The large-screen refrigerator you spend money to buy automatically plays advertisements, allowing consumers to enjoy the elevator treatment at home.
This magical function of Yunmi refrigerator has caused complaints from many consumers, and has caused huge controversy like the mandatory 30-second boot advertisement of smart TVs. Behind the Yunmi refrigerator is Yunmi Technology, a smart home rookie with a bright future and a leader in the Xiaomi ecological chain.
From the day it was born, it has been deeply imprinted with the "Xiaomi model".
In 2014, Xiaomi is promoting a 1.266 billion strategic cooperation with Midea. Chen Xiaoping is appointed as the vice president of technology of Midea’s Life Appliances Division and the general manager of the rice cooker company.
Before and after the cooperation was concluded, Xiaomi co-founder and vice president Liu De led his team to visit Midea Group and met Chen Xiaoping unexpectedly.
At that time, Chen Xiaoping had worked for Midea Group for 15 years, working his way up from the grassroots to senior management and developing profound insights into many home appliance categories.
During the chat, Liu De and Chen Xiaoping talked about that almost all water purifier products on the market at that time had water leakage problems. Liu De believes that water leakage is a typical industrial-level pain point. If it can be overcome, Xiaomi can enter the water purifier industry.
Chen Xiaoping suddenly said to Liu De: "Brother De, come and invest in me, and I will do the work."
Although Chen Xiaoping has no experience in water purifier research and development, he is a professional after all. As a veteran with 15 years of experience in the home appliance industry, Liu De agreed to invest without hesitation. Yunmi Technology was established in May 2014 and became a screw in Xiaomi’s smart home landscape.
The water purifier industry basically undergoes innovation every five years. But on the other hand, Yunmi’s founding team of dozens of people has no experience in water purifier research and development. If it cannot come up with a solution as soon as possible, it is very likely to be left behind by the speed of market iteration and miss the opportunity.
Under such anxiety, Chen Xiaoping led a group of employees to discuss three sets of technical solutions and chose the "three bets" strategy. Since Yunmi could not afford the risk of starting over after failure, the R&D personnel gritted their teeth and pushed forward three sets of plans at the same time, conducting parallel trials and errors.
With dozens of employees working overtime, the first-generation Xiaomi water purifier manufactured by Yunmi was officially launched in July 2015, which took just over a year.
This approach of following the trend of the industry is exactly in line with the trend theory advocated by Lei Jun in his early days: "To start a business, you need to be a pig standing on the trend" and "go with the trend."
The book "Xiaomi Ecological Chain Battlefield Notes" writes that Xiaomi water purifier adopts an innovative "integrated waterway" design, and more than 400 patents were formed during the design process, including more than 100 It has an invention patent and the innovation rate of parts and components has reached over 90%. It is known as promoting the major innovation of the entire industry every five years.
In addition, this water purifier is priced at 1,299 yuan, which is much lower than similar products on the market at that time, such as the Midea water purifier priced at 2,499 yuan and the Qinyuan water purifier priced at 2,999 yuan. device.
With its good user experience and low price, Yunmi became famous in one battle.
But just six years later, consumers’ impression of Yunmi has completely reversed: from an upstart water purifier with a sense of technology to a big liar that is just “bad money for advertising”.
Currently, there are countless complaints about Yunmi products on various forums; so far in 2021, the company’s stock price has fallen by 70% and is hovering around $5; the recent refrigerator advertising door has once again made Yunmi was whipped.
(Yunmi 5G Internet Refrigerator)
Liu De used to like to use the "bamboo forest effect" to describe the relationship between Xiaomi and ecological chain companies.
"Today's Internet companies are more like bamboo. As long as the time is right, it can grow after a night of spring rain."
In the early stages of growth, companies in the Xiaomi ecological chain, with Xiaomi's model and traffic Relying on and channels, they spread and grow with each other. Many businesses are indeed like bamboo forests, growing overnight.
However, although the bamboo forest grows quickly, it is delicate. The roots of bamboo usually grow horizontally instead of rooting downward to resist wind and rain. They are shallowly embedded in the soil and grow more slowly in the later period. They have higher requirements for soil and moisture.
Once separated from the group and suitable environment, bamboos will have problems.
Soon after the water purifier became famous in 2015, Yunmi embarked on a road of "de-milletization". Not only is it trying to get rid of the single identity of "manufacturing for Xiaomi", but it even wants to become another Xiaomi.
In 2016, 2017, and 2018, Yunmi Technology launched 17, 18, and 11 product lines respectively. The products extend from kitchen water purifiers to living rooms, bathrooms and other living spaces.
On September 25, 2018, a bell rang and Yunmi was listed on the NASDAQ in the United States, announcing the birth of "China's first home Internet of Things".
