Chinese manufacturers of floor-cleaning robots are stepping up their global product strategy. The largest Chinese manufacturer, Ecovacs Robotics Ltd., has surpassed U.S. company iRobot, best known for its "Roomba," in terms of sales, with a total market value of about 44 billion yuan, or about five times as much as the latter. China is using advanced technology and affordable prices as a weapon to gain market share.
Founded in 1998, Ecovacs is the largest player in the industry, with about 40 percent of China's floor sweeper market share. Ecovacs has begun to expand overseas, with general manager Chuang Jianhua saying that operating revenue in Japan and emerging Asian markets are growing rapidly. In the first nine months of 2022, operating revenue reached 10.1 billion yuan, up 23 percent year on year. Although operating revenue for the full year 2022 has not yet been announced, the nine months have surpassed iRobot's operating revenue for the full year 2022 (approximately USD 1.18 billion).
Ecovacs is gradually catching up to iRobot in the global market. iRobot's global market share will decline from 64% in 2016 to 46% in 2020, according to German research firm Statista and iRobot. In contrast, Ecovacs' market share increases from 7% in 2014 to 17% in 2020. Ecovacs already has more operating revenue than iRobot in 2022 and is likely to quickly catch up in market share.
As a pioneer in floor-sweeping robots, iRobot's dilemma is clear. Amazon in the U.S. announced its acquisition of iRobot in August 2022, but the company's performance has deteriorated due to the economic downturn in Europe and the U.S. A layoff program of 85 people, or 7% of the workforce, was announced in February 2023. The release of a model that can vacuum and mop with only one unit was in September 2022, and it also lags behind Chinese companies in product development. The current share price is down 30% since the announcement of the acquisition.
The rise of Chinese startups is also notable in the global floor-sweeping robot market, where Roborock, founded in 2014 with funding from smartphone giant Xiaomi, is sold in more than 100 countries worldwide. It ranks third in global market share behind Ecovacs.
China has the advantage of a fast-growing domestic market. As the middle class expands, floor-cleaning robots, which help ease the burden of household chores, are entering a period of popularity. Chinese research firm Foresight Industry Research Institute predicts that China's floor cleaning robot market will reach 28.1 billion yuan by 2026, more than doubling from 2022.
Chinese manufacturers, who mainly rely on in-house production, are inclined to take advantage of market growth to achieve economies of scale. Globally, e-commerce has become mainstream, lowering sales barriers for emerging manufacturers who are alienated from offline stores, which has become a major boost to promoting their products.