Summary of Key Points
Zhuimi Technology once relied on "technology reuse, multi-team competition and trial and error, and external financing" to expand rapidly. Its business spread from cleaning appliances to dozens of fields such as automobiles and mobile phones, and it even split into more than 200 independent business units (BUs). However, with the tightening of the financing environment (governmental strict control over industrial funds) and the soaring cost of cross-sectoral trial and error (for example, car-making projects that consumed huge amounts of money with no tangible progress), Zhuimi has begun to strategically shrink its operations: it is focusing its efforts on four core areas—smart home cleaning, outdoor gardens, intelligent mobility, and AI-powered embodied intelligence. It has reoriented long-term projects in mobile phones and automobiles towards technology development, integrated internal resources (such as MOVA managing the lawn mowing business, with Zhuimi returning to its core strength in indoor cleaning), and initiated personnel optimization. This adjustment represents a shift from "rampant expansion" to "calculating costs and focusing on core businesses." Nevertheless, the consequences of the expansion, such as job losses for employees and unpaid debts to suppliers, have fallen on ordinary people.
1. MOVA Was Not Acquired, but Its Resources Were Reallocated
The claim that "MOVA was merged into Zhuimi" is a misunderstanding. MOVA was originally a sub-brand incubated by Zhuimi and was doing well with its smart lawn mowing robots overseas. The adjustment involves consolidating the lawn mowing operations, which were previously distributed between Zhuimi and MOVA teams, under MOVA's management—essentially bringing similar tasks under one "professional team," while Zhuimi focuses on its core strength in indoor cleaning (vacuum cleaners and floor washers). It's neither the disappearance of MOVA nor an acquisition; rather, it's an internal optimization of resources to allow each brand to specialize in what it does best.
2. Why the Sudden Stop? The Financing Environment Has Changed, and the Cost of Trial and Error Is Unbearable
Zhuimi's past expansion was largely funded by local industrial funds (invested by governments or state-owned enterprises). However, in June 2026, the State Council issued regulations strictly controlling the establishment of new government funds and enhancing their management, making it impossible for Zhuimi to obtain cheap funding for new projects.
More importantly, the costs of expansion were excessively high:
- R&D: The founder mentioned spending 40 million yuan daily on R&D, amounting to over 10 billion yuan annually.
- Marketing: 600 million yuan was invested in the 2026 Spring Festival Gala, and 50 to 100 million yuan was spent on a single CES exhibition.
- Trial and Error: For example, the car-making project involved three separate teams working simultaneously on a concept car that couldn't be tested, with each custom car costing 3 million yuan, resulting in nothing but unused land.
In 2025, Zhuimi's net profit from its core cleaning business was only 3 billion yuan, which was far from covering these expenses. Without the ability to continue spending, it had to shrink.
3. The Past "Race and Error" Model: Small Projects Were Successful, but Large Projects Were Disastrous
Zhuimi's expansion strategy involved "technology reuse and multi-team competition." For instance, the motor technology used in vacuum cleaners was applied to lawn mowers, and multiple small teams were created to trial different approaches, with resources allocated to the most successful ones. This approach worked well with smaller, lower-cost projects like floor washers and personal care products. However, it failed completely with large, capital-intensive, and long-term projects like car manufacturing and mobile phones:
- Redundant Investment: Multiple teams were working on the same car-making project, leading to waste.
- Lack of Decision-Making: The founder was slow to make decisions, causing teams to wait indefinitely (for example, the land chosen for car manufacturing remained unused).
- Uncontrollable Costs: Trial and error costs spread to R&D, recruitment (high salaries for car industry experts), and the supply chain (suppliers prepared goods but orders were canceled), resulting in uncontrollable losses.
In short, small project failures could be easily addressed by closing them down, but large project failures led to endless expenses.
4. The Cost of Contraction: Job Losses for Employees and Unpaid Debts to Suppliers
The contraction was not painless, and the most affected were ordinary people:
- Employees: As of May 2026, Zhuimi had 20,000 employees, and 40% of them were to be laid off. Many were recently hired, including key personnel from top car companies, who lost their jobs within half a year.
- Suppliers: Suppliers working on lawn mowing projects suddenly stopped receiving orders, and 50 million yuan in payments were delayed, potentially causing financial crises for smaller suppliers.
While companies can isolate risks by dividing them into smaller units, the actual costs are borne by employees and suppliers—these are the consequences of the expansion.
5. What's the Future? Focusing on the Core Business and Calculating Every Expense
Zhuimi's core business is strong: it was the global leader in vacuum cleaner sales and revenue in Q1 of 2026, with overseas revenue accounting for 70% and profitability. This contraction is not a admission of defeat but a change in approach:
- Focus on the Core: Concentrate on the four core areas and eliminate unrelated cross-business projects.
- Cost Control: Stop blindly spending money on trial and error and evaluate the cost-effectiveness of investments.
- Steady Expansion: Use profits from the core business to fund R&D and avoid relying on external financing for future investments.
This is a crucial lesson for all rapidly growing hardware companies: after a period of rapid expansion, they must learn to manage their finances, determine what to persist with and what to abandon to survive the next phase.
In Summary: Zhuimi has shifted from trying to do everything to focusing on what it does best, but the costs of expansion have been borne by ordinary people. This highlights that the trial and error process in business is never cost-free.