By LI Biao
The robot vacuum cleaner market has become the scene of one of the more bloodthirsty price wars in China's retail sector.
Top-tier manufacturers are all fighting for a piece of the action, but one robot vacuum is much like another, and numerous homogeneous products have nothing but price to differentiate one from the other.
Ecovacs, a Chinese company, saw a revenue of 7.1 billion yuan (US$980 million) in H1, year-on-year growth of only 4.7 percent with net profit collapsing, losing a third of its value – down 23 percent in Q1 and 43 percent in Q2.
In H1 2023, Ecovacs expended over 400 million yuan on marketing, particularly on social media platforms such as Douyin. The sales channels for robotic vacuum cleaners are predominantly online.
During H1, demand stagnated. Total sales of cleaning appliances reached 15 billion yuan up by 3 percent which is a big turnaround from 40 percent growth during 2021 and 7 percent last year.
Ecovacs makes about half its money from vacuum cleaners and half from floor scrubbers. It seems that almost everyone who ever wanted a robotic vacuum cleaner already has one and sales are quickly drying up.
To suck up the pressure, Ecovacs cut prices and the price war began. In contrast, floor scrubbers have emerged as a growth point. People do not yet have floor scrubbers in their closets.
Ecovacs stock has fallen throughout the past year to less than one-third of its 2021 peak.
