How did Ecovacs lose to Stone?

On the outside of the surface

2024-06-19 22:02Posted on the official account of Hubei Table

This article is from: Outside the Surface, Author: Zhang Ranran, Xie Fangchen, Editor: Fu Xiaoling, Cao Binling

The speed of the change of sweeping robots has taken only 3 years from years to months.

On the basis of the rapidly changing territory, Ecovacs and Roborock have established their own cities, vividly staging a history of industrial evolution.

In 2021, the world's first "all-round base station" will bring the sweeping robot industry into a new era, and also push Ecovacs' online market share to 43% and offline market share to 86%, adding the most prosperous fire to the birth of "ten baggers".

Qian Cheng, the post-90s CEO who took over Ecovacs from his father, has since had the confidence to control the overall situation, freed up more hands to make window cleaning robots and stir-fry robots, and a diversified business kingdom is rising.

At that time, Rock Technology, which also came up with a new technology for mopping up, had a much dimmer light, after all, small repairs and small repairs were always worse than the subversive innovation of the "all-round base station".

But the ups and downs of fate and the change of dynasties are often hidden in these small but interesting footnotes.

Since then, the sweeping robot industry, the technical window period has become shorter and shorter, and in the performance iteration that is faster and faster, it is like an accelerator.

The stone that kept capturing new technologies, did not miss any small waves, and became the one who had the last laugh (for now) - at the 2023Q3 performance meeting, the management calmly said that "this year's pattern has been decided, and friends will come again next year".

Ecovacs, which takes "leading the next round of innovation in the industry" as its own responsibility, began to admit in this year's conference call that it had encountered a "product crisis".

This article restores the process of Ecovacs losing to stone step by step, and finds a truth: for industries with imperfect product performance, the degree of spirituality of evolution determines the rise and fall of an enterprise.

1. Bet on the logic of "big innovation" and miss the "micro innovation" dividend

In the second half of 2022, when the sales volume of the sweeping robot industry fell collectively, Ecovacs took the lead in firing the first shot of price reduction, from 618 to Double Eleven, the average price of fist products such as X1 and T10 has dropped by more than 20%.

According to the management of Ecovacs: "I believe that the whole industry is thinking about whether there are other ways to stimulate sales in the sweeper industry in addition to price reduction, but there is no clear answer yet." ”

Under the pressure of the leading boss to cut prices, brands such as Stone, Xiaomi, Dreame, and Cloud Whale had to follow suit and pinch their wallets to make profits.

However, as shown in the figure, Ecovacs, which has the largest price reduction, has seen its online market share decline instead of increasing, while the market share of "pick-and-search" manufacturers such as Stone has increased.

The reason for the failure of Ecovacs abacus is to know by looking through consumer reviews: although the sweeping robot has done a good job in recent years, the cleaning time is too long, the base station cannot be found to manually "collect the corpse", and the complaints such as obstacles cannot be avoided are still plastered all over the Internet.

To put it bluntly,Sweeping robot products on the market,In the eyes of consumers,None of them are "satisfactory",Compared with low prices,They expect more"Truly free your hands。

Looking at the industry, sweeping robots are also in the "early adopter" stage - as of 2023, the penetration rate of domestic sweeping robots is only 6.1%, which also means that consumers pay attention to product performance, far more than price power.

In this context, products that can really poke at the pain points of consumers can be favored.

Ecovacs used to be a leader in this area, and its all-round base station product launched in 2021 has completely transformed the sweeping robot from an "ancestor" that needs to be cleaned by people to an intimate "nanny" - it integrates automatic dust collection, mop cleaning, water replenishment, sterilization, and drying, and can complete cleaning work independently.

Under the temptation of "once the sweeper is put away, the home can be completely renewed", Ecovacs X1 equipped with full base station has sold 100,000 units in just 2 months after its launch. After that, it went all the way up, driving Ecovacs' online share to increase significantly.

Then, just like the iPhone opened the valve of the smartphone market, the sweeping robot has also entered the era of all-round base stations, the proportion of online sales of related products continues to increase, the price of sweeping robots "rises all boats", and Ecovacs' profits and stock prices also reached the highest peak at that time.

