Chinese Brands' Robot Vacuum Cleaner: a Versatile Tool or a Marketing Gimmick?

Consumer Discretionary Author: Steve Bu Jul 26, 2023 01:09 PM (GMT+8)

Some argue that robot vacuum cleaner have unlocked the popularization of service robots in Chinese households, bringing the once unattainable smart home cleaning scene into reality.

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As a country where household appliances in the cleaning sector were relatively late to become widespread, when Chinese brand Ecovacs (科沃斯) launched its first robot vacuum DEEBOT in 2006, many Chinese consumers had never even purchased its predecessor, the vacuum cleaner. Even on the eve of the IoT and consumption upgrade boom between 2010 and 2015, when service robots for cleaning and meal delivery began to appear in some high-end shopping malls and hotels, passersby who experienced them still felt that robots were too far away from their daily lives.

Time has passed, and today, robot vacuum cleaners have become a must-have on the household appliance shopping list, and domestic social media users refer to them as "large home appliances" due to their huge and versatile docking stations and flagship models costing as much as RMB 4000 to 5000  (USD 600 to USD 750). Ecovacs, Roborock (石头科技), Dreame (追觅), Xiaomi (小米), and other followers of iRobot's patents have already exceeded their predecessors, using core technologies such as obstacle avoidance algorithms, automatic water dispensing, and laser radar, while also expanding the battlefield of cleaning to the international market, a blue ocean for smart home appliances.

The History of iRobot: From its Beginning to Technological Iterations

When iRobot was founded in 1990 by Colin Angle and his two partners, who were robotics experts from MIT, they may not have realized that the company, which initially aimed at the space industry, would later excel in the consumer-level household robot vacuum market.

From iRobot's early development of self-propelled space inspection, disaster relief, archaeology, military transport, and commercial cleaning robot products, it is easy to see that the company has accumulated a deep foundation in small-scale navigation systems, sensors, and laser radar technology. Combining these advantages, products for the general consumer market were born.

In 2002, iRobot officially launched its first consumer-level robot vacuum, the Roomba, which was inspired by the company's collaboration with Johnson Wax to develop a robot for cleaning floors in shopping malls. Prior to this, the world's first mass-produced robot vacuum, the Trilobite, had already been introduced by Swedish household appliance giant Electrolux in 2001. Even Dyson had considered entering this field at the time, but both failed to become popular. However, the Roomba was highly sought after as soon as it hit the market and as of August 2022, the series has sold over 40 million units.

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iRobot Roomba (Source: official website)

Learning from Electrolux's product being criticized for being too clumsy, slow-moving, and not cleaning well enough, the Roomba ushered in the era of random cleaning, using an all-aluminum alloy material, with a thickness of only 12 centimeters, and added a side brush to assist with cleaning. However, when it encountered obstacles, the machine would change direction on its own, leading to low coverage, while the suction power was still weak. Later, iRobot improved with the introduction of beacon positioning, reducing the chances of it roaming aimlessly. When the product entered the era of planned cleaning, the mapping function combining cameras and infrared was introduced, which almost perfectly solved the coverage problem, but had very strict requirements for the placement of the docking station.

In 2010, Logitech founder Pierluigi Zappacosta introduced lidar ranging technology into the fifth generation of robot vacuum cleaner and launched it to the market, which was considered by the industry as a king-level innovation. The principle of this technology is to generate a 3D map through a laser emitter and receiver, combined with algorithms. The outstanding feature of this Neato robot is the use of a 360-degree rotating laser rangefinder to scan the surrounding environment, instantaneously locate and construct an environmental map (SLAM), and plan the cleaning route in the house based on this. At the same time, it also pioneered the function of resuming cleaning from the last stopping point after the robot returns to the docking station for charging due to low battery.

This application marks the official transition of robot vacuum cleaner towards intelligence, and Chinese brands, as the later entrants, also enjoy the technology dividend of standing on the shoulders of giants.

The Rapid Rise of Chinese Brands and Their Competitive Features

Since the completion of the fifth generation of overseas robot vacuum cleaner, some products have started to appear on the shelves of shopping malls in first- and second-tier cities in China. However, at that time, the prices were high, and the consumers were few, mainly among the high-income groups who were willing to try new things.

