Chinese Robot Vacuums Sweep Global Rivals with High Tech, Low Prices

China Ecovacs beats US Roomba maker in worldwide sales

8428.70 - Industrial robots (HS Explanatory Notes)

8479 50 00 – Industrial robots, not elsewhere specified or included

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 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.

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 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.