"The Lonely Economy of Young Women: Entrepreneurs Leaving Big Companies Eye Companion Robots | Focus Analysis"

Author | Ye Danxuan

Editor | Yuan Silai

Entrepreneurs from major hardware companies are flocking to the embodied companion robot track.

In just the past month, two well-known players have newly entered the embodied intelligence field, both betting on companion robots.

On December 23, after announcing his resignation, Guo Renjie, the former China regional executive president of Dreame Technology, quickly established an embodied intelligent robot company and completed the first round of financing. The investors include IDG Capital, Matrix Partners China, ZhenFund, and Monolith, etc.

In December, it was also reported that Jiang Xu, the former senior algorithm director of OpenAI, founded the robot company "Light Robotics", mainly creating TO C embodied intelligent companion robots to provide companion services in the directions of home services, medical and health care, education and training, etc. through perception, learning and interaction with the environment.

Several industry insiders in the embodied intelligence field told Yingke that the consumer-level companion robot track has become a popular choice for senior executives of major companies to start businesses in recent years, and it is also one of the most promising industry directions in the investment market in the second half of 2024.

Sun Zhaozhi, the former product design director of Xiaopeng Robotics, founded Luobo Intelligence, focusing on "AI trendy toys" as positioned products, and it is expected to be released and mass-produced in 2025. He Jiabin, the former head of the PICO Beijing ID design team of ByteDance, founded Mengyou Intelligence. They also exhibited the home robot pet Ropet at this CES and expect to deliver the first batch of products to Kickstarter crowdfunding users in March this year.

However, the embodied intelligent robot track is still in a very early stage. Especially for TO C consumer-level robots, no mature products have emerged in China, and the response of the C-end market remains to be tested. What users to accompany, what functions users need, and in what product form to land are all issues that this attractive new blue ocean is exploring.

01 Behind the Boom of the AI Companion Track: New Emotions, New Demands

"Consumer-level companion robots are mostly businesses targeting women." An industry insider summarized to Yingke.

Sun Zhaozhi, the founder of Luobo Intelligence, revealed in an interview that the "AI trendy toy" companion robot that the company is about to launch mainly serves young women.

He Jiabin, the founder of Mengyou Intelligence, also told Yingke that the target audience of the new product Ropet is mainly women aged 27 - 35. On the Kickstarter platform where there are mostly male Geeks (enthusiasts of technology products), women still account for 60% of the transaction users, and it is expected that the proportion of female users will be even greater after the public release.

Sun Zhaozhi found that the heavy users of AI companion software such as Character AI, Xingye, and Talkie are women of Generation Z, where heavy users refer to those who chat more than 200 rounds in the software every day and immerse for more than 3 hours. An investor who has been paying close attention to the embodied intelligence field also confirmed to Yingke that currently, the data of AI emotional companion software on the market shows a highly unified trend, with the vast majority of users being women.

Having a higher demand for emotional value is generally considered the reason why female users have become the main consumer force of companion products.

An interesting coincidence is that "Pop Mart" is a case that industry insiders will cite when talking about companion robots. Pop Mart, which has achieved remarkable performance in recent years, and the "emotional economy" behind it seem to have become the common source of inspiration for entrepreneurs and investors in the companion robot field. Yingke's research found that in recent years, the terms "emotion", "companionship", and "healing" have frequently appeared in the new product publicity copy of Pop Mart.

Data also supports the huge commercial potential of the "emotional economy". Meituan data shows that by the end of 2023, the search volume for the "healing" topic has increased by 256%. At the same time, with the expansion of the trend of social atomization and the intensification of survival pressure, how to deal with loneliness has become an increasingly common issue.

The market for companion robots has already been verified in the lonelier Japan.

He Jiabin disclosed to Yingke that the team's research found that Japan is currently one of the markets with the richest variety and the highest usage degree of companion robots. The thousand-day DAU of the well-known pet robot LOVOT can reach 90%. In other words, 90% of users will use companion robot products for three consecutive years. According to industry insiders' observations, the average daily usage time of LOVOT exceeds 60 minutes.

In June 2023, LOVOT entered the Chinese market and opened its first offline store in Shanghai, while also entering Li Jiaqi's live-streaming room. The starting price of a single unit is 29,800 yuan, and an additional subscription fee of 880 yuan per month is required, including software service fees and maintenance insurance fees. Public information shows that the high-paying target customer group of LOVOT is women around the age of 40.

