Dominating the overseas charts, with billions of sales! Many overseas brands are popular

In recent years, with the improvement of people's requirements for quality of life and the advancement of technology, smart cleaning appliances have become more and more popular and have become the new favorite of consumers today.

According to a research report released by IDC, the total sales of the global cleaning appliance market reached US$56 billion in 2023, of which sales of sweeping robots and floor scrubbers accounted for more than 30%.

Driven by high demand, this market has also produced a number of leading companies.

" C R4 of sweeping robots " sweeps overseas markets

Statistics show that in the robot vacuum cleaner industry, Roborock Technology, Ecovacs, Dreame Technology and Injing Technology together have more than 90% of the domestic market share. These four companies are often referred to as the "CR4 of robot vacuum cleaners" by the outside world.

At present, leading domestic cleaning appliance companies such as Roborock, Ecovacs, Dreame Technology, and Inwhale all have layouts in overseas markets.

Among them, Stone Technology was founded in 2014. Its main products include smart sweeping robots, floor scrubbers, washer-dryers and other smart appliances. The company began to go overseas in 2017, focusing on developing the US, European and Southeast Asian markets. It has opened online brand stores on online platforms such as Amazon, Home Depot, Target, BestBuy, Walmart, etc. in the United States, and has established overseas companies in the United States, Japan, the Netherlands, Poland, Germany, South Korea and other places.

Currently, Roborock Technology's products are sold in more than 170 countries and regions around the world, and more than 15 million households are using its sweeping robots.

In 2023, Stone Technology also entered the US offline physical chain retail channel Target for the first time, and has now expanded to more than 180 offline Target stores in the United States.

In 2023, Stone Technology's overseas omni-channel strategy continued to advance, and the company's overseas business continued to improve. Stone Technology's overseas revenue for the whole year of 2023 reached 4.229 billion yuan, an increase of 21.42% over the same period last year.

On March 29, 2024, Roborock Technology held its 2024 global launch conference, at which it cited Euromonitor International research data and pointed out that Roborock Technology's sweeping robots achieved the highest sales in the world.

Ecovacs, another leading company in the robot vacuum cleaner industry, was founded in 1998. Its core products are vacuum cleaners, robot vacuum cleaners and household robots. In 2012, the company established an internationalization strategy and accelerated its layout in the international market. Currently, its overseas business has expanded to more than 80 countries and regions including the United States, Japan, Spain, Switzerland, France, Canada, the Czech Republic, Poland, Germany, Iran, Malaysia, etc. The company has set up overseas branches in important markets in Europe, America and Asia such as Germany, the United States and Japan.

In the first half of 2023, Ecovacs' overseas business revenue increased by 26.5% year-on-year, and the proportion of total revenue increased to 34.3%. Overseas revenue contributed 36% of Ecovacs' revenue. The overseas market has obviously become an important part of Ecovacs' business growth.

Dreame Technology was founded in 2017. In the early days of its establishment, it attracted a lot of attention from the market because it joined the Xiaomi ecological chain. The company's main products are four categories: sweeping robots, cordless vacuum cleaners, floor scrubbers, and high-speed hair dryers. Dreame Technology began to go overseas in 2019, and its products are currently sold in more than 120 countries and regions including the United States, Germany, France, Italy, Spain, Russia, and South Korea.

In 2023, Dreame Technology's overseas business grew by 120% compared to the previous year, and its market performance in many countries and regions was quite remarkable.

On Double 11 in 2023, Dreame Technology's total sales in the Southeast Asian market exceeded 100 million, a year-on-year increase of nearly 10 times. During Black Friday in 2023, Dreame Technology's sales in Southwestern Europe increased by 542% year-on-year, and sales in North America increased by 450% year-on-year.

As of the end of December 2023, Dreame Technology has 4,400 offline stores in overseas markets.

Another company, Yunjing, was founded in 2016. Its core products are smart sweeping and mopping robots and smart floor scrubbers. The company started its overseas expansion plan in 2019, and its first overseas crowdfunding reached 780,000. In 2022, Yunjing officially entered overseas markets, with the North American market as its first stop. Currently, Yunjing has entered Amazon's US, Canada, Germany, and Japan sites, and its products are sold well in more than 30 countries and regional markets including North America, Europe, Japan, South Korea, Australia, and Southeast Asia, serving nearly 2 million user households.

In 2023, Yunjing participated in Amazon Prime Day for the first time and ranked second in the Best Seller rankings in the US site's sub-category.

