The Loss of Momentum: The Predicament of Lao Bang Electric, Once the Leader of Kitchen Appliances

Source: Yu Jian Column

Author: Yu Erhu

Operations: Yu Su

By 2026, Robam Appliances faces three possible paths forward. One is to completely shed its dependence on real estate, rebuild its channel system, and focus on the existing market and lower-tier markets. Two is to increase R&D investment and achieve technological breakthroughs in smart, integrated, and health-oriented products to rebuild product competitiveness. Three is to promote organizational reform by introducing a professional management system to activate corporate innovation. All three paths are challenging, but they offer more hope than maintaining the status quo.

When the 2025 semi-annual report showed double declines in revenue and net profit, the capital market responded with continuous drops, reflecting the difficulties faced by this veteran kitchen appliance company. From a peak market value of 51.6 billion yuan in 2018 to over 30 billion yuan shrinkage now, and from 24 consecutive years of leading sales in range hoods to sluggish growth across all categories, Robam Appliances is experiencing its most severe test since going public over a decade ago. Was this once “the king of kitchen appliances” abandoned by the times, or has it lost itself amid strategic confusion?

Looking back at Robam Appliances’ development history, it is a condensed legend of China’s kitchen appliance industry. Founded in 1979, launched its first range hood in 1988, listed on the Shenzhen Stock Exchange in 2010, and from 2013 to 2017, its net profit growth exceeded 40% annually for five consecutive years.

However, as the golden era of real estate ended and the wave of consumption upgrading shifted, this industry veteran appears to be faltering. In the first half of 2025, the company achieved revenue of 4.729 billion yuan, down 7.20% year-over-year. Net profit attributable to shareholders was 731 million yuan, down 5.86%.

This marks the first “double decline” in interim reports in nearly ten years for Robam Appliances, with an expanding downward trend. More worrying is that this is the fourth consecutive quarter of revenue decline and the second consecutive quarter of falling net profit. The once mythic growth story is turning into a reality of deceleration.

1

Success and failure both hinge on the same factor

Robam Appliances’ rise was deeply tied to the golden age of the real estate industry, which is both its secret to success and the root of its current predicament. This deep connection is reflected not only in its business structure but also in its strategic DNA, making it difficult to pivot during the real estate winter.

Data shows that Robam Appliances has established strategic cooperation with over 85% of China’s top 100 real estate developers. Its decoration channel was once a growth engine. Between 2016 and 2020, driven by policies promoting refined decoration in real estate, engineering channels contributed significant incremental revenue. From 2010 to 2017, the company maintained double-digit growth in revenue and net profit, with an average net profit growth rate exceeding 40%. This close tie with property developers was once regarded as a model of channel innovation.

However, when the real estate market entered a downturn, this model quickly became a heavy burden.

In the first half of 2025, new projects with refined decoration declined by 31.8% year-over-year, directly causing a sharp drop in Robam’s engineering channel revenue. Even more serious is the accounts receivable risk: as of June 2025, the company had provisions for bad debts totaling 4.24 million yuan for other receivables, involving multiple partners expected to impair.

This indicates that the previous real estate dividend is transforming into tangible bad debt pressure.

This risk was not sudden. As early as 2022, when Evergrande, Sunac, and other property giants defaulted, Robam had already made large provisions for bad debts. Yet management seemed to learn little from these events, still prioritizing engineering channels as a key strategic direction. Behind this path dependence lies an obsession with old successful models and a lack of confidence in developing new channels.

To this day, management still seems unable to find an effective way to break free from real estate dependence. Although the company has proposed a new strategy of “leading digital transformation in cooking,” the actual business structure shows that range hoods still contribute 47.86% of revenue, gas stoves account for 25.1%, and the over-reliance on traditional smoke and stove business remains unaddressed.

In the first half of 2025, revenue from range hoods was 2.261 billion yuan, down 7.04% year-over-year; gas stove revenue was 1.187 billion yuan, down 7.20%. Both core categories declined simultaneously, with drops exceeding industry averages, indicating that the problem is not only external but also internal competitiveness is waning.

As real estate shifts from an “incremental” to a “stock” era, Robam Appliances still operates with an “incremental mindset.”

