Eastmoney Securities: Significant room for penetration rate improvement; the grass-cutting robot is in the stage of realizing technological dividends.

Dongfang Caifu Securities released a research report stating that, according to Zhi Shi Consulting, in 2024, the sales of smart lawn mowers will reach 383,500 units, a year-on-year increase of 156%, with a penetration rate of only 2%. In an optimistic scenario, the potential sales space for smart lawn mowers could reach over 6 million units. Currently, the penetration rate of smart lawn mowers is low, and there is significant room for technological upgrades. It is expected that from 2026 to 2027, the market will still be in a phase of rapidly increasing penetration rates driven by the early technological dividends of robotic vacuum cleaners. Against the backdrop of anti-dumping measures in the European Union, we remain optimistic about leading manufacturers with technological and channel advantages, strong brand power, and overseas production capacity.

Dongfang Caifu Securities’ main viewpoints are as follows:

The smart lawn mower sector has high growth potential, and there is vast room for penetration rate improvement.

According to Zhi Shi Consulting and Euromonitor, the global demand for lawn mowers in 2024 is projected to be 20.18 million units, a year-on-year increase of 8%, with expected sales revenue of $8.45 billion, up 2% year-on-year. Sales channels are primarily offline, with Market Reports World indicating that offline channels accounted for 65% in 2023 and hold significant power. Among them, Euromonitor predicts that in 2024, sales revenue for lawn mowers will be $780 million, a year-on-year increase of 4%, with a penetration rate of only 9%, indicating substantial growth potential.

Looking at regional data, according to Dazhu Cross-border, the North American market accounted for 36% in 2023, while the European market accounted for 30%. Euromonitor estimates that in 2024, the penetration rate in North America will be about 3%, and in various European countries, it will be between 20% to 40%. The North American market is large, with a low penetration rate, offering better growth potential that remains to be tapped.

Smart lawn mowers do not require buried wiring, are easy to use and deploy, and have gradually begun to replace wired products. They are expected to successively replace push-type and ride-on lawn mowers. According to Zhi Shi Consulting, in 2024, the sales of smart lawn mowers will reach 383,500 units, a year-on-year increase of 156%, with a penetration rate of only 2%. It is estimated that in an optimistic scenario, the potential sales space for smart lawn mowers could exceed 6 million units.

Product innovation drives growth, and emerging national brands are rapidly expanding their share overseas.

Dongfang Caifu Securities believes that the growth drivers for lawn mowers come from policy demand, product and technology iteration, price reduction and popularization, as well as comprehensive after-sales service. Specifically:

1. Policy demand. Lawn care policies in Europe and America make mowing a necessity, and the ban on gasoline outdoor power equipment (OPE) policies promotes the transition from gasoline to lithium battery products.

2. Product and technology iteration. Cost advantages encourage upgrades to lithium battery and robotic products, transitioning technology from RTK/visual to laser radar, and from single-sensor to multi-sensor integration.

3. Price reduction and popularization. The expansion of the mid-to-high-end price range for lawn mowers allows national brands to penetrate the mid-range “blue ocean” price segment, facilitating market expansion.

4. Comprehensive after-sales service. Lawn mowers heavily rely on after-sales support, and increasingly comprehensive after-sales policies promote consumer confidence. Emerging national brands of lawn mowers are capturing market share from traditional overseas lawn mower brands. With “technological advantages + industrial chain advantages + cross-border channels,” emerging national brands like Mammotion and Navimow are rapidly increasing their market share in the lawn mower category on Amazon, with Mammotion’s share in the U.S. market rising from 7% to 19% and in the German market from 0.7% to 35% from 2023 to 2025; Navimow’s share in the U.S. market rose from 0.2% to 2.8%, and its German market share is expected to reach 11% in 2025, potentially forming a new leadership pattern where Mammotion dominates the high-end market and Navimow leads the mid-range market.

In comparison, robotic vacuum cleaners are still in the phase of realizing technology dividends.

The localization technology of lawn mowers can be seen as a “technological migration” from small-scale to large-scale for robotic vacuum cleaners. Currently, the penetration rate of smart lawn mowers is low, and there is significant room for technological upgrades. It is expected that from 2026 to 2027, the market will still be in a phase of rapidly increasing penetration rates driven by the early technological dividends of robotic vacuum cleaners.

The impact of anti-dumping measures in the European Union is expected to be manageable, and the competitive landscape is likely to concentrate among leading players.

Reviewing the EU’s double anti-dumping measures on E-Bikes and the double anti-dumping events concerning golf carts in the U.S., leading manufacturers with high product prices and significant technological advantages are likely to obtain lower tax rates, and they can hedge tariff impacts through price transmission and overseas production capacity transfer. In contrast, small and medium-sized manufacturers with only price advantages and no capacity transfer ability may lose competitiveness and be eliminated. This EU anti-dumping investigation may raise market entry barriers, eliminate small and medium-sized manufacturers, and concentrate market share among leading players.

In terms of targets:

It is recommended to pay attention to Ninebot Company-WD (689009.SH), Ecovacs (603486.SH), Roborock Technology (688169.SH), and QuanFeng Holdings (02285).

Risk warnings:

Risk of intensified industry competition: If competition in the lawn mower industry intensifies, it may adversely affect the profits of national brands.

Risk of overseas policy fluctuations: If trade friction increases and EU anti-dumping tax rates are high, it may negatively impact the overseas market expansion of national brands.

Exchange rate fluctuation risk: Significant exchange rate volatility may weaken the price competitiveness of national brands, affecting their revenue.

Channel expansion not meeting expectations: Lawn mower sales heavily rely on offline channels. If national brands fail to expand their overseas offline channels as expected, it will affect market development.

Risk of R&D not meeting expectations: Lawn mowers are still in the technological update and iteration phase, and national brands rely on technological advantages to expand overseas markets. If R&D does not meet expectations, product competitiveness may weaken.

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