Leading companies have been making great strides and have won multiple rounds of financing!

As the leading companies in the smart cleaning sector have been making great strides, they have also gained the favor of the capital market.

1. Stone Technology

Stone Technology is a Xiaomi ecological chain enterprise. It went through five rounds of financing before its listing . In addition to Xiaomi Technology and Shunwei Capital, investors also include well-known VC institutions such as Gaorong Capital, Qiming Venture Partners, and GIC.

On February 21, 2020, Stone Technology was officially listed on the Science and Technology Innovation Board, with an initial offering of 16.667 million new shares and a fundraising of RMB 4.519 billion.

2. Ecovacs

On January 18, 2012, Ecovacs completed a tens of millions of dollars Series A financing round with IDG Capital as the investor.

On May 28, 2018 , Ecovacs was listed on the main board of the Shanghai Stock Exchange with an issue price of 20.02 yuan per share. It hit the daily limit on the first day of listing, with an increase of 44.01% to close at 28.83 yuan per share, with a total market value of 11.53 billion yuan.

3. Dreame Technology

From April 11, 2018 to June 1, 2023, Dreame Technology completed 7 rounds of strategic investment, 1 angel round and 1 A round of financing, and the amount was not disclosed to the public.

In August 2020, Dreame Technology completed a B+ round of financing of nearly 100 million yuan, led by IDG Capital, followed by Xiaomi, Shunwei Capital, Peak Valley Capital, and Qingrui Ventures.

In October 2021, Dreame Technology announced the completion of a RMB 3.6 billion Series C financing. This round of investment was led by Huaxing New Economy Fund and CPE Yuanfeng, with strategic investment from Country Garden Venture Capital, Yunfeng Fund, Xinze Asset, Beijing Taikang Investment, Skywalker Capital, Harvest Investment, and Dachen Capital, and additional investment from old shareholders Xiaomi Group, Shunwei Capital, and IDG Capital.

4. Cloud Whale

In the second year after Yunjing was founded, it received angel round financing and Pre-A round financing from investors such as XBOTPARK Fund and Mingshi Capital.

From 2019 to 2020, Whale Cloud completed rounds A , A+ , B and C respectively . The financing amounts of rounds B and C were both in the hundreds of millions of RMB . The investors of round B were Source Code Capital, Infore Capital and Rice Ventures, and the investors of round C were Sequoia China, Source Code Capital, Hillhouse Capital, ByteDance Strategic Investment Department, etc.

In November 2021 and August 2022, Yunjing completed its Pre-D and D rounds of financing respectively. The investors in the Pre-D round were Chuangwan Investment and Yuntai Innovation Investment, and the investor in the D round was Tencent Investment.

Revenues of many leading enterprises are entering the fast lane

With the help of capital and high market demand, the revenue of these leading companies is also growing rapidly.

1. Stone Technology

In recent years, Stone Technology's revenue has maintained a rapid growth trend.

From 2021 to 2023, Stone Technology's revenue was 5.837 billion yuan, 6.629 billion yuan, and 8.654 billion yuan, respectively, with revenue growth rates of 28.84%, 13.56% and 30.55% in these three years.

During this period, Stone Technology's overseas market revenue was RMB 3.364 billion, RMB 3.483 billion and RMB 4.229 billion, respectively, maintaining a steady growth rate.

As for the reason for the substantial increase in performance, Stone Technology said that the company has been expanding its domestic and overseas markets in the process of development, and its sales scale has also been expanding. During this period, it has launched a number of new products, which have been recognized by consumers, and its market competitiveness has also been enhanced, and its profitability has been continuously improved. Stone Technology emphasized that the important reason for the company's rapid growth in performance is the emphasis on R&D and the dual drive of domestic and overseas markets .

2. Ecovacs

After Ecovacs successfully listed on the Shanghai Stock Exchange in 2018, the company's performance development has been on a fast track of growth, and in 2021 the company's revenue exceeded 10 billion yuan.

In 2021, Ecovacs' revenue soared to 13.083 billion yuan, and its net profit rose to 2.01 billion yuan. Also in July of that year, Ecovacs' stock price reached a high of 250.71 yuan per share, with a market value of more than 140 billion yuan.

In 2022, Ecovacs' revenue reached 15.32 billion yuan, but its net profit attributable to the parent company fell by 15.51% compared with the previous year, resulting in a situation where revenue increased but profits did not.