The company continues to focus resources on the new housing market, showing slow response to renovation of existing homes and old kitchen upgrades. According to Aowei Cloud data, retail sales of kitchen and bathroom appliances in China grew only 1.7% in the first half of 2025, but the stock market share has exceeded 60%. In this new battlefield, Robam’s channel layout, product strategy, and service system have not kept pace, leading to market share being eroded by competitors.

More concerning is the weak channel sinking.

In third- and fourth-tier cities, brands like Midea and Haier, with comprehensive dealer networks and cost-performance advantages, are rapidly capturing market share. Meanwhile, Robam has long maintained a high-end positioning in first- and second-tier cities, showing insufficient attention to lower-tier markets.

When demand in first- and second-tier cities saturates and peaks, this imbalance in channel structure becomes evident. In the first half of 2025, offline retail channel revenue for Robam declined year-over-year, while Midea’s kitchen appliance sales in third- and fourth-tier markets continued to grow. The shifting market landscape is revealing profound changes.

2

The second growth curve is collapsing

If dependence on real estate is an external shock, then product line homogenization is an internal strategic failure. Robam once proposed a strategy to “expand the advantage of the first product category, lead the second, and steadily promote the third,” but in reality, the second and third categories are suffering market “beatings.”

The huge gap between this strategic vision and actual performance reflects a deep crisis in corporate innovation capability.

Data from the first half of 2025 is alarming: integrated stove revenue plummeted 45.24% year-over-year; steam ovens fell 37.46%; ovens dropped 44.18%; disinfection cabinets declined 32.07%. These promising new categories not only failed to become growth engines but also became burdens dragging down performance. The integrated stove, one of the fastest-growing segments in recent years, was not seized by Robam. Its products have low market recognition and are uncompetitive against specialized brands like Mars, Yitian, and Midea.

Dishwashers, a relatively successful new category for Robam, reached a 16.7% offline retail market share in 2024, ranking second. But in the first half of 2025, dishwasher revenue was 436 million yuan, down 6.40%, with growth slowing significantly.

Faced with strong competitors like Siemens, Midea, and FOTILE, Robam’s technological advantages and brand recognition in dishwashers are not solid. Especially in embedded and sink dishwashers, FOTILE’s “high-energy bubble wash” technology has gained wide market acceptance, while Robam remains at the stage of traditional spray technology improvements.

The water purifier category also underperformed. Revenue in the first half of 2025 was only 32 million yuan, down 9.14%. In a market where brands like Angel, Qinyuan, and Midea have established strong positions, Robam, as a latecomer, lacks technological advantages and channel accumulation, making it difficult to break through. Its “follow the trend” strategy, doing what’s popular without differentiation, is doomed to fail.

Even more worrying is the shrinking R&D investment. In the first half of 2025, R&D expenses were 159 million yuan, down 10.90%. In an industry with accelerating technological iteration and fierce smart competition, reducing R&D is equivalent to cutting off future growth.

Compared to competitors, FOTILE maintains an R&D investment ratio above 5% annually, and Midea has built a global R&D system. Robam’s R&D spending rate has long been below industry average, directly leading to weak product innovation.

When “digital transformation” becomes just a slogan rather than actual investment, product innovation inevitably stalls. Robam’s “AI + cooking” concept has not shown enough differentiation in actual products.

Its smart range hoods and smart gas stoves, compared to Midea and Haier, lack significant advantages in connectivity, scene experience, and data services. The so-called “digital kitchen appliances” mostly stay at remote control and recipe recommendation functions, failing to build a true smart ecosystem.

Robam has long positioned itself as a “high-end” brand, but its high-end positioning has become blurred in recent years. On one hand, to compete, it has launched mid- and low-end product lines, diluting the brand image; on the other hand, in the high-end market, it lacks sufficient technological support and brand premium against international brands like Bosch, Siemens, and AEG. This “high but not high enough” dilemma leaves it caught between upgrading and downgrading in a complex market with both consumption upgrades and downgrades.

In the first half of 2025, Robam’s gross profit margin was 48.46%, down 1.79 percentage points year-over-year. The decline reflects not only a deteriorating product mix but also insufficient pricing power. While FOTILE is opening new high-margin tracks with integrated cooking centers, Robam still fights price wars in the traditional range hood and stove markets. This strategic divergence is shaping their different trajectories.

3

High-end positioning faces cost-performance backlash

Robam has long claimed a high-end position, but recent declines in operational efficiency are eroding this foundation. From channel control to service quality, from cost management to organizational effectiveness, a series of operational issues are surfacing.

