Product Innovation & User Experience Transformation
EqualOcean: What are some of the technologies or products that Xingmai Innovation is currently leading?
Wang Shengle: First, let's talk about the existing robotic pool cleaner products on the market. Compared to current robotic home cleaners, there is a significant gap in maturity and intelligence.
Traditional products lack environmental perception sensors, making it hard to detect the pool environment. However, our product adopts a brand-new concept, judging cleaning time based on the size and shape of the pool, and achieves all-around cleaning of the bottom and walls through stereoscopic cleaning technology. We emphasize three-dimensional information processing, which sets us apart from our competitors.
Additionally, our product is equipped with sonar and a navigation sensor to plan cleaning paths. We have also adopted a wireless solution, allowing users to operate it effortlessly with minimal human intervention.
Furthermore, we have developed a mobile application that displays the pool map and provides information on pool status and cleaning routes. The introduction of these technologies and features gives our product a certain competitive advantage in the market.
EqualOcean: What efforts have you made in the product development process to ensure good user experiences?
Wang Shengle: Our team has conducted market and channel research in the United States, France, and other places, gaining a true understanding of local user needs and improving our product planning and user experience.
Our logic is based on the understanding of user scenarios, combined with the actual situation, using cutting-edge technologies for innovation to create truly intelligent and user-friendly products that meet user needs. We do not advocate copying other companies products, as it may bring temporary benefits but cannot meet the needs of high-end pool users. We believe that each company should innovate based on its own products to meet the real needs of customers.
Market Selection & Pricing Strategy
EqualOcean: As you mentioned, Xingmai Innovation has focused its target market on high-end markets such as North America and Europe. Is there a specific consideration behind this? Are other regions like Latin America and Australia being overlooked?
Wang Shengle: No, Latin America and Australia are not being overlooked by our company; they are secondary markets to North America. The most crucial factor is that the United States and Europe occupies the majority share of the entire market, accounting for over 80%. Additionally, US consumers have better affordability and willingness to pay to access better products and services.
From a global market perspective, North America boasts the largest pool capacity, closely followed by Southern Europe. The strategic plan is to concentrate resources in key markets, establishing them as prototypes before expanding to numerous other global markets.
EqualOcean: Could you briefly introduce the pricing strategy and positioning of the upcoming pool robot?
Wang Shengle: Let me share our team's approach first. Our goal is to launch products that meet user needs through innovation. Most of our team members come from unicorn companies in the robotics industry, with experience in researching, manufacturing, and selling robots at a scale of over a million units.
Our pricing strategy is determined based on demand, different from the cost-based pricing strategy that many domestic companies looking to expand overseas adopt. We have conducted in-depth research on consumer needs and preferences in the target market, taking into account the product's features, performance, and quality. We aim to provide high-quality pool robots that meet the performance and user experience requirements of high-end users.
We have also had in-depth discussions with channel partners to ensure that our pricing is aligned with market competitiveness. Driving consumer purchases with strategic pricing, empowering consumers in daily Life, while ensuring sustainable profitability to fuel ongoing product innovation and continuous iteration for enhanced consumer experience. Therefore, our pricing will take into account factors such as product cost, market demand, and competitive environment.
Additionally, we will offer a product line with different configurations and features to meet the needs and budgets of consumers with different pool scenarios. This way, consumers can choose the product that suits their requirements.
Development Plan & Industry Outlook
EqualOcean: Does the company have any specific development plans and strategic goals in the coming years?
Wang Shengle: Firstly, we will heavily focus on driving the iteration and innovation of intelligent robotic pool cleaning technology to become a leader in the industry. We are very confident about the next few years. Our first goal is to enter the top three in the industry next year, and then strive to become a leading player in the entire industry within the next 4 to 5 years. By "leading player," we don't just mean being at the top in terms of sales, but also in terms of brand reputation, user reputation, and even the company value. Of course, we also recognize the importance of revenue generation throughout this process. In addition to pool cleaning, we will also focus on other consumer needs in the pool environment.
EqualOcean: Understood. Looking at the industry as a whole, the robot market is relatively small, and the Robotic pool cleaner market is just a small part of it. So, how do you view the prospects of the entire market?
Wang Shengle: Indeed, the robotic pool cleaner market is only a small part of the overall robot industry. According to the data, the robotic pool cleaner industry had a market size of around USD 1.7 billion last year, while the overall pool industry reached USD 12.1 billion, which includes products with electromechanical and electronic components, such as high-performance pumps and connected devices. However, we believe that through intelligent product iteration and innovation, the scale of the pool robot market has the potential to exceed USD 15 billion.
EqualOcean: What are your views on future robotic pool cleaner trends?
Wang Shengle: In the past, pool cleaning robots were just simple cleaning tools lacking intelligence. The number of new pools added annually reached about 500,000 to 700,000.
However, in the future, intelligent robotic pool cleaners will be able to serve people better, replacing manual labor, including the work done by third-party service companies. This will enable users to enjoy a cleaner, healthier, and safer pool environment. In such a scenario, the utilization rate of pools is expected to increase significantly.
EqualOcean: What opportunities and challenges, in your view, exist in this industry?
Wang Shengle: With a remarkable surge in 2021, the robotic pool cleaner market soared to a staggering USD 1.612 billion, boasting a growth rate surpassing 20%. Demonstrating resilience, the sector's compound annual growth rate has consistently exceeded 16.24% from 2017 to 2021. Forecasts predict a potential market size of USD 2.286 billion by 2023, showcasing an industry propelled by rapid development.
Enduring nearly four decades, the robotic pool cleaner industry boasts a select group of players, leading to heightened market consolidation. However, hindered by traditional brands detached from the core supply chain and a lack of competitive fervor, industry leaders grapple with a profound deficit in product innovation. Consequently, over two decades of industry evolution have failed to yield ground-breaking advancements in product functionality.
Unveiling publicly available data, the triumvirate of industry titans controlled substantial market shares in 2021, with 48%, 25%, and 14% respectively for global shipments of private pool cleaning robots. Presently, the dominant brands predominantly offer wired solutions, leaving ample room for significant leaps forward in cleaning efficacy and the integration of intelligent capabilities. The industry's technological front presents an abundance of untapped potential.
Casting a visionary gaze toward the future, pool robots are poised to revolutionize the consumer experience by offering a seamless synergy between human needs and technological prowess. Through labor displacement, these ingenious machines shall bestow users with immaculate, hygienic, and secure pool environments, ushering in an era of carefree aquatic leisure.
An ardent commitment propels our endeavor to expedite the industry's technological trajectory, forging industry standards and advocating for the universal adoption of wireless, intelligent, and user-friendly products. Our audacious objective for the forthcoming decade envisages elevating the market penetration of pool robots from the prevailing 21% to a remarkable 80% or beyond.
As the pervasive rise of intelligent systems becomes an indomitable force, commensurate advancements in technological prowess loom large. Where once pool cleaning tools could be conceived with a mere 500W or 1000W, the future necessitates an exponential surge in investments across funding, technology, resources, and teams. This multifaceted escalation presents a formidable test of team proficiency and resourcefulness. Amidst fierce industry competition, the crucible of excellence shall ultimately forge the path toward enhanced services and customers.