According to the 2023 performance forecast released by Ecovacs this year , the company's net profit attributable to shareholders of the parent company in 2023 is expected to decrease by 59.96% to 64.67% year-on-year, and the downward trend in performance is very obvious.

According to its 2023 performance forecast, Ecovacs expects to achieve a net profit attributable to shareholders of RMB 600 million to RMB 680 million in 2023; it expects to achieve a net profit attributable to shareholders of RMB 436 million to RMB 516 million after deducting non-recurring items, a decrease of 68.27% to 73.19% compared with RMB 1.626 billion in the same period last year.

Ecovacs said that the reason for the expected decline in performance was the domestic market. Due to the downward trend in the average price of domestic products in the same industry, the gross profit margin of the company's sweeping robots and floor scrubbers has declined compared with the same period last year. On the other hand, affected by the economic situation, domestic consumption power is slightly insufficient, coupled with increasingly fierce competition in the industry, the online channel structure has also changed, resulting in a decline in the conversion efficiency of market investment, and Ecovacs' sales expenses as a proportion of revenue have also increased. In addition, the company's new categories such as commercial cleaning robots, lawn mowing robots, and Shiwan smart food processors are currently in a net investment period, which has a certain impact on the company's overall profit.

3. Dreame Technology

In recent years, Dreame Technology's performance has doubled.

In 2019, Dreame Technology's revenue exceeded 500 million yuan. In 2020, this figure saw rapid growth, exceeding 2 billion yuan.

In 2021, Dreame Technology's revenue doubled to approximately 4 billion yuan.

By 2022, under the influence of the international environment, the demand for products in the smart cleaning industry has decreased significantly. According to data from the General Administration of Customs, from January to November 2022, China's vacuum cleaner exports fell by 20% year-on-year. The growth rate of many leading brands in the industry has slowed down significantly.

However, in 2022, Dreame Technology's GMV (gross merchandise volume) increased by 1659% year-on-year, its revenue increased by about 60% year-on-year, and its overseas business also increased by 60%.

Dreame Technology said, "It is expected that the company's revenue will reach 8 billion yuan in 2023."

4. Cloud Whale

Judging from market performance, Yunjing is clearly inferior to Stone Technology, Ecovacs and Dreame Technology.

From 2019 to 2021, Yunjing's revenue was RMB 20 million, RMB 800 million, and RMB 2 billion, respectively, maintaining a steady growth trend.

However, by 2022, Yunjing's performance had declined significantly, with sales in the first half of the year reaching only about 350 million yuan.

By the second half of 2023, Yunjing's overseas business will usher in rapid growth. In September 2023, Yunjing's overseas market revenue increased by 350%.

In March 2024, on the first day of its launch in North America, Yunjing's high-end flagship phone, Freo X Ultra, topped the Amazon best-selling list in the United States and Canada and the Amazon new product list.

Leading enterprises still face multiple risk factors when going overseas

Although these major companies are at the top of the industry, they still face multiple risk factors during their development.

1. Stone Technology

Since the establishment of the company, Stone Technology has been highly dependent on sweeping robot products, so it faces the risk of a single product structure. If industry demand changes, it will have a direct impact on the company's performance. Compared with its competitor Ecovacs, although sweeping robots are also Ecovacs' core products and an important source of income, the company also operates another small appliance brand -Tineco, which is also an important part of the company's revenue. The brand's revenue has increased from 273 million yuan in 2019 to 6.909 billion yuan in 2022, and the proportion of total revenue has increased from 5.1% to 45.09%, driving the company's performance to grow rapidly.

On the other hand, Roborock's products have been repeatedly complained by consumers. The reasons for the complaints include: "poor product quality", "multiple failures during product use", "refusal of after-sales service", etc., involving sweeping robots, floor scrubbers, washing machines and many other products.

2. Ecovacs

The primary problem facing Ecovacs is that revenue has increased but profits have not. According to Ecovacs' financial report data, in the first half of 2023, the company's revenue was 7.144 billion yuan, an increase of only 4.72% over the same period last year, significantly lower than the revenue growth rates of 123.11% in 2021 and 27.31% in 2022.

In the first half of 2023, Ecovacs' net profit was 584 million yuan, down 33.40% year-on-year. This was lower than the net profit growth rates of 543.25% in 2021 and 3.15% in 2022.

Another problem facing Ecovacs is that its online market share of sweeping robots is plummeting.

