technology companies have flocked to catch up, and the market pattern has been changing. Fortunately, in the new era of "masters", Ecovacs has a deep insight into the changes in the consumer market, and quickly adjusts its business strategy in 2024, firmly focusing on core categories, while increasing its product portfolio and layout, and has achieved initial results.
In 2024, on the basis of the new development strategy, Ecovacs will achieve a very large overall business scale and achieve rapid growth in core performance indicators such as revenue and net profit. The correctness of its new development strategy has also been verified by the market.
According to Ecovacs' financial report for the first quarter of 2024, during the period, Ecovacs achieved operating income of 3.474 billion yuan, a year-on-year increase of 7.35%, while its net profit increased by 3449.73% quarter-on-quarter, and non-net profit increased by 847.72% quarter-on-quarter.
Source: Ecovacs financial report data collation
It is observed that the substantial improvement of Ecovacs' core performance indicators is due to the gradual heating up of the domestic and international consumer markets on the one hand, and on the other hand, with the gradual intensification of industry competition, the main price segment of sweeping robot products has sunk significantly.
For example, in the domestic market, the overall trend of the industry is obvious. According to Aowei cloud network data, in 2023, the cumulative sales of the domestic sweeper robot market will increase by 5.37% year-on-year, and the market size of floor scrubbers will increase by 14.16% year-on-year. As a leading brand in the industry, Ecovacs is naturally the first to show the potential for performance growth, driven by consumer demand.
At the same time, in terms of product prices, with the mainstream price band of the sweeping robot market, gradually staying in the range of 3500-4000 yuan, the price of Ecovacs' all-round products has also dropped in an all-round way, and the average online retail price has dropped from 4520 yuan in the previous year to 4073 yuan;
It is worth noting that when Ecovacs' cost-effective advantage was further highlighted, the market competitiveness of its products was further strengthened, which also brought a "bumper harvest" in sales. Taking the T30 product released in the first quarter of 2024 as an example, according to Ecovacs' official WeChat data, the Ecovacs T30 family has sold more than 50,000 units through e-commerce channels within 15 days of its launch. In March 2024, in the 3000-4000 price segment of the domestic market, Ecovacs sweeping robots accounted for 48.5%.
Source: Ecovacs' official Weibo
In terms of market share, according to the data of Aowei Cloud Network, Ecovacs brand sweeping robots and Timco brand floor scrubbers still rank first in the industry. Moreover, subdivided into the online and offline markets, its industry position is still unmatched.
For the overall performance of Ecovacs, well-known domestic brokerage institutions also expressed a positive attitude and recognized it. For example, on February 2, 2024, Yao Wei, a researcher at Zhongtai Securities, released a research report on Ecovacs, "23 Years Forecast Review: Coming Days Can Be Chased, Looking Forward to 24 Years of Recovery", which gave a "buy" rating to Ecovacs. According to the statistics of Securities Star, in addition to Zhongtai Securities, nearly 10 institutions have given it a "buy" rating in the past 90 days, which shows the market's confidence in Ecovacs.
Technology-driven deepening of the moat, and the layout of the whole industrial chain has set an industry benchmark
In the track of smart life household appliances, no one will deny the assertion that science and technology are the primary productive forces. As a technology-intensive enterprise, Ecovacs has also deepened its scientific and technological background because of its continuous increase in technology research and development.
At the same time, Ecovacs also focuses on scientific and technological products, continuously expands its product line upstream and downstream, improves its industrial ecological chain, and injects vitality into the development of the entire industry while enhancing the competitiveness of its own brand.
First of all, in terms of the layout of the industrial chain, Ecovacs does not "take a corner of the road", but only develops, produces and sells all-round products such as sweeping robots and floor scrubbers, but simultaneously lays out the upstream and downstream ecology.
It is understood that at present, Ecovacs is constantly deepening its layout in the industrial chain composed of core components such as high-precision lidar, motor products, plastic products, and lithium battery products, and gradually improving its industrial ecology.
Through technical breakthroughs, Ecovacs is also further deepening its "technical background" and making its competitive barriers more unbreakable. Taking the T30 series products that were crazy to be robbed on the market as an example, the fundamental reason why this kind of products are popular in the market is that it directly points to the pain points of consumers' demand for welt cleaning and hair winding treatment with a number of innovative technologies such as spirit gap and spirit winding. Other new products such as X2 combo, X2S, and X5 PRO are also extremely competitive in the corresponding price segment.