Chen Xiaoping, the proud founder of Chunfeng on the stage, said that he would like to express his gratitude to two people: the first is Mr. Lei Jun of Xiaomi, and the second is Mr. Fang Hongbo of Midea. Lei Jun allowed him to systematically learn Internet methods, and Fang Hongbo's years of work experience cultivated his industrial experience. "The combination of the two created today's Yunmi whole-house Internet home appliances."
By 2019, Yunmi simply released an open IoT (Internet of Things) system, changing the business model from selling home appliances Transforming into providing home IoT solutions, it also released an IoT chip code-named "Wukong".
To put it simply, from the perspective of business layout, Yunmi has almost transformed into another Xiaomi in addition to not making mobile phones in the past few years. If Mijia is the smart home “grocery store” launched by Xiaomi, then Yunmi can be called the “grocery store among grocery stores.”
It’s easy to understand why Chen Xiaoping wants to get rid of Xiaomi.
According to the agreement signed between Yunmi and Xiaomi, the water purifiers and supporting products provided by Yunmi to Xiaomi are specially designed for Xiaomi and can only be sold to Xiaomi. In addition, the retail prices of related products are determined by Xiaomi and Yunmi. The meters are jointly set according to the high cost-effective strategy, and the gross sales profit is shared by both parties in a 50:50 ratio. On the other hand, as mentioned earlier, the price of water purifiers manufactured by Yunmi is lower than similar products.
Yunmi Water Purifier's profits were thinned as it entered and exited. The prospectus released by Yunmi Technology in 2018 shows that in 2016, 2017 and the first half of 2018, the gross profit margin of its intelligent water purification system was 23.4, 30 and 33.2 respectively. In comparison, the gross profit margin of domestic water purifier manufacturers such as Bishuiyuan and Sunrise Oriental exceeds 40%.
After becoming famous through Xiaomi channels, it is not uncommon for Xiaomi ecological chain companies to use their own brands to increase profit margins. However, unlike No.9 Robot, Stone Technology and other ecological chain companies that set up new brands around their original products, Chen Xiaoping has repeatedly emphasized that Yunmi’s positioning is to be a “whole-house smart Internet”. It is obviously difficult to achieve this goal by just making a water purifier.
Therefore, like Lei Jun, aiming at the entire smart home track and fully attacking the product line has become Yunmi’s only choice. However, this road is not easy.
Currently, Yunmi has more than 60 product lines. Judging from the complete range of product categories, it is almost comparable to Chen Xiaoping's old employer Midea Group.
However, from the perspective of consumer feedback, Yunmi is suspected of being "comprehensive in everything".
Searching for Yunmi refrigerators, Yunmi washing machines, and Yunmi range hoods on the consumer service platform "Black Cat Complaints", the number of complaints as of October 26 was 190, 106, and 57 respectively, of which the majority Some are complaints about various quality issues such as rupture of the refrigerator liner, abnormal noises from the air conditioner, and smoke leakage from the range hood. They are also mixed with complaints about inadequate after-sales service.
Consumer Bai Wensi described to the market that the Yunmi large-screen refrigerator he purchased had problems such as the voice assistant not commanding dialogue after one month of use. During the after-sales process, the officially promised 24-hour or 48-hour door-to-door maintenance often lags for about a week. The master did not completely solve the problem after two visits, so he had no choice but to replace it with a new one. "The after-sales service is very slow, and it is difficult to repair this kind of smart thing. My family is currently using a new refrigerator. If there is a problem in the future, I don't want to do the after-sales service again. It's too troublesome," she said.
Yan Yu, a senior practitioner in the home appliance industry, analyzed that the frequent quality problems of Yunmi products are inseparable from the foundry model adopted. Yunmi Technology describes its business model as an asset-light model, which is different from the integrated research, production and sales of Midea and Gree. Instead, it outsources most of the product production to foundries, and outsources the transportation, logistics, installation and after-sales of the products. Services are outsourced to third party service providers.
(Yunmi dishwasher)
Yan Yu told the city: "OEM is an innovative production method, and there is no problem in itself. Enterprises do not need to invest huge amounts of money. Investing money in building factories can focus on product research and development. For example, in the field of mobile phones, there are several well-known foundries in China, and they are very professional. However, in the field of home appliances, there are no specialized foundry companies in China, and those who do OEM work are often the ones. Third-tier companies are unable to gain large sales and reputation in the market for their own products. They do OEM work for others. They do not have strict standards in terms of workmanship and quality control, and the client may not be able to supervise it in place. "
Yan Yu mentioned that Yunmi washing machines are OEMed by Nanjing Skyworth, Yunmi range hoods are OEMed by Hesheng (Guangdong Hesheng Electric), and Yunmi refrigerators are OEMed by Hefei. Xueqi Electric, Foshan Xiaoxian Internet Electric, Nanjing Skyworth.
