Smarter robots to give an edge abroad

China Daily European Weekly - - Busi­ness - By ZHONG NAN zhong­nan@chi­nadaily.com.cn

Chi­nese man­u­fac­tur­ers are out­grow­ing the phase when they were mere orig­i­nal equip­ment man­u­fac­tur­ers, or con­tract sup­pli­ers, for for­eign com­pa­nies. They are evolv­ing into global-scale man­u­fac­tur­ers in their own right by investing more in re­search and de­vel­op­ment.

Suzhou-based Eco­v­acs Ro­bot­ics Co, China’s largest in-home robotic prod­ucts man­u­fac­turer by mar­ket share, ex­em­pli­fies this trend.

It is all set to ex­port its smart vac­uum clean­ers to mar­kets re­lated to the Belt and Road Ini­tia­tive, hav­ing estab­lished a strong pres­ence in de­vel­oped economies such as the United States, Ger­many, Italy and Ja­pan.

David Qian, vice-chair­man of Eco­v­acs, says many op­por­tu­ni­ties come from con­sumers’ grow­ing in­come, and rapid de­vel­op­ment of mod­ern in­fra­struc­ture and in­ter­net fa­cil­i­ties in cer­tain economies. This is par­tic­u­larly true for the Mid­dle East and South­east Asia, es­pe­cially in coun­tries such as Thai­land, Singapore and Malaysia. Growth op­por­tu­ni­ties are aris­ing from both on­line plat­forms and re­tail chan­nels.

Thanks to peo­ple’s grow­ing de­mand for robots that can per­form tasks like clean­ing the house, the com­pany saw its rev­enue from ser­vice ro­bot sales grow by 52 per­cent year-on-year to 2.87 bil­lion yuan ($420 mil­lion; 358 mil­lion euros; £318 mil­lion) in 2017. Over 20 per­cent of its rev­enue came from ex­ports. Qian plans to in­crease ex­ports so they can gen­er­ate 30 per­cent of its to­tal rev­enue by 2020.

“We use cus­tom­ized prod­ucts in dif­fer­ent mar­kets. For in­stance, the smart ro­bot vac­uum clean­ers we sold to the US have to be equipped with large-ca­pac­ity bat­ter­ies, as Amer­i­can homes are rel­a­tively larger than those in many other mar­kets,” Qian says. “Be­cause of space lim­i­ta­tion, we also found that low-noise ro­bot vac­u­ums are fairly pop­u­lar in East Asian coun­tries.”

Qian, who ma­jored in so­ci­ol­ogy and grad­u­ated from the Univer­sity of Bri­tish Columbia in Van­cou­ver, says the com­pany will con­tinue to find com­pet­i­tive ad­van­tages in prod­uct diver­sity. Lower-noise, high-end bat­tery-pow­ered prod­ucts, sen­sor ap­pli­ca­tions, af­ford­able prices and longer war­ranty are what will make the com­pany com­pet­i­tive against estab­lished global ri­vals such as iRobot and Neato.

Un­like its main com­peti­tors that out­source or con­tract out man­u­fac­tur­ing, Eco­v­acs is a ver­ti­cally in­te­grated com­pany. It does it all: re­search and de­sign, man­u­fac­tur­ing, mar­ket­ing, sales and sup­port. The com­pany spends nearly 4 per­cent of it rev­enue an­nu­ally on re­search and de­vel­op­ment, and op­er­ates two re­search fa­cil­i­ties in Nan­jing (which is fo­cused on ar­ti­fi­cial in­tel­li­gence and robots) and Suzhou.

In ad­di­tion to ship­ping smart vac­uum clean­ers to var­i­ous over­seas des­ti­na­tions, Eco­v­acs pro­duces win­dow-clean­ing and air-pu­ri­fy­ing robots. In ad­di­tion, it makes home en­ter­tain­ment and se­cu­rity robots that read out or dis­play news and weather bul­letins, en­able home pa­trols via live video streams and de­tect po­ten­tial dan­gers such as smoke or sus­pi­cious move­ments. The com­pany plans to ex­port them sooner or later.

“As floor- and win­dow-clean­ing robots have al­ready be­come ev­ery­day ne­ces­si­ties, like wash­ing ma­chines in many de­vel­oped coun­tries, and fu­ture do­mes­tic robots will be more in­tel­li­gent. Robots that just clean floors won’t be enough,” Qian says. “While mak­ing robots ver­sa­tile, it’s im­por­tant to en­sure they are easy to use.”

Since 2016, the com­pany has in­tro­duced or up­graded a num­ber of its ro­bot prod­ucts that clean floors, con­trol home ap­pli­ances, mon­i­tor house­holds and pu­rify air.

Qian says China’s con­sumer base, fast-grow­ing in­ter­net of things, tech­nolo­gies, and its 4G and 5G net­works will help the com­pany build a solid foun­da­tion for more in­no­va­tion.

That would mark a long jour­ney that started in 1998 when Eco­v­acs started as an orig­i­nal equip­ment man­u­fac­turer of tra­di­tional vac­uum clean­ers. But the Chi­nese com­pany al­ways as­pired to higher things. For seven years, it re­searched and ex­per­i­mented with home ro­bot­ics, and its first floor-clean­ing ro­bot de­buted in 2007, and proved to be a ru­n­away suc­cess in the Chi­nese mar­ket.

In 2012, the ro­bot-maker de­cided to ven­ture be­yond China and estab­lished three in­ter­na­tional sub­si­dies in San Fran­cisco, Dus­sel­dorf in Ger­many and Tokyo.

Sup­ported by over 6,000 em­ploy­ees, the com­pany op­er­ates four plants in Suzhou and Shen­zhen, and sev­eral branches around the globe, in­clud­ing Spain, France, the United King­dom, and Hong Kong.

That kind of global foot­print is in line with world­wide sales of pri­vately used ser­vice robots, which are es­ti­mated to reach 35 mil­lion units by this year-end. House­hold robots will be right at the top of the fu­ture shop­ping lists of con­sumers, ac­cord­ing to data from the Ger­many-based In­ter­na­tional Fed­er­a­tion of Ro­bot­ics.

“The com­mer­cial mar­ket for house­hold robots will be at­trac­tive in the long-run, es­pe­cially for small busi­nesses work­ing in the cater­ing in­dus­try, which is fac­ing la­bor short­ages as well as wage rise in both China and abroad,” says Sun Fuquan, a re­searcher at the Bei­jing­based Chi­nese Academy of Science and Tech­nol­ogy for De­vel­op­ment.

Given global mar­ket de­mand, many Chi­nese com­pa­nies have grad­u­ally shifted their fo­cus to high-end in­dus­trial re­search and de­vel­op­ment. This has led to tech­ni­cal break­throughs in high­tech sec­tors such as ro­bot­ics, com­put­ers, telecom­mu­ni­ca­tions and up­graded con­sumer elec­tron­ics prod­ucts, Sun says.

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