Net profit increased more than 5 times in half a year, Shenzhen made a lot of money from selling big

As more and more consumers recognize the value of machines replacing human labor and freeing hands, the global market demand for smart home service products represented by sweeping robots is growing increasingly strong, which in turn has driven the revenue and net profit growth of a number of cross-border small home appliance sellers.

Ecovacs's half-year net profit increased more than five times

The smart small appliance market, which was in high demand in 2020, is still hot this year. As a big seller of smart small appliances, Ecovacs has also achieved remarkable results. According to the report data, in the first half of 2021, Ecovacs' operating income was 5.359 billion yuan , an increase of 123.11% compared with 2.402 billion yuan in the same period of 2020. Its net profit attributable to listed shareholders was 850 million yuan, an increase of 543.25% compared with 132 million yuan in the same period of 2020, which is more than 5 times.

The reason for the profitability is closely related to the significant growth in operating income of the two self-owned brands, Ecovacs brand household service robots and "Tineco" smart home appliances.

Among them, the company's sales revenue of Ecovacs brand service robots was 2.612 billion yuan , accounting for 48.74% of the total revenue, up 69.92% from the same period last year. Overseas business revenue increased by 134.8% year-on-year , accounting for 31.0% of self-revenue. In addition, in the second quarter of 2021, Ecovacs brand sweeping robots had a retail share of 21.9% in the global (excluding North America) market, ranking first , and also entered the 2021 Kantar BrandZTM China Top 50 Global Brands list for four consecutive years .

Tineco brand achieved sales revenue of 2.037 billion yuan , accounting for 38.01% of total revenue , an increase of 817.02% over the same period last year. Overseas business revenue increased by 452.8% year-on-year, accounting for 34.6% of self-revenue. It is worth noting that after just two years, Tineco has grown into an important part of the company's revenue, accounting for nearly 40%, opening up a new growth area and space for the company on the basis of its original service robot business.

As a smart home appliance brand established in 1998, Ecovacs has multiple independent brands. Among them, its "Ecovacs" brand household service robots and "Tineco" brand smart life appliances are sold on foreign B2C and e-commerce platforms, and have good consumer reputation and performance abroad.

In addition, its cleaning appliance OEM/ODM business should not be underestimated, as it serves internationally renowned cleaning appliance brands, with revenue of 544.7 million yuan in the first half of 2021, accounting for 10.16% of total revenue. Judging from the above data, Ecovacs is undoubtedly growing rapidly in this traffic outlet for smart home appliances.

Smart innovation category ushered in a new trend, and many big sellers achieved remarkable results

This year seems to be a new traffic outlet for smart innovative products. The North American real estate market has developed rapidly, and consumers have chosen to shop online due to the epidemic. As a result, many sellers who have been deeply engaged in smart innovative products have made a lot of money. In comparison, some have tasted the sweetness, while others have achieved remarkable results.

Like the well-known 3C big seller Anker Innovations , in the first half of 2021, the smart innovation category products were not only its fastest-growing brand in recent years, but also its fastest-growing category in the first half of the year, with revenue growth reaching 68.29% to 726 million yuan.

The performance forecast of Morning North Technology, which focuses on smart home appliances , shows that its net profit in the first half of 2021 increased by 35%-50% compared with the same period last year, and the increase in sales of its own brands Levoit and Cosori was an important reason for the increase in its net profit.

The performance forecast of JS Global Life, a big seller of small household appliances , shows that its comprehensive profit in the first half of this year is expected to be no less than US$205 million, which is equivalent to doubling the US$106.7 million in the same period of 2020. It is estimated that its Amazon cleaning appliance brand Shark has contributed a lot of its revenue.

Judging from the revenue data of many big sellers, products in the smart innovation category are undoubtedly a new outlet for traffic. Many sellers who mainly operate in other categories also want to support this market and get a piece of the pie. Some sellers have already begun to expand their business categories to smart innovation, but for sellers, the core competitiveness of the product cannot be ignored.

Whether it is their own R&D capabilities or the core selling points of their products, if sellers want to survive for a long time, it is best to avoid the path of homogenization. While insisting on focusing on consumers, they should improve their own competitiveness and establish their own advantages and characteristics in order to go further in the cross-border circle.

Ecovacs' successful approach is worth learning from

Despite the emergence of various situations in the cross-border circle in the first half of this year, Ecovacs was able to achieve such excellent results. It makes people wonder what exactly has enabled it to develop so rapidly?

Gain insights into user habits and solve user pain points. Internet data shows that different markets have different demands for products. For example, for users in the US market, keeping pets and carpet decoration are their hobbies, but cleaning has become their pain point. Ecovacs has launched a tangle-free sweeping robot in a targeted manner and accurately positioned consumers to increase the conversion rate of online purchases.

Globalization and multi-category layout. We have established a business network covering major global markets with the United States, Germany and Japan as the core, built online and offline sales channels, and our continuous brand investment has been recognized by consumers. In addition to continuous investment in the sweeping robot category, Ecovacs is also committed to the horizontal development of the category, increasing product technology research and development and market promotion of the air purification robot Qinbao and the window cleaning robot Chuangbao, and building a service robot product ecological matrix.

Increase investment in R&D expenditure and increase the proportion of self-owned brands. In the first half of 2021 alone , Ecovacs' R&D expenditure reached 202 million yuan, an increase of 45.84% over the same period last year. Its self-owned brand business accounted for a total revenue increase of 164.25% over the same period last year. Ecovacs and Tineco's two self-owned brand businesses alone accounted for 86.75% of the company's revenue during the reporting period. The increase in the proportion of self-owned brand business directly promoted the company's overall gross profit margin and net profit margin attributable to shareholders of listed companies to 50.28% and 15.86%, respectively.

Improve the advantages of independent production. Ecovacs has many years of experience in intelligent manufacturing, and its products are basically all self-produced. With the advantage of scale, it has strong bargaining and supply chain integration capabilities. The efficient independent production capacity can also help the company flexibly and efficiently adjust product types and powerful SKUs.

The support of various successful strategies such as users, R&D, layout, and supply chain is undoubtedly the guarantee for Ecovacs to continue to achieve excellent results. Sellers who sell related categories or want to enter this category can learn from Ecovacs' successful experience to layout smart innovation categories and usher in better development.

Of course, compliance operations are also a point that sellers cannot ignore. Especially when the account blocking wave has not stopped, it is still unknown who Amazon will turn its knife to again, but what is known is that the impact of the account blocking incident has been reflected in their financial reports. Some are happy and some are sad, which makes people realize the truth that only by operating in compliance can you live with a smile.

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