Searching market data, the rankings of the above four OEMs in each product field in 2020 are all behind the top ten.
The OEM model has brought about problems of uneven product quality and inadequate after-sales service, but Yunmi has still found a group of loyal users by virtue of its price advantage.
Li Zhengqi, a consumer who just bought a Yunmi refrigerator, became a fan because of this. He mentioned: "After comprehensive consideration, under the premise of the same configuration and space, no other refrigerator is better than Yunmi." Cheap. ”
Judging from the data, there are not a few people who recognize Yunmi’s cost-effectiveness strategy. The epidemic in 2020 spurred the smart home market to explode, and Yunmi, which had deployed in advance, caught up with the trend. Its annual revenue increased by 25.3% year-on-year, and the total number of home users exceeded 5.1 million. Yunmi Chen Xiaoping once publicly stated that the user referral rate of the Yunmi brand is as high as 28, which means that new users of Yunmi 28 are converted through word of mouth.
In fact, this model of getting consumers to pay by relying on cost-effectiveness, converting consumers into fans, and then obtaining sales growth through fan recommendations is one of the methods that Xiaomi is familiar with.
"Sales and Marketing" magazine once summarized the early "Xiaomi model" into five points, namely the development of fan economy, online and offline interconnection, creation of "hot product" model, social marketing, and event marketing. .
It is undeniable that in the early days, Xiaomi did quickly open up the market with the above five points. However, "Sales and Marketing" magazine also mentioned that Xiaomi conducts marketing in various ways on the premise of "accurately meeting the needs of different users and putting a lot of effort into the process of making products."
In contrast, Yunmi, which lacks phenomenal hit products and whose advertising refrigerators ruin its popularity, obviously lacks the "skills" to compete with Xiaomi.
Li Hui, a researcher in the smart home industry, believes that kitchen appliances with screens actually have real market demand. “For example, if someone rings the doorbell while you are cooking, if there is a screen on the range hood, you can display the visual The images on the doorbell are migrated. "However, compared to being a doorbell, browsing Douyin and watching videos are non-essential functions and add unnecessary costs.
Li Hui revealed to the city that Midea has launched a high-end range hood with a screen. The cost of the small screen is around tens of yuan, which will not significantly increase the overall cost of the range hood. .
Liu Buchen, a senior observer in the home appliance industry, believes that the vigorous marketing strategy adopted by Yunmi is outdated. “Yunmi imitated Xiaomi’s Internet marketing in the early days, but today, Xiaomi has gradually abandoned its early concepts and turned to technology companies. Transformation, while Yunmi, as an imitator of Xiaomi, still remains stuck in Xiaomi’s early operating concepts and methods.”
This is also reflected in Yunmi’s performance. In 2020, Yunmi Technology’s research and development expenses were 266 million yuan, which was spread over more than 60 product lines, and each category could get more than 4 million yuan. funds. Wang Lei, who has been engaged in research and development in the smart home industry, told the city that the scale of this research and development is relatively small. "There is a big gap not only with giants such as Midea and Gree, but also with lower-ranked companies such as Changhong."
In 2018, 2019, and 2020, Yunmi’s sales and marketing expenses were 3.06 times, 2.59 times, and 2.24 times its research and development expenses respectively.
Against the background of vigorous marketing, Yunmi Technology's gross profit margin showed a "three consecutive declines" trend from 2017 to 2020, which were 31.5, 28, 23.3, and 18.6 respectively. This shows to some extent that for Yunmi, Xiaomi’s old path is not good and difficult to follow.
Negroponte, the author of "Digital Survival" and a professor at MIT, once said: "The innovation in the Internet of Things era should be to put a chicken in the microwave oven. The microwave oven itself knows how to cook the chicken. , instead of turning on the microwave oven through your mobile phone. ”
In the red ocean market of home appliances, smart home is indeed a good entry point. However, there are established strong players like Gree and Midea in the market, and then there is Xiaomi, which has top-notch supply chain integration capabilities. If it wants to become a game-breaker, Yunmi also needs to achieve technological innovation like "a microwave oven that can cook chicken."
(Bai Wensi, Li Zhengqi, Wang Lei and Li Hui are all pseudonyms in the article)
Reference materials:
1. "Xiaomi Ecological Chain Field Notes", Xiaomi Ecological Chain Granary Academy
2. "Xiaomi Model 3: Yunmi Technology, Blooming in More Points", Founder Securities
3. "Yunmi's large-screen refrigerator turns into a large-screen advertising machine, causing controversy , are home appliances with screens “pseudo-smart”? 》, Interface News
(Author Dong Wenshu Editor Li Shuguang)