Source: CHEAA-run China Appliance magazine

Robotic vacuums come into our view as the consumption level of Chinese consumers gradually improves. The sector has been on a roll since 2012, and is now facing intensified competition when more and more internet brands jump into the landscape amid the broad sluggishness of economy. For year 2019, the market growth of robotic vacuums dived. It is learned that, the downward economic environment and immature technologies of the sector shall take the most blame. At this point, the industry is undergoing a new round of shakeup.

With a fall in growth, the sector needs to improve product quality

Sales of robotic vacuums on Chinese market posted 6.13 million units in 2018, up by 45.2% year-on-year, with sales value up by 49.1% year-on-year to 7.8 billion Yuan, a fairly high level, according to All View Cloud. Yet the strong momentum started to fade amid the downward economic environment. From January to October 2019, sales of robotic vacuums came to 4.19 million units, up by 6% year-on-year, and sales value 5.46 billion Yuan, up by 5.1% year-on-year, according to All View Cloud.

Speaking of reasons behind this, our interviewee from Ecovacs believes that it’s not because consumer demand is falling, but consumers want better products. “Our T5 series sold in huge numbers during Double 11 shopping festival, which shows that good products still have great market potential.”

In 2019, products in the price range between 2000-3000 Yuan expand at online market. Middle-end and high-end products take an increased share of the market. Zuo Daiqi, General Manager of Midea’s vacuum cleaner division, believes this is because different tiers of China’s market show different consumption habits. He adds that, “currently, middle and high range products are increasingly recognized by consumers who are willing to pay more for good products.”

Shimobayashi Nobuyuki, head of vacuum cleaner division and Vice General Manager of Panasonic China, believes that, there are two reasons behind the slowing growth of robotic vacuums: (1) the value of robotic vacuums not fully tapped; (2) the increasing popularity of handheld vacuum cleaners. He points out that, “you could hardly see a household that buy both a handheld and a robotic vacuum in China. In this context, the fast development of handhelds will surely eat away the ground of robotic vacuums. Plus, currently, robotic vacuums are not well iterated, and as a result, consumers’ recognition and expectation for it is lower compared to handheld products.”

“The slowing growth of robotic vacuums shows that consumers become more rational and aware of their needs when they choose robotic vacuums, which will speed up the quality upgrade of robotic vacuums. Thus the slowing down is a reasonable process the industry undergoes in development.” Zhong Yun, Product Development Manager of Lambot says.

Technologies behind the industry

From the Electrolux Trilobite in 1997, the exploration of iRobot in 1998 to today’s models that are capable of LDS+SLAM technology, route planning and VSLAM visual navigation, the technological evolvement of this category is obvious. And it is the technological advancement that propels the industry to grow.

The core technologies of robotic vacuums are developed to enhance functions that include sweeping, mopping, moving around obstacles, mapping, and human-machine interaction. It is learned that most of them (sweeping excluded) are still in a groping stage. In 2019, Ecovacs rolled out its DG70. Powered by AIVI (Artificial Intelligence and Visual Interpretation), the product is more accurate in identifying obstacles and developing cleaning strategy, which makes the cleaning process smarter and more efficient.

Li Nan, Vice General Manager of Lambot, believes that, robotic vacuum has been more of a conceptual product with little practical functions in the past few years. “Starting from 2018, the sector has been on a transformation and upgrade. Enterprises are doing explorations such as adding a water tank, improving suction power and adding new functions including mite-killing. But for me, these are more of an improvement conceptually. It might boost sales to some extent, but the technological threshold of the industry is still low. I believe that, the breakthrough of the industry has to be made with new technology as a strong support. And laser technology will really power the industry to enter a smart era.”

Technology is the bedrock of Lambot, Li Nan says. “Slamtec, the parent company of Lambot, specializes in laser, radar and SLAM solutions. It covers 95% of the market when it comes to route planning. The growth of laser-powered robotic vacuums has been very exciting in 2018. Lambot will invest more in the research and development of technologies, and plans to roll out its brand new laser product in the first quarter of 2020.” He unveils that, the new product will offer offline voice service and AI-powered identification function. Plus, Lambot will launch an ultra slim laser model that only measures 8mm-8.5mm in height. He says, the new product will remain the old price despite all the improvements made.

“Robotic vacuum sector is tech-driven and consumer experience-oriented. Using this product needs some learning time, which as a result limits the user base, and technological improvement is the only way for the industry to move beyond the current plateau. I believe brands with strong R&D capability will take the initiative in future competition.” Our interviewee, head of the robotic vacuum division of 360 says. “360 started out as an Internet company, which makes us particularly strong in AI technology and talent team building. Our robotic vacuums have made multiple breakthroughs. In June 2019, 360 unveiled its new solution featured Lider-SLAM+3D Vision, taking the lead in the industry development. ”

The low penetration sector faces doubts around false advertising

“The penetration of robotic vacuums in China is only 4% while the number is 10% in the Europe and the U.S., which means Chinese market has 6% to go. Besides, the penetration of vacuum cleaners is 13% in China, which means robotic vacuum sector has 9% to grow.” This is what we heard from Haier when the company unveiled its visual navigation model TAB TS60 in the first half of 2019. Low penetration is a common issue facing the industry. Our interviewee from Ecovacs says they have been actively communicating with consumers in multiple ways to increase their awareness of the products. “We are also very glad to welcome more partners to join us in consumer education.”

Besides, the fast expansion of cheap, technologically-mediocre products badly hurt the industry development as consumers could hardly tell the difference technologically when the product appearances are highly similar. “These products can move around but do not have any smart functions, which leave a terrible impression for consumers who try robotic vacuums for the first time and badly hurt the healthy development of the industry.” To tackle this issue, we need to start with standard development. Zuo Daiqi points out that, currently, substandard products and false advertising are a dime a dozen. He believes establishing concrete industry standards is the only way to regulate the industry and avoid over-hyping.

Li Nan points out that, overhyped low-quality products damage consumers’ recognition of this low-penetration sector and hinder the industry development in the long round. “It not only hurts the industry, but also consumers’ interests. Down the road, we need refined industry standards to raise the bar for market entry and deter the substandard products into the market.”

With great potential untapped, the sector sees AI and smartness as a new direction

As the post-90s generation become the mainstay of consumption, products that cater to lazy people embrace a round of growth. “Chinese consumers welcome new things. The untapped market space for robotic vacuums is huge.” Shimobayashi Nobuyuki says.

Smartness is also a direction enterprises are looking at. Powered by AI technology, robotic vacuums can accurately identify obstacles. Li Nan says, “Whether it’s a sock, a shoe, a piece of wire, a toy or pep poop, the product is capable of identifying whether it is rubbish or not through its AI-powered camera, and then decides whether it shall move around it or take it in.”

Shimobayashi Nobuyuki points out that, industry players shall dig into the potential value of robots, for instance, its interaction with pets, its role as a companion for people and other human-machine interactions as its cleaning function has been broadly recognized by users. “Using AI to empower products and making robots smarter and human-oriented is a future direction.” He says.

Zuo Daiqi points out that, deep cleaning, smart route planning and auto-identification human-machine interaction is where enterprises shall look at to make technological breakthroughs and innovations. He says, more diversified auto cleaning products will be on the market in the upcoming 2020, which will further expand the market capacity of this sector. Speaking of the future of the industry, Zuo Daiqi says, “The sector has great potential to be unleashed. China’s ongoing trend of consumption upgrade is expected to drive more application of technologies on robotic vacuums. Midea’s next-generation product will offer breakthroughs in smart route planning, auto identification and human-machine interaction.”