2015 Smart Travel Hardware Research Report

[[157433]]

Produced by Xiaofanzhuo FA team

Li Yiqun Jing Hua

• With the opening of the first year of smart hardware in 2014, hardware concepts and technologies have been continuously popularized and developed, and smart hardware has also been continuously infiltrated into personal life;
• In the field of travel, whether it is Segway, the originator of the balance bike, or the widely acclaimed Niu Electric in China, whenever smart hardware is combined with travel, it will attract widespread attention.
• As the most practical smart hardware, travel hardware has seen rapid growth in 2015: Ninebot acquired Segway in April this year and completed an A round of financing of 80 million USD, officially completing the layout of a 5-kilometer living radius; and at the end of last year, LeMobility also completed a B round of financing of 100 million RMB.

Both capital and the market have begun to accept smart travel hardware, and the demand is increasing. However, most travel hardware is still in the stage of concentrated innovation and research and development. The final form is still in the exploration stage. There is no "bicycle-level" product form that is truly suitable for public acceptance and widespread application. It is still in a state of blooming. In the future, balance bikes, electric cars, electric bicycles or electric skateboards are more suitable for urban people's smart travel? The pressure of urban road traffic has increased, and the available space is smaller, which requires breakthroughs in the most core indicators of smart travel hardware such as appearance, portability and ease of learning. Safety issues are the first to be solved in the popularization of travel hardware. Perhaps, a form that occupies a smaller area, is lighter, and has a range of about 10 kilometers will become the real mainstream. The Xiaofanzhuo Research Group hopes to use this report to discuss the future of travel hardware with everyone!

Smart hardware market:

▶ Notes 1 & 2: January 2014 to March 2015;

▶ Note 3: The data are from an online survey of 2,019 users conducted by iResearch in August 2015.

Travel hardware market:

Market dynamics: Since 2014, smart travel hardware has continued to receive support from capital, technology and other aspects, and has gradually gained attention and recognition from the consumer market; in 2015, a domestic self-balancing car company acquired the American "pioneer", which caused heated discussions in the industry and received high attention from capital.

Market demand: Innovative short-distance transportation tools are expected to solve urban traffic pressure: 44% of people drive within 5 kilometers, 12% within 2 kilometers, and 7% within 1 kilometer; the consumer group, mainly those born in the 1980s, generally has a higher acceptance of smart hardware than other groups; the penetration rate of smart hardware for transportation in the market is lower than that of other types of hardware, and safety issues are the main reason.

Policy environment: Although the government has not yet issued unified technical specifications or policy requirements for emerging travel hardware such as smart balance scooters and low-speed electric vehicles, market demand has forced policies to respond in some places.

Personal travel hardware segments:

• "Develop differentiation and release great potential"

Industry chain structure:

• Pay more attention to supply chain and sales channel management

Personal travel hardware trend analysis:

• Portable mobility may become popular

Product Trends:

As China's urbanization process continues to improve in the future, urban traffic pressure will force travel modes to develop in two directions: sharing economy and personal transportation. The maturity and lower cost of personal transportation hardware will enable widespread application in urban transportation more quickly in the near future.

Traditional bicycles and electric vehicles have great opportunities to be replaced in the future because of the space they occupy. The limitations of urban space and the space inside buildings will inevitably make personal transportation tools develop in the direction of smaller size and better portability.

Among the existing transportation hardware products, electric scooters, which can be easily combined with other means of transportation and have high safety and technical maturity, are very likely to become more efficient and more widely popular personal transportation tools in the future.

Price Trends:

After nearly two years of exploration and market practice, the technology level of personal travel hardware has been relatively complete, and cost control can be effectively carried out. In the future, the market education cost investment for new products is also expected to be reduced; therefore, major brands are bound to make better optimizations in terms of price. Specifically, the following adjustments may be made:

Balance bike: The price will drop from 10,000 yuan to 5,000 yuan;

Wheelbarrow: The market price has been reduced to around 1,500 yuan by many small manufacturers;

Electric scooters: will move from the average 3K level to less than 2,000 yuan;

Electric vehicles: As the traditional electric vehicle market has been stable for many years, prices will not change significantly;

Electric bicycles: Since they are between traditional bicycles and electric vehicles, and are more of power-assisted products, their prices will be more stable at the thousand-yuan level.

Material Trends:

In terms of materials, it has become a trend to use more environmentally friendly and safe materials and minimize costs on this basis;

my country's magnesium resource reserves rank first in the world, and magnesium alloy is a light metal structural material with excellent performance. It is lighter than aluminum alloy and steel, but has better specific stiffness and specific strength than aluminum alloy and steel. It also has excellent properties such as good shock and noise absorption, good electromagnetic shielding performance, easy recycling of waste and no pollution. Magnesium alloy will most likely become the material of choice for future transportation hardware.

Overall analysis of risks and opportunities

Chance:

Compared with traditional manufacturers, personal mobility hardware startups have stronger design and development capabilities in terms of user understanding and online communities;

Skilled in sales through network marketing and online channels;

Able to combine traditional products and services to form a new model of hardware + software integration, and develop value-added services using mature systems and big data after reaching scale;

The price-performance ratio is higher than that of traditional products and it is more likely to trigger a sales boom.

risk:

There are a large number of local manufacturers with varying quality, and they are very capable of "copycats", which has a great impact on new Internet brands. The process of establishing a brand is long, and it is easy for them to be quickly harvested by ecological 3C companies such as Xiaomi after the education market is formed;

There are too many "toy" products that do not meet rigid demand;

The supply chain of travel hardware is complex and the production and manufacturing is heavy. Startup teams cannot accurately control it in a short period of time, which can easily lead to insufficient production capacity or inventory backlogs.

