Morus:Born as a Global Brand

Over the past 40 years of reform and opening-up, China has continuously promoted its opening-up policy while practicing innovation, which has created opportunities for outbound investment. After joining the World Trade Organization (WTO), China has accelerated its opening-up process and realized the historical turn from "introducing" to "going out" and from following to leading.

As China's economy enters a new phase of steady growth, overseas markets become more attractive than in the past amid intensifying domestic volatility. In addition, the national government and relevant departments have been issuing a series of favorable policies in the field of international expansion. Besides, the increase in the level of openness towards the outside world has further motivated domestic brands to enter overseas markets. Lastly, the increasing improvement of the digital economy infrastructure including supply chain, mobile social commerce, the Internet and the rise of logistics, payment, SaaS/ERP and other tools have directly reduced the cost and significantly increased the convenience of going abroad.

As we enter 2023, EqualOceanqualOceanualOceanualOcean is excited to present the "Global 100: Go Global and Co-creating the Future" series, in which our analysts will sit down with frontline industry practitioners and enterprise leaders to gather insight on globalization of Chinese brands. We hope to help brands be seen, recognized and valued through our professionalism and credibility.

The following is the ninth piece in this series, conducted by our analyst Yiran Xing after her talk with Nelson, CO-founder of Morus (Chinese: 木卫).

Founded in 2017, Morus (Chinese: 木卫) is a Shenzhen-based home appliances innovation startup. The company specializes in research and development, production, sales and services in the field of clothing care. Its core members come from well-known technology companies such as DJI and TCL.

Morus Zero, the featured product, has patented drying technology that involves a specially designed BLDC motor, multiple sets of sensors, and intelligent control programs. It can automatically adjust the pressure, heating power, and other parameters during the drying process to accelerate the evaporation of water and dry clothes efficiently.

Starting its business journey on crowdfunding platforms, Morus now sells its products in China and Japan, with plans to continue global expansion in the future.

EqualOcean: What motivated you to take your products onto crowdfunding platforms?

Morus: We went on Kickstarter and Indiegogo in 2019 and Makuake in 2021. Funding was never the only goal when we presented our projects on crowdfunding platforms. We wanted to test demand for our new product, promote the brand, and get feedback from potential customers for the iteration of products. In the process, we also found seed users, PR resources, and potential opportunities for business collaboration.

EqualOcean: Why did Morus choose Japan to be the first stop for overseas expansion?

Morus: We decided to launch our products in Japan because we believe that we would have higher growth potential in the Asian market. Clothes dryers are commonly used in the USA and European countries. The penetration rate of dryers is 90% in the USA. In Asian counties, however, only a few households have clothes dryers at home because of a very different clothes-drying habit. In the beginning, when we tested our products on Kickstarter, we didn't expect Asian consumers to place orders, but it turned out they did in spite of the USD 200 delivery cost. Surprisingly, we found that the demand for clothes dryers in the Asian market is high, with over 100 of the 2,000 orders from China, Japan, and Korea.

EqualOcean: Most companies expand their business at home before going global, while Morus is selling its product overseas from an early stage of its development. Did you start up with the goal of making Morus a global brand?

Morus: Yes. Morus's business started in markets outside China. With the sales performance on crowdfunding platforms we determined which markets to start with, and then we adopt different strategies for different markets. For example, there is still a huge demand in the US market, thus we need to emphasize the uniqueness of our products in order to stand out from the competition. While in the Asian market, we need to attract consumers and stimulate demand by investing in branding.

EqualOcean: Will Morus focus more on its overseas business or domestic one?

Morus: I would say 50/50. It's actually easier to expand sales and marketing channels in China, but overseas we face multiple challenges.

EqualOcean: How do you see the 2023 market outlook in China?

Morus: Our overseas expansion plans in 2021 had to be postponed because of the pandemic. And our domestic production has slowed over the past two years. Especially in Q4 2022, the peak shopping season, we had to face a delay in production caused by the first wave of infection after the relaxation of COVID-19 measures. Speaking of the future, I think that the road to recovery is still bumpy after the easing of restrictions, but in the long run, the shift in policy will bring promising future growth.

EqualOcean: We noticed that Morus has only one product at the moment. We wonder if you were considering developing other products.

Morus: Morus's brand positioning revolves around clothing and fabric care, including the washing, drying, ironing, and folding of clothes. We wish to solve these needs by adding new functions to our product. The iteration can not be done overnight, of course. R&D takes time. Morus's long-term goal is to provide smart clothing care solutions.

(Morus Zero)

EqualOcean: What are the unique selling points of Morus's products?

Morus: The unique selling point of our product is the patented drying technology. We dig deep into what consumers need and invest in product innovation rather than simply marketing an idea. We value consumer experience and their feedback. And we have done research during the R&D process to understand the shortcomings of traditional dryers and the unmet needs of consumers.

EqualOcean: What are the major changes in the market that you operate in?

Morus: We displayed our product via some offline channels in Japan, and we noticed that offline store traffic has been steadily increasing since EqualOcean3 2021 and has risen to 80% of pre-pandemic levels in Q4 2022. I believe that a fast rebound could be expected in offline retail in the Japanese market. Offline channels are important for the sales of home appliances in Japan, as e-commerce platforms still had limited traffic. Also, clothes dryers are not popular in all seasons. We usually see higher demand from March to June or in winter and online sales would be great in these seasons. When there are no shopping festivals, offline sales outperform online ones.

EqualOcean: Do you plan to sell your products on Amazon or other platforms? Will Morus have its own e-commerce platform or offline stores?

Morus: It depends. In Japan, we sell our products on our own e-commerce website, but in China, consumers are more used to shopping on major e-commerce platforms, so we don't launch our own platform. We might open offline stores in the future, as offline display is important for home appliances.

EqualOcean: The market of home appliances could be impacted by the real estate market. While the real estate sector in China is struggling, how does Morus withstand its impacts?

Morus: Our clothes dryer is a rather small appliance and it is not considered one of the basic white goods, so Morus didn't take a big hit from the sluggish real estate sector. We are still witnessing growth in demand. We follow closely on the penetration rate of clothes dryers in China, with the hope of a dryer boom in  3 or 5 years. And maybe the real estate sector will have rebounded by that time. We believe that if our product is good enough, we will be able to attract consumers and maybe create a trend for a new drying routine.

EqualOcean: Would you share with us the penetration rate of clothes dryers in China?

Morus: Sure. The figure stood at 0.8% in 2018. And now the penetration rate of clothes dryers in China is over 1% and that of washer dryers is 5%.

EqualOcean: Would you share Morus's future plans?

Morus: Morus will continue to invest in global expansion and might open branch offices overseas. We believe that localized, tailored marketing solutions are key for companies going global in the coming years, and local staff recruitment and management are also an important part of the process.

About EqualOcean

EqualOcean focuses on serving Chinese companies in their road to globalization and helping overseas companies and organizations to grasp China's development opportunities. It believes in the value of globalization, with the mission of connecting China and the world.

For Chinese clients with globalization needs, EqualOcean provides overseas market and industry research, international branding, data products, and overseas resource-building services. For overseas clients who want to grasp China's development opportunities, EqualOcean provides Chinese market and industry research, investment target due diligence, data products and resource-building services.

EqualOcean continues to focus on globalization and invites professionals from various industries to provide valuable information and opinions by contacting nina@equalocean.com. We also welcome companies that need to expand internationally or want to exchange overseas-related topics to contact us directly.

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