Former Huawei engineer enters the niche hardware track, with an annual sales volume of 500 million yuan | Insight Global

Written by Lin Qingqing

Edited by Yuan Silai

When going global becomes a core strategy for a Chinese company, how to conquer the global market becomes an extremely professional topic. In the evolution of globalization, many Chinese brands have emerged as leaders. In view of this, Hardcore Technology has launched the "Insight Global" column to explore the cutting-edge directions and opportunities of Chinese brands going global from the perspective of brand growth and change, providing thoughts and inspiration for companies going global and the industry.

This is the 36th issue of our column - In 2017, the former Huawei engineer team entered the consumer-level laser equipment track. In 2022, the global crowdfunding amount exceeded 300 million yuan, and the annual sales volume was nearly 500 million yuan; the products cover home creativity, small B-end customization and industrial-level scenarios, and are placed on Walmart shelves and sold to more than 50 countries and regions around the world... How can Chinese hardware brands tear off the industrial label with 'lightweight technology + contextualized innovation' and open up overseas niche markets? Based on this, we had a chat with Dong Juan, the person in charge of the LaserPecker China region.

Take a photo of a handwritten signature with a mobile phone and transfer it to a palm-sized machine.

Within 3 seconds, the machine generates an engraving path, and then you can use a laser to engrave patterns on eggshells or Coke cans.

Among overseas users, DIY equipment has always been a track with stable shipments and good profits. In 2022, the laser engraving machine company xTool entered the market and achieved a sales volume of 800 million yuan in one year, obtaining hundreds of millions of yuan in financing, which caused a stir.

The laser engraving machine used to be an exclusive tool for factory assembly lines, with a high price, a large volume, and a complex operation. The factory's order acceptance threshold is often at least a thousand pieces, and the "small batch and personalized" needs of individuals and small merchants have long been ignored.

In 2017, a group of engineers from Huawei noticed this market gap and founded the LaserPecker brand. Using a "handheld" design, they compressed the industrial equipment into a 6-kilogram consumer-level product, and the entry-level model price dropped to 2,000 yuan.

QYR data shows that the global laser engraving market was 658 million US dollars in 2023. Compared with the 20 billion-plus US dollars market for 3D printers, it is an absolute niche track. However, as of 2024, LaserPecker's global crowdfunding amount has accumulated to more than 300 million yuan, with an annual sales volume of nearly 500 million yuan, and it has successfully entered the hardware shelves of Walmart.

But doubts also follow: How to balance performance and cost for a device with a price range of 2,000 to 20,000 yuan? Is it a tool or a toy? How to avoid it becoming a "dust-collecting toy"? When the market education is not yet completed, how can LaserPecker make the laser engraving machine move from a "niche geek toy" to a mass necessity?

Tearing Off the Industrial Label

In the past, laser engraving machines were far from ordinary people. An engraving machine used in a factory assembly line generally costs 10,000 to 50,000 yuan, has a body length of 2 meters, and requires at least 30 minutes for a single operation.

However, the first-generation product of the LaserPecker laser engraving machine, LaserPecker Pro, weighs only 1.9 kilograms, is only the size of a palm, and can be operated in the hand. According to 3D Lab Store, the engraving accuracy of LaserPecker 2 is 0.05 millimeters, with three engraving resolutions of 1k, 1.3k, and 2k, and the engraving accuracy of LaserPecker 4 can reach 8K, and the fineness can even reach 0.01 millimeters.

This is a very smart idea. The laser engraving machine belongs to a niche market, and early entrants like xTool have already occupied a favorable position. For LaserPecker to carve out a path, it either needs to open up a new market or target the low-end market that the leaders don't care much about.

LaserPecker has obviously achieved both. The laser engraving machines of LaserPecker cover a wide range from entry-level to professional-level prices. The entry-level model is priced at about 2,000 yuan and is mainly for home users and beginners. For example, it is used for children's handicraft courses or personalized souvenir customization. This is a completely new user group that has not previously been exposed to laser engraving machines. "We want to enable housewives to engrave names on eggs," Dong Juan, the person in charge of the LaserPecker China region, said metaphorically.

The mid-range models are priced between 3,000 and 8,000 yuan and are suitable for small studios or creative merchants, such as American handmade leather goods store owners or Japanese dessert workshops, for small-batch customized production. These users have limited funds and have not been paid much attention by medium and large companies before.

This is also the basic market of LaserPecker. Among their overseas users, 85% are small B-end users: American handmade leather goods store owners use it to engrave custom trademarks, Japanese pastry chefs use it to print date labels on cakes, and Chinese fashion brand managers use it to make jeans look worn out with a laser.