The rise of stone also confirms this: following Ecovacs' automatic mop washing technology, the online market share has increased by 8.5%; The launch of G10S, which benchmarks all base stations, has further increased the online market share.

Well versed in the power of technological iteration, Ecovacs and Stone attach great importance to innovation, but they have taken different paths.

Ecovacs, which has eaten the biggest cake in the replacement of the all-round base station, has insisted on "disruptive" innovation since then, and has repeatedly emphasized that it must "hold back its big moves":

April 2022 exchange meeting: From the perspective of the entire industry, there is no perfect robot, and these imperfections are the problems that technology needs to overcome and solve. From our point of view, there are still many different products, and there are still many directions.

2022H1 performance exchange meeting: X1 will be followed by X2, X3, and there will also be navigation, obstacle avoidance, and base stations, but the performance form will be different.

As a result, Ecovacs has focused its R&D efforts on the innovation of square machines - the square system needs to be redesigned from hardware to software, but it can cover all corners and corners to greatly improve cleaning efficiency.

However, the X2 square sweeper launched by its "two years of concentration" has exploded into a big cold. As shown in the figure below, during the 2023 Double 11 period, X2's online sales volume did not enter the top five of the rankings.

The reason why this is the case is that corner cleaning is not uncommon - X2A year before its launch, Cloud WhaleJ3 achieved close to the wall and corner cleaning by adding the "twist the buttocks" function; Dreame's X30 series, which is equipped with a bionic robotic arm, also compresses the welt cleaning distance to less than 2mm.

The selling point of the big innovation was subverted, and the X2 certainly didn't make much of a splash.

When Ecovacs concentrated its resources on building X2, Stone and a group of rookies flew up, breaking the headaches of consumers and eating the market through "micro-innovation".

For example, the mop lifting technology launched by Stone in 2021 can "automatically identify the carpet and avoid getting wet", helping Stone expand its online market share from 10% to 18%; After Dreame launched its bionic robotic arm last year, its online market share has also increased from about 8% to 18%.

Not only that, but the speed at which they "copy homework" from each other is getting faster and faster, it took 1 year and 2 months to follow up the mop lifting technology of the stone, and it only took 4 months for the stone to follow up the bionic robotic arm of the dreame.

On the other hand, Ecovacs, focusing on big innovative products, seems lackluster in chasing new products: the mop lifting technology in 2021 will only be added in 2023; Bionic robotic arms, etc., are also the last to enter.

This is also the crux of Ecovacs' great sincerity in price concessions, but it does not really open the hearts of consumers.

That is to say, at the stage when sweeper consumption is still "experience is king", the stones have used the method of "following + micro-innovation" to win over consumers; However, Ecovacs's consistent breakthrough innovation route underestimates the difficulty of technological changes to a certain extent.

This not only affected Ecovacs' performance in China, but also brought trouble to its overseas expansion.

Second, Ecovacs jumped into the "comfort zone" and overturned the table

People who often watch American dramas will find that almost all of the protagonists' homes are carpeted, and some even don't let go of the stairs and kitchens.

This is not a screen image need, but a projection of real habits. Most houses in the United States are wooden structures and single-family buildings, and carpeting is not only cheaper than hard floors, but also has the effect of sound insulation and warmth.

It can be seen that 50% of American households use carpets (only 20% in China), and 80% of the area in the apartment is covered by carpets or furniture.

But as we all know, carpets are easier to hide dirt and dirt, coupled with the fact that there are more pet families in Europe and the United States, cats and dogs use excrement to "paint" on the carpet, and parkour in the indoor yard makes it a nightmare to take care of the carpet.

In the cleaning strategy shared by a YouTuber, it is necessary to vacuum every day; The whole should be washed once every three months to six months. That's not all, the floor other than the carpet needs to be mopped an extra time.

As a result, they are actually more eager to "free their hands" than at home. However, the strong demand is met with "barren" products.

Unlike domestic sweeping robot manufacturers, iRobot is almost the dominant player in the U.S. market: its market share remains at about 80% all year round.

Sitting on a monopoly position, it lacks some sense of urgency to launch new products. It can be seen that when the smoke of innovation is pervasive in China, iRobot releases a new product every two years on average.