According to data from Aowei Cloud Network, from 2021-2022 and the first seven months of 2023, Ecovacs' share of the online market for sweeping robots was 38.63%, 34.35% and 32.32% respectively, showing a downward trend.

Another thing is that Ecovacs' R&D investment is lower than that of Roborock and Dreame Technology. According to Ecovacs' financial report, the R&D expenditure in the first three quarters of 2023 was 605 million yuan, which is a certain gap compared with Roborock and Dreame Technology.

In sharp contrast, from 2020 to 2022, Ecovacs' R&D expenses accounted for 4.7%, 4.2% and 4.9% of its revenue, while Stone Technology's R&D expense rate was 5.8%, 7.6% and 7.3% respectively. In recent years, Dreame Technology has maintained a 70% R&D personnel ratio and 10% R&D expense investment.

If R&D investment is insufficient, it will be difficult to have an absolute advantage in industry competition, and it will also affect the market share of sweeping robot products.

3. Dreame Technology

Although Dreame Technology has achieved good development momentum in recent years, it is currently facing the risk of declining reputation.

There are many complaints about Dreame on the Black Cat complaint platform. The common problems reported by these consumers are the poor quality of Dreame's products, poor after-sales service, false advertising, non-delivery and non-refund.

In addition, Dreame has also been involved in a litigation dispute, being sued by its peers for patent infringement and unfair competition, with the amount of compensation reaching tens of millions of yuan.

4. Cloud Whale

Although Yunjing has performed well in the market in recent years , it still lags behind other leading brands. With the intensification of market competition, it will be disadvantageous to Yunjing in the long run.

Specifically, Yunjing currently has shortcomings in financial strength, technology, and products compared with other leading brands.

The direct reflection of the company's shortcomings in strength is the evaluation of consumers. Since last year, many users have complained about Yunjing's products and after-sales services.

From the perspective of the overall market environment, in recent years, the intelligent cleaning robot market has experienced rapid development, attracting many brands to enter the market, and market competition has become increasingly fierce. In terms of products, homogeneity is very obvious, and functional innovation is very insufficient. The reason for this market situation is that the technical levels of various companies are uneven, and they do not have their own unique advantages in products, making it difficult to make differentiated products. In the long run, these companies are very likely to be eliminated as long-term market competitors.

Many leading companies are competing to develop high-end models, which has reduced the market acceptance of low-end models. In addition, the average price of the currently popular smart cleaning robots is generally high, which will affect some consumer groups from placing orders, thus causing a decline in sales in the entire market.

However, although the current market competition for smart cleaning robots is intensifying and the industry is under certain growth pressure, the market demand for products is still very large. It is estimated that by 2025, the global market size of smart cleaning robots will reach US$7.5 billion and the penetration rate will reach 29%.

In the future, smart cleaning robots must have technological breakthroughs, improve consumers' experience in product functions, and promote models at different price points to meet the needs of different consumer groups.

Because the technical requirements of intelligent cleaning robots are very high, mainly involving autonomous navigation design positioning, path planning algorithms and sensor technology, etc. This requires companies to continuously carry out product research and development and launch innovative products.

Moreover, smart products are generally updated very quickly. In order to promote brand awareness and enhance market position, smart cleaning robot products need to be combined with a variety of emerging technologies to meet consumer needs in different application scenarios.

For companies in this field, they can adapt to market changes in the following three aspects.

First, optimize technology and increase R&D investment. Technology is the foundation of an enterprise. Under the fierce market competition, the key point of the competition in the intelligent cleaning robot track is technology . Whoever has the most advanced technology will have an advantage.

Second, adjust the product structure according to consumer demand. Enterprises can implement a multi- SKU and multi-category strategic layout to avoid the risk of a single product structure.

Third, optimize the supply chain and reduce product prices to a certain extent. For technology hardware products, in the second half of the competition, the supply chain capabilities are generally the key. Therefore, companies must optimize the supply chain to further reduce product prices and gain a competitive advantage.

According to the latest research report of Guojin Securities, the penetration rate of sweeping robots in most countries is still low, so there is a huge market space for this track. According to the potential growth space of sweeping robots worldwide, if the penetration rate is 30% in North America, the demand is about 9.84 million units per year; if the penetration rate is 25% in Europe, the demand is about 6.26 million units per year; if the penetration rate is 20% in Japan and South Korea, the demand is about 3.9 million units per year.

In general, the global market for sweeping robots is about 45.44 million units per year , which still has a lot of room for growth. In the future, the market for smart cleaning appliances will have great potential.

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