"Individual users may be fresh for a while, but small B-end users are the key to continuous blood-making," Dong Juan said. "In the past few years, the repurchase rate of B-end users on the independent website in the United States is much higher than that of C-end users. In 2023, its new product LaserPecker4 completed the 2 million US dollar stage goal in 12 days after its launch, and finally ended with 5.57 million US dollars, setting a new crowdfunding record.

As for the high-end professional model such as LaserPecker LP5, the price is about 20,000 yuan (about 3,499 US dollars), equipped with a dual laser source (fiber + diode), supporting 360° cylindrical engraving and metal cutting, as well as 3D embossing functions, mainly for professional users who require high precision and multi-functionality.

It is worth noting that LaserPecker has established a virtuous model: in the mid-to-low-end market, it uses low-price products to open the market and earn high profits.

The key behind this is independent research and development. In order to achieve "miniaturization", the LaserPecker supply chain team had to independently research and develop 65% of the components because "industrial standard parts simply cannot fit into such a small box". Their fourth-generation product LaserPecker4 integrates a dual laser source (fiber + diode), with an error control of 0.01 millimeters, a performance close to that of industrial machines, and a weight of only 6 kilograms. "We invest 70% of our R & D in optimizing the engraving algorithm and motion control," Dong Juan, the person in charge of the LaserPecker China region, told Hardcore Technology.

Independent research and development, combined with the advantages of the Shenzhen supply chain, gives LaserPecker a certain advantage in the gross profit margin in the industry.

Currently, LaserPecker has established a good reputation among small B-end users. "One machine receives an average of 20 orders per day and pays back the cost in three months," an Amazon buyer commented.

"When your product can help users make money, low frequency and high price are not a problem," Dong Juan concluded.

Narrow Track or False Demand

The laser engraving machine track seems narrow, but in fact, there are undercurrents.

Players who adhere to the industrial-level route use high-precision equipment to focus on enterprise procurement; LaserPecker bets on the consumer-level market and "squeezes" the machine onto Walmart shelves.

This differentiation is directly reflected in the channel strategy: the former relies on the dealer system, while LaserPecker directly reaches the C-end through independent websites and social media. In LaserPecker's experience of going global, a counter-intuitive phenomenon is that the conversion rate of its independent website is 30% higher than that of Amazon. In 2024, its official website has a monthly visit volume of 260,000, and 54% of the traffic comes from direct search and natural traffic.

Its success relies on a "visual persuasion" strategy: Pre-accumulate potential customers through email marketing and social media topics, and use comparison animated images to show the egg engraving process of "Traditional equipment 30 minutes VS LaserPecker 3 seconds", increasing the conversion rate by 40%;

The localized page design of the official website precisely matches the regional culture. "Users don't know what a laser machine can do, so we feed them with usage scenarios." This strategy is particularly effective in overseas markets with significant cultural differences. North American users search for "laser engraver for small business (can be translated as 'small batch production artifact')"; Japanese users are keen on "customized family nameplate", from school bags to tableware, and engraving has become a symbol of family exclusivity.

In addition, the official website's "Creative Library" provides 5,000 templates, from pet tags to wedding invitations, with a 15-second operation video for each template. In the Facebook group of tens of thousands of people, users share the "Etsy bestseller strategy", such as using leftover materials to make custom earrings with monthly sales of over 10,000. This UGC ecosystem forms a "creation - sharing - monetization" chain that can feed back to the official website traffic. "We don't do general traffic, but only focus on creative designers, small business owners, and DIY enthusiasts," Dong Juan said.

QYR predicts that the proportion of China's production capacity in the global laser engraving market is expected to increase to 71% by 2030. LaserPecker, xTool, and WAINLUX are listed in the first echelon and will jointly occupy almost half of the market share. Despite annual sales of hundreds of millions of yuan, the real challenge for LaserPecker still lies in market education - Can the laser engraving machine become as popular as the home printer?

The key to crossing the gap is still "lightweight technology". "In the future, you can even say to your phone, 'Engrave a poem on the cup', and leave the rest to the machine," Dong Juan proposed an idea. And some of the latest LaserPecker products already support Bluetooth remote control, and the AI drawing function (automatically converting text into engraving patterns) is being developed and tested.

This "foolproof" experience may reduce the usage threshold, but cost control is still the key. "The laser engraving machine should not only be a professional tool, but more importantly, an entrance to creativity," Dong Juan's conclusion reveals the survival rule of a niche track: Use technology to lower the threshold and be a disruptive innovator.

But in the end, manufacturers in the niche track still need to answer a practical question - When the craze subsides, how many users are willing to continue to pay for the scene experience?