The “star product” sold 2.81 million units annually, and was a big hit both domestically and internationally.

As a benchmark company in the smart home industry , the rise of Roborock Technology is not a flash in the pan. After years of development, Roborock Technology has firmly ranked first in the industry in terms of market share, own brand, R&D innovation, etc. However, in the increasingly competitive market of the smart home industry, the company's performance is inevitably under pressure.

The “ star product ” sold 2.81 million units a year, but the net profit fell for the first time in five years

Recently, Beijing Stone Century Technology Co., Ltd. (hereinafter referred to as "Stone Technology"), the company that owns Roborock, the big brand of Amazon's sweeping robot , released its 2021 financial report. Overall, the revenue grew significantly, but the net profit showed an "unexpected" decline.

Stone Technology's main business is the design, development, production (through commissioned processing) and sales of smart hardware such as smart cleaning robots . Its main products include smart sweeping robots, handheld vacuum cleaners, commercial cleaning robots , etc., and it focuses on high-cost-effective products overseas. On Amazon, it has many top-ranked best-selling items, most of which are priced between US$300 and US$600.

According to the financial report data, Stone Technology 's operating income in 2021 reached 5.837 billion yuan, a year-on-year increase of 28.84%, and the total profit reached 1.598 billion yuan, a year-on-year increase of 2.67%. The net profit attributable to the parent company's owners was 1.402 billion yuan, a year-on-year increase of 2.41%, and the net profit attributable to the shareholders of the listed company after deducting non-recurring gains and losses was 1.19 billion yuan, a year-on-year decrease of 1.47%. Compared with the growing revenue data, Stone Technology's net profit has ushered in the first decline in nearly five years, which is surprising.

As for the reason, Stone Technology stated in its financial report that the growth in operating income led to a simultaneous increase in operating costs. At the same time, the increase in unit costs caused by rising raw material prices led to a significant increase in the company's overall operating costs for smart hardware. The difference in changes in gross profit margins of domestic and foreign products was mainly due to the decrease in the proportion of low-gross-profit Mi products in China.

However, with huge R&D investment and strong sales capabilities, Roborock Technology's profitability remains strong. As the company 's "star product", the smart sweeping machine has been well received as soon as it was launched due to its innovative product functions, and the market feedback has been positive. "Freeing your hands, good news for lazy people" has also become a label for buyers for this product.

In 2021, Roborock's smart sweeping robots once again hit their peak, with total sales exceeding 2.81 million units, a year-on-year increase of 18.25%, and sales revenue reaching 5.605 billion yuan. According to statistics, as of now, Roborock's cumulative sales of sweeping robots have exceeded 10 million, reaching 10.87 million units.

In addition to this product , Roborock's other main product , handheld cleaning products, although not as good as smart sweeping robots in terms of overall sales, has a significantly higher growth rate than smart sweeping robots (about 37% higher). In 2021, the annual sales volume was 124,000 units, driving the growth in sales. After its new smart sweeping and mopping robot G10 and T7S series sweeping robots were launched in 2021, their market performance was also impressive.

The above products of Stone Technology are very popular in Europe, America and Southeast Asia. However, compared with other similar companies, Stone Technology did not choose to rely solely on overseas markets. In 2021, the company's domestic revenue was 2.473 billion yuan, and overseas market revenue was 3.364 billion yuan, accounting for 42.37% and 57.63% respectively. The market division is even, and the revenue of both remains stable.

The smart home industry where Roborock is located has become a hot track since 2017. In 2021, the industry will continue to maintain a high-speed growth mode. In addition, product updates, strong strength of established sellers, and changes in market demand have intensified competition again.

But looking at the development path of Stone Technology, it still has strong competitiveness and advantages in the market.

From OEM to own brand, Stone Technology has achieved success both at home and abroad

Stone Technology was founded in 2014 and received investment from Xiaomi in the early stage of its establishment. It initially started out by relying on Xiaomi's OEM. In 2016, it joined the Xiaomi ecosystem. With the support of huge traffic, its revenue exceeded the 1 billion mark in just one year. Since then, its performance has been rising all the way. It was listed on the Science and Technology Innovation Board in February 2020.

It started as a Xiaomi OEM, but Roborock Technology has more ambitions than that. Thanks to the reputation of Mijia Robot, Roborock Technology began to recruit talents and focus on the development of its own brand. The core technical personnel are technical experts from Microsoft, Huawei, Intel and other companies with many years of R&D experience.

Based on the first generation of sweeping robots developed for Mijia, the "Stone" sweeping robot added a mopping function. The first batch of 4,500 units were sold out in less than four hours. After taking off the Xiaomi brand coat, Stone Technology opened up the market with its own name.

Along the way, in 2021, the revenue of Stone Technology's own brand has exceeded 5.7 billion yuan, accounting for 98.80%, and market recognition has gradually increased. Since then, Stone Technology has actively explored the international market, selling on e-commerce platforms such as Amazon and offline channels, achieving both international and domestic success.

In recent years, with the increasingly fierce competition in the smart cleaning robot industry, not only large companies have intensified their market competition, such as Ecovacs and Xiaomi in the domestic market, but also brands such as iRobot and Anker's home furnishing brand eufy on the overseas Amazon platform , and small and medium-sized companies are also constantly joining this industry.

Although there are many brands of sweeping machines in the domestic and foreign markets, the low-end market products are highly homogenized, and the mid-to-high-end market brands and products are relatively scarce. For this reason, Roborock Technology has positioned its product functions in the high-end field, and its pricing has a certain price advantage over iRobot, Ecovacs and other products, which has opened up the situation for gaining market share.

Moreover, intelligent products are updated quickly. In order to promote the company's brand awareness and enhance its market position, Roborock Technology needs to continue to work hard on product research and development. As of 2021, Roborock Technology has 555 R&D personnel and 270 new domestic and foreign authorized patents.

In the field of technology, the core of Stone Technology is the industry-leading laser scanning ranging radar, which has the advantages of wide ranging, fast speed and high precision. At the same time, the structure is waterproof and dustproof, resistant to ambient light interference, and can adapt to various indoor and outdoor environmental scenes. Coupled with multi-sensor fusion technology and current positioning system, Stone Technology's sweeping robot is more in line with consumer needs in all aspects.

In addition, Stone Technology has independently developed a dedicated app that allows users to smoothly access information and data statistics on the entire operation of the cleaning robot, and helps users use and manage it more conveniently through multiple functions.

The company's R&D advantages and its precise grasp of the market are indispensable factors in its success. Along the way, it has contributed to the overseas expansion of Chinese brands and has become a guide for many entrepreneurs. The road to success for big sellers is always similar, and its experience is also worth learning from for small and medium-sized sellers.

Stone Technology

2021 Financial Report