Insufficient offline channel development capabilities and sales experience;

Travel equipment is a kind of consumable hardware, but the general after-sales service system cannot keep up, and the after-sales service experience is poor;

The market size of the segmented fields is limited, and it is difficult for entrepreneurial teams to quickly cover more directions.

In order to survive and make profits in the industrial chain, Internet companies with obvious online advantages need to rationally allocate resources in offline links such as supply chain, inventory, and marketing, and give full play to the advantages of the Internet in various links of the industrial chain.

Electric Vehicles

Chance:

Users have a stronger experience of human-vehicle interaction and sales channels are diversified;

The core technologies of electric vehicles include motor drive systems, vehicle control systems and battery application systems, all of which have corresponding relatively mature solutions. There are also authoritative people and enterprises in related fields in China with R&D capabilities.

The government provides policy guidance, subsidies and rewards.

risk:

Automobiles are one of the most complex industrial products in the world, and the four major process production lines of stamping, welding, painting and assembly are indispensable;

It is necessary to build a factory from scratch or renovate the factory on a large scale, which is very costly.

The supply chain payment period is uncontrollable, cash flow pressure is high, and high financing capabilities are required;

Impact on existing electric vehicle manufacturers;

The infrastructure, such as charging stations and charging solutions, is incomplete, and major companies are deploying their own alternatives, with high expected investment costs.

The electric vehicle sector has extremely high requirements for professionalism, the ability to control the upstream and downstream industrial chains, R&D capabilities, and financial capabilities. For entrepreneurial teams, this is an industry where risks far outweigh opportunities, so they need to choose this direction with caution.

Personal transportation

Chance:

At present, the number of electric bicycles in China has reached 180 million. At the same time, with an increase of about 30 million units sold each year, the replacement of electric bicycles will constitute a huge demand for products;

Innovative means of transportation such as electric scooters and balance bikes have gradually been recognized by the public, with increasing acceptance, with annual sales exceeding 3 million units and still growing;

The industry is becoming more mature, and prices are entering the mainstream range that the consumer market can accept. The average price of personal transportation hardware is between 2,000 and 4,000 yuan.

As urban traffic pressure continues to increase, many car owners have begun to use electric bicycles, electric scooters, etc. as short-distance alternatives, making personal transportation hardware the incremental market with the greatest potential.

risk:

Start-up companies are prone to lack of mature dealer systems and need to rely on traditional channels and online platforms, which poses a greater risk of channel profit markup;

The target users with the largest market size are still price-sensitive, and the ability to control costs will directly affect the future development of the entrepreneurial team;

The market competition is fierce, and the price system set by traditional manufacturers is difficult for startups to break through; the influence of Internet brands has not yet been established;

Potential safety risks still exist, and the government has not yet officially approved various types of transportation methods to be on the road, so there are policy risks.

Personal transportation devices are relatively mature in form and market, and there is a certain degree of competition, but the pattern has not yet been established, and there is still a lot of room for growth. It is an industry with an open window of opportunity for entrepreneurial teams, and the core competitiveness lies in cost control, marketing, and channel capabilities.

Extreme Sports

Chance:

Taking sports bicycles as an example, the market size of sports bicycles is nearly 9 billion yuan. The annual output of carbon fiber frames in the Pearl River Delta region of China is about 5 million, and the frame market has exceeded 10 billion US dollars.

Extreme sports related products are fashionable and playable, and the target population has a high willingness to pay, and the user community has a strong stickiness;

The overseas market has huge potential. In the US market, the proportion of sports bicycles alone exceeds 40%, with sales exceeding 16 million units. The overall acceptance of extreme sports equipment overseas is high, with high profit margins.

The direction of Internet + extreme sports can be combined with apps and cloud computing and analysis to provide value-added solutions combining software and hardware to meet the needs of professionals.

risk:

Professionals are very picky about products, and the market space is squeezed by traditional extreme products;

It is difficult for cost pricing to break through a threshold in a short period of time, and market verification and feedback will take a long time;

The product development and channel capabilities of traditional giants should not be underestimated.

The hardware in the extreme sports field requires high product R&D capabilities, the target audience is more professional, and the acceptance cycle of ordinary consumers is relatively long; for entrepreneurial teams, it is a technology-driven direction, and at the same time, more emphasis will be placed on overseas markets.

Travel around

Chance:

Domestic and overseas tourism in 2014: a market of 3.7 billion people, with more scenarios giving rise to travel accessories: smart luggage tags, anti-lost devices, portable WiFi, tire pressure monitoring equipment, etc.

The functions are simple and clear, and the usage scenarios are more easily accepted by consumers;

The price threshold is low, and the cost for consumers to try is not high; it plays a greater role in data collection and has certain reference value for future big data applications.

risk:

The functions are too limited, and the perception when using it is very low, which easily leads to a lack of "sense of presence";

The market space is limited, and the products are low-frequency and non-essential. They have the same meaning as insurance, and are mostly preventive devices.

It is difficult to form a brand. Unless it is launched by an existing large ecological company, such as Didi, Xiaomi or BAT, it is difficult to establish brand recognition and reputation;

In the field of travel-related hardware, it is more dependent on the main means of transportation, and the chance of breaking out independently is relatively small; it is difficult for entrepreneurial teams to establish strong brand value, and the competitiveness of the products themselves is also weak.