TECHNOLOGY

Chinese robot vacuums sweep global rivals with high tech,

low prices
Ecovacs taps driving AI to beat Roomba maker in worldwide sales

Ecovacs' latest vacuum cleaner robots feature lidar sensing. (Photo by Noriyuki Doi)

NORIYUKI DOI and KANOKO SAKAMOTO, Nikkei staff writers

April 25, 2023 05:21 JST

SHANGHAI/TOKYO -- Robot vacuum companies from China are cleaning up

globally with cutting-edge features and affordable prices, as shown by the player behind
Ecovacs cleaners surpassing the maker of Roombas in sales last year.

The Chinese business, formally known as Ecovacs Robotics, is hoovering up more than
consumers. Investors are embracing the company's growth potential, sending its market
capitalization near 44 billion yuan ($6.38 billion) -- roughly five times that of U.S.-
based iRobot, the Roomba manufacturer.

"We're using automated driving technology," says an Ecovacs sales representative,

describing the the company's latest Deebot vacuums that use artificial intelligence
chips and deep learning technology to control movement.
The Deebot is powered by chips from Horizon Robotics, a Chinese autonomous driving
technology company founded in 2015 that collaborates with Volkswagen. The vacuum
also features Ecovacs' own lidar -- light detection and ranging -- sensing system as well
as a high-definition camera so it can map a home using data collected for efficient
cleaning.

Ecovacs offers a wide lineup from the entry-level model priced in the 1,000-yuan range
to a vacuum-and-mop hybrid that sells for 6,999 yuan. In comparison, iRobot's two-in-
one top-notch model, the Roomba Combo j7+, carries a suggested price of $1,099.99 in
the U.S. -- and is apparently not officially sold in China.

"It's nice that the app shows where in the room the robot has cleaned," said a 43-year-
old Deebot user from Shanghai.

Sales are surging in Japan and emerging markets in Asia, Ecovacs said.
Revenue jumped 23% to 10.1 billion yuan, or about $1.46 billion, for the first nine
months of 2022, topping iRobot's roughly $1.18 billion for all of 2022. The Chinese
company has yet to release full-year results.

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Ecovacs is steadily picking up customers from iRobot. The Roomba maker's global
market share shrank from 64% in 2016 to 46% in 2020, according to German research
firm Statista and iRobot itself. Ecovacs raised its share to 17% in 2020 from 7% in 2014.

The pioneer in robot vacuums, iRobot is struggling with a slump in the U.S. and Europe.
It began talks last August for an acquisition by Amazon.com, and the home robot maker
said in February it would cut 85 jobs, or 7% of its workforce. The American company
has fallen behind Chinese rivals in product development, not unveiling a vacuum-and-
mop hybrid until September 2022. Its share price is down about 30% from right after
the announcement of the proposed acquisition by Amazon.com.

"Roombas are overwhelmingly popular in Japan, but Ecovacs is slowly gaining fans
with high-performance models, and improvement in brand recognition will drive sales
higher," said a sales officer at a volume electronics store in Japan.

Chinese startups are rising. Roborock, backed by smartphone giant Xiaomi, now sells
robot vacuums in more than 100 markets, ranking third in global share behind Ecovacs.

Dreame Technology, ranked fifth in China, entered Japan last year after a foray into
Europe and the U.S. The company offers products on e-commerce platforms such as
Amazon and Rakuten in Japan, and plans to sell them in physical stores soon. Dreame
is building a new factory in the eastern Chinese city of Suzhou as it targets sales of over
200,000 units, including stick vacuums.

Chinese companies are buoyed by the rapid growth of their home market. The
expanding middle class helps make robot vacuums a common appliance. Qianzhan
Industrial Research Institute forecasts the Chinese robot vacuum market to more than
double between 2022 and 2026, reaching 28.1 billion yuan.
Market growth lets Chinese companies, which keep manufacturing in-house, reap the
benefit of mass production. The rise of global online shopping also helps these startup
manufacturers that do not have strong relationships with brick-and-mortar retailers to
reach consumers.

Chinese players expanding overseas face the challenge of improving name recognition
and consumer trust. In their home market, many of them operate stores so shoppers
can test their products.

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