On social platforms, many female users who have experienced LOVOT in offline stores in Japan or Shanghai said that its appearance and design are very different from the previous generation of companion robot "robot dog", and they will have a strong desire to purchase after the experience. The currently released first-generation product, due to the limitations of the visual sensor hardware at that time, has an external camera placed on the top of the body for user interaction perception. Some potential consumers who are in a wait-and-see attitude said that the appearance and price are the reasons for not purchasing yet, and if the second generation improves in appearance, they will consider purchasing.

02 A "Necessarily" Attractive Business

"In the second half of (2024), the popularity of the TO C companion (robot) track is inevitable." The aforementioned investor told Yingke.

Different from B-end industrial robots that have been widely used in the industrial field, C-end robots have not yet explored more landing forms. "At present, for C-end robots, we can even not talk about market education, (because) it is still in the stage of creating a market." The investor said that the only successful TO C robot that has emerged currently is in the cleaning scenario (indoor, courtyard, swimming pool). The basis for the success of cleaning robots is the technological spillover in the field of autonomous driving. Similarly, it is also because of the breakthroughs in large models and embodied intelligence technology in 2024 that the capital market believes that TO C companion robots have the possibility of emerging.

The most intuitive result brought about by the technological spillover of large models is the reduction in model prices. In May 2024, Volcano Engine announced that the price of Doubao pro - 32k was reduced to 0.0008 yuan per thousand Tokens, a 99.3% decrease compared to the industry average. Subsequently, Alibaba, Tencent, iFLYTEK, etc. followed suit with price reductions.

In addition, the investor told Yingke that among the daily Tokens of Doubao, TO C companion toys account for a considerable proportion. "It can be understood that the current capabilities of large models can basically fully support TO C companion products."

It is worth noting that the technological spillover of large models, to some extent, also means that there has been a winner-takes-all situation in the application of AI on the software side, "There are not many opportunities for software applications." The aforementioned industry insider believes that in the first half of 2024, the capital market mainly focused on the AI underlying model and its software applications. However, as the control degree of the head players over the market increases, it is difficult for domestic entrepreneurial teams to find obvious advantages.

The advantage lies in the hardware side. "The supply chain gene in China is very strong, the cost control of the hardware supply chain can be done very well, and hardware practitioners also have rich market exploration experience." The industry insider said.

But even if the domestic supply chain has an advantage, the product prospects are not yet clear. Public data shows that since its release in 2019, the global total sales of LOVOT are less than 20,000 units. The financial data of its development company GROOVE X shows that it was still in a loss-making state in the fiscal year 2023, with a net loss of nearly 2.7 billion yen (approximately 126 million yuan) for the current period, slightly narrowing compared to the previous year. At the same time, the company's accumulated deficit has reached 8.5 billion yen. (approximately 395 million yuan)

The huge loss of LOVOT is probably due to the product being too expensive.

Mengyou Intelligence and Luobo Intelligence, as two major players with physical products for sale, have both drawn some lessons from LOVOT. Yingke has learned that the Ropet launched by Mengyou Intelligence is priced at $199 on Kickstarter, and the market price for public sale is $299. Sun Zhaozhi also said that the products of Luobo Intelligence will not compete in the same price range as LOVOT. At the same time, the age positioning of the target population of the above two products has also been appropriately lowered on the basis of LOVOT, focusing on younger female groups.

The huge imagination space of the TO C business and its "light assets" are being repeatedly mentioned. Many practitioners in the embodied intelligence field told Yingke that the current application scenarios of embodied intelligence are still concentrated in the B-end, but the B-end business is not easy to do: enterprises are extremely demanding in calculating ROI, the decision-making process is long, and it is extremely difficult to acquire customers; at the same time, the delivery cost of the B-end business is also quite heavy. "You can see that many TO B robot enterprises are having difficulty in making profits now, and a very important reason is that they cannot find a way to reduce the delivery cost." An investor who has been paying close attention to the robot track told Yingke.

A fact confirmed by both investors and practitioners is that in the second half of 2024, the wind direction of the investment market has reached a consensus: to combine the domestic hardware gene to find application scenarios in the C-end. Hardware has once again become the new focus of the capital market.

However, at least so far, this business in China still remains on paper. "LOVOT still uses the previous generation of AI technology and has not connected to the large model." Sun Zhaozhi mentioned in the interview.

Behind the poor financial data of LOVOT, there may also be another more difficult reason: the real product demand is not so strong. Although users have expressed a desire to purchase, this kind of product that provides emotional value is more subtle and elusive. Everyone is waiting for a product to test the temperature of the real consumer market, and this year will be a crucial time point.