Source: Ecovacs official website
In addition, according to this year's market pattern, the Timco brand has also launched new products such as the intelligent floor scrubber Stretch Mix and the intelligent cooking machine Shiwan 3.0CE, which are also well received by consumers. Some consumers even commented: "I want all the floor scrubbing and vacuuming, and the Timco Stretch Mix floor scrubber is the ceiling of the flat floor."
It can be seen that Ecovacs' new development strategy of full price segment and multi-category layout, as well as the good results achieved, have received positive feedback from the market.
Secondly, as a solid backing for Ecovacs to lay out the upstream and downstream industrial chains, scientific and technological innovation and technology iteration are also the magic weapons for Ecovacs to form an industry leader for a long time.
With the implementation of various incentive policies advocated by the state to accelerate the development of new quality productivity, Ecovacs has also shown the confidence and confidence of domestic science and technology enterprises in the development strategy of product innovation and brand independence.
Take its "spending a lot of money" R&D investment as an example. According to the financial report data, Ecovacs has continued to increase its technology research and development in recent years. According to its 2023 financial report data, Ecovacs' annual R&D expenditure was 877 million yuan, a year-on-year increase of 17.87%. In addition, 683 new patent applications were filed, of which 336 were invention patents. As of the end of the reporting period, a total of 2,072 patents were authorized, including 700 invention patents.
Source: Ecovacs official data
It is precisely with such a huge investment that Ecovacs has rich technical reserves in new sensors, large language models, new robot structures, etc. Moreover, these new technologies are gradually being applied to Ecovacs' products.
For example, with the blessing of AI technology, Ecovacs DEEBOT X2 series has AI intelligent hosting, which will actively recommend the most suitable cleaning method according to different room types, floor materials and other data. It is foreseeable that with the advent of the new technology boom of AI large models, the technical level of Ecovacs has also been upgraded again, and the product application of artificial intelligence technology will be further deepened.
Thirdly, in terms of market and channel layout, Ecovacs has also embraced the wave of economic globalization, expanded from the domestic market to overseas markets, and moved towards the sea of stars in the smart life home appliance market in terms of market layout.
In terms of landing, Ecovacs has made a balanced effort through online and offline channels, so that its performance in domestic and overseas markets is also very stable.
For example, in the overseas market, Ecovacs has met the needs of overseas users with new categories and functions, and in 2023, Ecovacs Group's overseas revenue will account for more than 40%, and its market revenue will increase by 25.76% year-on-year. In addition, the overseas revenue of Ecovacs brand and Timco brand increased by 20.1% and 40.5% year-on-year respectively.
According to reports, at present, domestic service robots and intelligent floor scrubber products have a significant competitive advantage in overseas markets, which is not only reflected in the cost performance, but also in terms of functional technology.
Moreover, the overseas price of the product is higher than the domestic price, so the company can obtain higher profits, and the overseas market performance of Ecovacs and other manufacturers last year was better than the domestic market. Therefore, in overseas markets with broader market prospects, Ecovacs also has greater imagination.
It is worth mentioning that when the development of domestic e-commerce and cross-border e-commerce is in full swing, Ecovacs has also laid the foundation for the formation of its business ecology based on global channel layout in terms of online and offline channel layout.
For example, according to the data of Aowei cloud network, in January and February this year, Ecovacs ranked first in the online retail share of sweeping robots, and in February, Ecovacs maintained the first fault with an online market share of 68.18%. In overseas markets, Ecovacs is also developing both online and offline channels, and is showing scale effects.
epilogue
Because you stand taller, you can see farther. As a leader in the smart life home appliance industry, Ecovacs has been carrying out forward-looking layout and multi-dimensional balanced development in terms of technology, products and channels. Therefore, it has also been able to maintain its own product innovation and brand competitiveness in the fierce market competition. And in the ever-changing market pattern, it has always been in a leading position.
Therefore, we have reason to believe that behind the "good start" of Ecovacs in the first quarter of 2024, there is a set of rigorous logic that allows its performance to grow sustainably. We look forward to the "model students" of the smart life home appliance track to set a benchmark for the development of the entire industry chain in 2024 and bring more surprises. At the same time, it can also inject confidence and vitality into the entire industry to resume rapid growth.