After 2015, the rise of mobile internet and the trend of consumption upgrades and refinement prompted domestic vacuum cleaner leader, Ecovacs, to begin transformation and focus on the robot vacuum category. Meanwhile, white goods giants Midea (美的) and Haier (海尔), as well as new-generation intelligent cleaning companies such as Xiaomi, Narwal (云鲸), Dreame, and Roborock, launched their own new products to seize the market share.

From the price range of the flagship models of various brands, the current pattern of Chinese robot vacuum brands can be seen as follows: Ecovacs, Roborock, Dreame and Narwal are the top-end brands (with a unit price of over RMB 4,000). Midea and Haier occupy the mid-range (with a unit price of over RMB 3,000). Xiaomi, Proscenic, Eufy (a sub-brand of Anker Innovation), and other brands focus on the low-end market (with a unit price of over RMB 1,000). This situation is closely related to the technological arms race among domestic brands from 2019 to the present.

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Since 2019, major robot vacuum brands have been competing to upgrade their technology in high-precision navigation, SLAM, 3D perception, AI object recognition, etc., and also innovating in functionality.

The first to shake up the market was Narwal. In 2019 and 2021, Narwal launched its own sweeping and mopping robots J1 and J2, which were the first to achieve automatic water supply and automatic cleaning of mops, and had significantly better mopping effects than their competitors. The sales performance was remarkable. In 2020, J1 ranked first in the household appliances category on Tmall, while J2's sales on the first day of its launch on Singles' Day 2021 exceeded RMB 200 million in just seven minutes. At the same time, Narwal built a door-to-door installation service system covering more than 300 cities and regions nationwide and led the development of the first door-to-door service standard in the Chinese cleaning robot industry.

However, this technological advantage did not last long. Ecovacs, Dreame, and Roborock quickly caught up with these features and incorporated them into mid-priced models with their rich product lines and deeper industrial design capabilities. Of course, these three "internet celebrity" brands were not satisfied with this and did everything they could to gain a higher market share.

In the second half of 2021, Ecovacs launched the world's first all-in-one robot vacuum, the X1, which is equipped with automatic mop washing, automatic dust collection, and visual+3D obstacle avoidance. In the spring of 2023, the latest flagship model in the Chinese domestic market, the X1S Pro, was launched, which comes with a 10-in-1 all-in-one base station, hybrid rubber and bristle brush, AIVI AI recognition technology (for deep cleaning in corners and edges), and up to 6000Pa suction power. It also has a special cleaning solution for pet hair, making it almost the ceiling configuration of domestic robot vacuum cleaners.

Dreame's flagship model, the X20 Pro Plus, is not to be outdone. It is the world's first robot vacuum to be implanted with a bionic mechanical arm, which allows the mop to extend outside and clean corners. Its suction power reaches an astonishing 7000Pa and it can automatically recognize rooms, furniture, and floor materials and match cleaning solutions based on user habits and dirty maps. In addition, its 5800mAh battery, AR real-world map, and 58-degree hot water mop washing are also highly competitive features.

Roborock's current flagship product, the G20 (S8 Pro Ultra), focuses on climbing and obstacle capabilities. It is equipped with the RR Mason10.0 system and 3D structured light detection accurate to the millimeter, which can recognize slippers, power strips, data cables, etc. in the house and easily cross thresholds in balconies and kitchens.

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Roborock S8 Pro Ultra(Overseas Version of G20, Source: Offficial Webste)

The result of technological and product homogenization is the rapid increase in industry concentration. According to data from Hua Jian Industry Research Institute, Forward-looking Industry Research Institute, and AVC Cloud Net, the top five domestic robot vacuum brands ranked by retail sales volume are Ecovacs, Roborock, Xiaomi, Narwal, and Dreame. Among the two giants, in 2022, Ecovacs captured 39.8% of the Chinese robot vacuum market share, with an offline channel market share of 80%; Roborock Technology's market share was 21.3%.

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Overall, Chinese robot vacuum cleaner brands have undergone a rapid technological and product upgrade in recent years, resulting in intense competition and technological homogenization. The market is dominated by a few top brands, with Ecovacs and Roborock leading the pack. The flagship models of these brands boast advanced features such as all-in-one cleaning, bionic mechanical arms, and high suction power, among others.

Is Smart Technology a Panacea for Winning the Market?

The entry of technology companies into the home appliance market has greatly accelerated the trend towards smart appliances. Overseas giants such as Apple, Samsung, Google, and Amazon have all embedded their cloud products into their own brands or third-party hardware, forming a complete home ecosystem.

