Caixin.com News on November 10th (Reporter Wang Biwei): The news of DJI's upcoming entry into the sweeping robot market has raised concerns in the market, as it poses a strong competitor to Beijing Roborock Technology (688169.SH) and Ecovacs Robotics (603486.SH).

Several interviewed industry professionals told Caixin.com reporters that based on DJI's long-standing technical expertise in areas such as algorithmic navigation systems, it has a certain advantage in entering the sweeping robot market, 'However, even if DJI has great 'talent,' it takes a long time to accumulate in order for the sweeping robots to perform well in obstacle avoidance and route planning.' A top sweeping robot enterprise executive told Caixin.com reporters.

The 'top effect' of the sweeping robot market continues, according to AVCLOUD data, the concentration of brand CR5 in the sweeping robot market from January to April this year was 90%. In this situation, domestically, the top five players in market share, including Ecovacs Robotics, Beijing Roborock Technology, Xiaomi (01810.HK), Cloud Whale, and Zmile, enjoy a solid position.

DJI enters the game! Will it change the sweeping robot market landscape?

Recently, a latepost report stated that DJI has been developing sweeping robots for four years, and if all goes well, they are expected to be released in mid-next year, with pricing close to high-end sweeping robots on the market.

In response to this, DJI told other media, 'DJI's products are updated and optimized very quickly. In order to ensure the accurate and precise transmission of information to users, we do not comment on unreleased products or related rumors.'

Even though DJI has not explicitly responded to the product progress, the news of its potential entry still throws a bomb into the long calm sweeping robot market, sparking discussions on whether it will affect the currently relatively stable market landscape of sweeping robots.

After more than ten years of development, the top brands in the floor-sweeping robot market are now highly concentrated. According to data from AVCLOUD, the top 5 brands in domestic floor-sweeping robot sales market share from January to August are Ecovacs Robotics (22.22%), Beijing Roborock Technology (20.29%), Xiaomi (15.80%), Cloud Whale (14.84%), and Siasun Robot&Automation (11.23%).

Many interviewees believe that DJI has certain inherent advantages in entering the floor-sweeping robot market. "Relying on DJI's long-term accumulation in fields such as flight control and in-vehicle systems, its algorithmic navigation system may be better than what a few companies are currently doing, but the current companies are also doing well. However, in other areas such as electric machines, DJI is not able to form a significant advantage." Cleaning appliance expert and General Manager of Suzhou Roncai Innovation Technology Co., Ltd. You Danny told Caixin reporters.

"DJI's technological accumulation has indeed helped in entering the floor-sweeping robot market, but it will take a long time for the product to stabilize and even open up the market." A top floor-sweeping robot industry professional expressed a similar view to the reporters.

Regarding concerns about the impact of DJI's entry on market share, a person from Ecovacs Securities responded to Caixin reporters, "Currently, due to the high technical barriers in the industry, the market is still dominated by a few leading companies with a high market share. The core technologies of floor-sweeping robots mainly involve chips, modeling methods, laser navigation, cleaning ability, and obstacle avoidance.

You Danny further stated that DJI's entry can be divided into two scenarios: the first is DJI's brand entry, and the second is the entry of investing companies. The impact on the market landscape is different for these two scenarios. "If it's a company that invests, there may be differences in competitiveness, talent, and resources compared to the DJI brand. If it is DJI's brand, the influence may be relatively greater, but it also depends on whether DJI can continue to invest in this product line."

"Overall, consumers of DJI floor-sweeping robots are expected to be concentrated among users who already have a favorable impression of the DJI brand. It is unlikely to have a significant impact on the current established brands in the short term." You Danny said.

However, the above-mentioned top floor-sweeping robot industry professionals still have a positive attitude towards DJI's entry. "DJI can bring its fans into the floor-sweeping robot category, attracting more companies to enter this industry, increasing industry attention, and expanding the industry cake, which is a good thing."

Facing a growth dilemma, the overseas market becomes a major focus.

"It is quite difficult to promote this category, as it is all existing users, and everyone is competing among these young people who are already here. Only some particularly adventurous individuals would try out new entrants like DJI." The above-mentioned head of a sweeping robot company told Caijing Society as a reporter.

Previously, some analysts believed that due to the low penetration rate of floor-sweeping robots in the domestic market, which is only about 6% according to Statista, there is still huge potential for growth in the domestic market for floor-sweeping robots.

However, many interviewees do not agree with the so-called huge potential in the domestic market. You Danni told the reporter that in the short term, floor-sweeping robots are unlikely to have the same popularity as traditional home appliances like refrigerators.

Looking at the data, over the past few years, the shipments of floor-sweeping robots in the domestic market have not increased but decreased. Data from AVC Cloud showed that the shipments in 2022 and 2023 were 4.41 million units and 4.58 million units, respectively, much lower than the 6.54 million units in 2020.

"Over the years, the overall number of floor-sweeping robots in China has not changed much. There are two main reasons for this. Firstly, the high unit price, often around two to three thousand yuan; secondly, there are requirements regarding the area of the house, making it difficult for floor-sweeping robots to perform well in houses under 90 square meters. If the floor-sweeping robot industry wants to further increase its penetration rate, it may need further iterations in its form." You Danni said.

In this situation, going global has become an important means for floor-sweeping robot companies to gain incremental growth. "For growth, we can only look at going global, as the domestic market has already become a bloodbath." You Danni said.

Recently, the overseas strategy of top brands has been made clear. According to financial reports, in 2023, Ecovacs Robotics' overseas business grew by 20.1% year-on-year, while Beijing Roborock Technology's main business overseas income increased by 21.4%. According to the latest data from the General Administration of Customs, in the first quarter of 2024, the export value of vacuum cleaners was 9.16 billion yuan, a year-on-year increase of 28.5%, with an export volume of 35.08 million units, a year-on-year increase of 20.9%.

Whoever can dominate the high ground in new markets will be the key to competition for clean appliance manufacturers in the latter half. According to IDC's "Global Smart Home Devices Market Quarterly Tracking Report for the Second Quarter of 2024", global shipments in the current quarter increased by 73.3% year-on-year, Xiaomi increased by 16%, Roborock increased by 8%. However, the previously high market share American brands iRobot and Ecovacs have declined by 6% and 9.4% respectively.