Under the dominance of such a rhythm, for a long time, iRobot's mainstream sweeping robots were separated from sweeping and mopping, and most of them did not have a self-cleaning function - the garbage in the dust box of the sweeper needed to be cleaned manually; The mopping cloth of the mopping machine needs to be cleaned by yourself.

It wasn't until 2022 that the integrated robot for sweeping and mopping was really launched, which can work without two machines, but the rag still has to be washed by itself.

The American people, who have no choice, can only embrace these "imperfect" products.

It can be seen that as of 2022, more than 80% of Amazon's sweeper products in the United States have an average price of less than $300.

But their thirst for a better experience never stopped.

According to a survey of young couples in the United States, 68% of households said they "need to spend more time off relaxing and entertaining rather than cleaning, and are willing to spend more money on smart homes." ”

However, in the face of such a "propositional composition", Ecovacs and the stone who went to sea gave different solutions when they entered.

Ecovacs believes (2020 semi-annual report exchange meeting): the U.S. market is mainly driven by low-end products, and there is no trend of channels vigorously promoting high-end products.

Under this guidance, Ecovacs chose to enter the North American market in the form of "iRobot substitution" and volume price.

The data shows that in 2021, the 5 best-selling sweeping robots of Ecovacs on Amazon in the United States are all within $500, and the most sold one is only $140.

Instead of being rigid in their comfort zone, it is better to find another way - to launch the S7 MaxV Ultra full base station product in North America in 2022, introducing the self-cleaning function to overseas markets.

Different choices have made the routes of the two companies differentiated.

Aiming at the high-end positioning, the two products that Stone has introduced to the United States have filled up the domestic technology as soon as they come up. Among them, the "mop lifting" function just hits the pain point of the carpet and makes the self-cleaning smooth landing.

In the case of the S7 MaxV Ultra, for example, the mop can be lifted by about 4 mm, which can not only mop uncovered floors, but also pass through carpet areas to avoid wetting carpets (except for plush carpets).

This time led to a revolution in the market. For example, iRobot's Roomba Combo j7+, launched in mid-2022, also does not wet the carpet – when approaching the carpet, the mop arm will lift the wet pad to the top of the robot.

On the other hand, Ecovacs, which "follows the strategy", still insists on "hand-to-hand combat" in North America when it fully rolls out all base station products in China in 2022 - the July 2022 minutes mentioned: Europe and the United States do not have such a rigid demand for automatic washing rags as China, and we will also promote products without base stations in the European and American markets.

Later, in the same period as Stone, the full base station models exported to overseas were also affected by the backwardness of domestic pursuit of new products, and did not have the function of "mopping and lifting".

Not only that, in terms of ability tests such as resistance to hair entanglement, clogging, and sucking carpet debris, Ecovacs' products for Europe and the United States are also weaker than similar products of domestic counterparts.

Under the different performance of products, the brand awareness gap has been widened. As shown in the figure below, on Amazon in the United States, Stone has the highest product rating, and Ecovacs has a lot of room for improvement.

At the same time, Stone bypassed traditional advertising and found a group of technology "enthusiasts" with huge traffic through social media, directly reaching users online and detonating word of mouth.

Pictured below, a 21-minute video produced by YouTuber Linus Tech Tips for the S7 MaxV Ultra has received 2.26 million views.

In contrast, Ecovacs is giving priority to promotion in mainstream media, television, and mail in European and American marketing circles, and is still "competing on the same stage" with iRobot.

Along the way, Stone is "like a fish in water" in North America: as of March 2024, Stone Meiya has surpassed iRobot in market share to reach the top.

At the 2023 results exchange meeting, the management talked about the contribution of overseas markets, and decided not to mention North America.

brief summary

Liu De, co-founder of Xiaomi, once put forward a concept: "The product must have 'tomorrow attributes', so that once the user uses it, he can never go back and can no longer do without." ”

After continuous innovation, adjustment and evolution, the mobile phone category can no longer be put down and inseparable with the irreplaceability of the "third hand". Today's sweeping robot industry is obviously taking such a script.

This determines that before it becomes a "rigid need" of users, the clockwork of innovation must be tightened all the time, otherwise it will be like Guo Renjie, vice president of Dreame, said: "Once the new innovative technology is followed a little slowly, the first or two generations of products cannot keep up with the mainstream of the industry, and they will fall behind." ”

View original image 41K

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

•