In addition to the domestic market, the overseas expansion of Chinese sweeping robot brands also shows their intention to achieve a bend overtaking on the smart track.

Taking Ecovacs as an example, the brand began to expand its overseas market in 2012, but the results were minimal, with overseas revenue accounting for only a single-digit percentage. However, in the first half of 2021, overseas revenue increased by 134.8% year-on-year, accounting for 31% of total revenue.

This achievement is due in part to Ecovacs' "difficult first, easy later" overseas strategy and extreme emphasis on brand marketing. In 2020, the brand created official accounts on media such as YouTube, Facebook, Twitter, Instagram, and TikTok. On YouTube, foreigners love to watch product introductions and unboxing videos. "Difficult first, easy later" is reflected in Ecovacs' decision to first enter developed countries such as the United States, Japan, and Germany, establish local teams and distribution networks offline, collaborate with Target, Bestbuy, and other retailers, and cover all major online sales platforms such as Amazon, Walmart, Shopee, and eBay.

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Ecovacs T20 OMNI on Amazon UK (Source: Amazon Website)

On the other hand, compared to local brands such as iRobot and Philips with their outdated designs and limited functions, Ecovacs has achieved a knockdown in both appearance and technological innovation for products in the same price range, and has successfully balanced cost-effectiveness and high-end brand positioning relying on its supply chain.

However, smart technology has always been a double-edged sword. If we interpret Ecovacs from a financial report and macro-market perspective, it is a completely different story. In 2022, Ecovacs Robotics' global revenue was RMB 7.797 billion, a year-on-year growth rate of 16.21%. However, during the same period, sales were over 3.11 million units, a year-on-year decrease of 12.5%. It is not difficult to understand that Ecovacs' revenue growth mostly comes from product price increases, and the confidence to raise prices comes from functional upgrades. Therefore, now robots must be proficient in all functions such as dragging, self-cleaning, dust collection, hot water washing and mopping, and AI voice interaction, not just sweeping the floor.

After the price increase, the visible result is the decline in sales. AVC data shows that the average price of Chinese sweeping robots has increased from RMB 1,687 in 2020 to RMB 3,304 at the end of 2022, an increase of nearly 96%. In terms of sales, in 2022, domestic sweeping robot sales were 4.41 million units, a year-on-year decline of 24%, the second consecutive year of decline. Currently, only overseas markets have maintained growth in shipments.

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Another category factor squeezing the sales space of sweeping robots is the floor scrubber. In the foreseeable economic downturn, both domestic and overseas users may not consider the sweep-mop combination machine with overly complex functions and high prices as the best option. Even if it is equipped with the so-called latest technology, if the frequency of use is low, the failure rate and repair rate are high, it cannot bring a high-quality experience and will cause negative amplification effects on user reputation. EqualOcean has already found a lot of complaints about robots' function issues on Xiaohongshu, such as not returning to the base station, unable to recognize common obstacles, too much water, scratching the floor, hair entanglement and inability to remove, etc., while many other users claim to have not encountered these problems. The same evaluation also appears on Amazon DE. Once consumer evaluations are polarized, it is essentially a manifestation of poor quality control.

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The Negative Reviews on Ecovacs T20 OMNI (Source: Amazon Website)

Therefore, when users discover that the floor scrubber, which combines washing, suction, mopping, and self-cleaning functions, is much cheaper and has a lower failure rate than the sweeping robot, the two intelligent cleaning product categories that should complement each other will inevitably squeeze each other. Ecovacs hopes to achieve a dual-wheel drive strategy through its two sub-brands, Ecovacs and Tinko, but it has encountered the dilemma of mutual substitution.

It is worth mentioning that emerging market countries still have time to accumulate user bases, but the maturity of developed market countries will not give newcomers too much room for error. Ecovacs, which has been overseas for many years and has a remarkable record, has always been surpassed by iRobot in global market share (the latter's global market share in 2020 was 62%), which may still be due to brand awareness, loyalty, and product durability. 

According to EqualOcean, consumers in the European and American markets with high spending power generally have high Brand loyalty, are not easy to buy unfamiliar products, and attach great importance to e-commerce evaluation. If the brand reputation has not yet been established, even intelligent and cost-effective floor sweepers are difficult to gain favor. In addition to time accumulation, the most important thing may still be to ensure basic functionality and quality control, improve quality control, improve yield, and continue to adhere to localized research and development and operation strategies.