First is weakened channel management. The once “distributors would fight to get products” scene has faded. Under increasing competition and rising prices, dealer willingness to stock products has dropped sharply.

In the first half of 2025, sales expenses reached 1.249 billion yuan, up 5.01%, while revenue declined, leading to a deteriorating marketing ROI. This indicates that maintaining the high-end image is becoming more costly, while market acceptance wanes.

More seriously, channel conflicts are intensifying. Price chaos between online and offline channels, frequent cross-region stocking, severely damage dealer interests and brand credibility.

In e-commerce, Robam faces fierce competition from Midea, Haier, and others, with price wars intensifying; offline, the traffic in KA stores is declining, and the asset-heavy store model faces mounting pressure. These multi-channel difficulties test management’s channel governance, but current measures seem insufficient.

Second is the collapse of service reputation. According to Black Cat Complaint Platform, Robam has received 479 complaints related to product quality and after-sales service. Consumers report issues like copper pipe leaks in gas water heaters causing damage to newly renovated cabinets, with delayed after-sales responses. For a high-end brand, such “high price, low quality” experiences are destroying its premium image.

In the social media era, negative word-of-mouth spreads rapidly. On Xiaohongshu, complaints about poor installation, high repair costs, and indifferent customer service are widespread.

This decline in reputation is not overnight but results from long-term underinvestment in service and insufficient focus on user experience. When consumers pay high prices but receive inadequate service, brand loyalty evaporates.

A deeper issue is the management’s strategic resolve. CEO Ren Fujia has been in position for over ten years, with his salary rising from 930,000 yuan in 2020 to 1.39 million yuan in 2024, yet the company has shifted from rapid growth to overall negative growth. Management still emphasizes “deeply refining” the range hood and stove categories in investor communications, a conservative stance contrasting with industry trends.

Bureaucracy and declining innovation vitality within the organization pose hidden crises. As a family-influenced listed company, Robam lags behind Midea and Haier in talent recruitment, incentive mechanisms, and decision-making efficiency. While competitors accelerate, Robam chooses to stay in its comfort zone, a puzzling strategic inertia.

In the first half of 2025, net cash flow from operating activities was 531 million yuan, down 6.61%. The worsening cash flow reflects declining operational efficiency and profitability. With increasing accounts receivable and slowing inventory turnover, financial risks are accumulating. Although cash and cash equivalents as of June totaled 4.408 billion yuan, if the downward trend continues, it will only be a matter of time before cash reserves are exhausted.

4

Conclusion

Robam’s difficulties are not sudden but the result of multiple factors: dependence on real estate, product homogeneity, lack of innovation, and operational inefficiencies. The “double decline” in the first half of 2025 is not the end. Without fundamentally reconstructing its strategic logic, the once “king of kitchen appliances” risks becoming a footnote of the era.

For CEO Ren Fujia and his management team, the real challenge is not just maintaining the top market share in range hoods but breaking path dependence and finding new growth paradigms in the stock market. After all, markets do not believe in tears, only in the courage and execution of transformation. When “boss” no longer means the leader in kitchen appliances, it’s time to turn the page.

In 2026, Robam Appliances faces three possible paths forward. One is to fully shed its dependence on real estate, rebuild its channel system, and focus on existing and lower-tier markets. Two is to increase R&D investment and achieve technological breakthroughs in smart, integrated, and health-oriented products to rebuild product competitiveness. Three is to promote organizational reform by introducing a professional management system to activate corporate innovation. All three are challenging but more promising than maintaining the status quo.

History always repeats with similar themes. The fall of Nokia in the smartphone era and Kodak’s collapse in the digital age serve as warnings that industry leaders cannot rest on past successes. Whether Robam Appliances can awaken amid crisis and be reborn through transformation not only concerns a company’s fate but also offers an important lesson for China’s traditional manufacturing industry’s transformation and upgrading. The window of opportunity is closing; the answer will soon be revealed.

【Tianyancha shows】Founded in 1979, Robam Appliances (stock code: 002508) is a leader in China’s kitchen appliance industry and the most historically long-standing professional kitchen appliance brand. From creating China’s first range hood to today, over 35 million households enjoy Robam’s easy cooking lifestyle. In the range hood market, Robam has become synonymous with the product across China.