Entrepreneurs from hardware companies are rushing to establish a foothold in the companion robot market, with two major players entering the space in recent weeks.
On December 23, 2024, Guo Renjie, former executive president of Dreame Technology in China, announced his resignation and quickly established a company focused on embodied intelligence. Backed by initial investments from IDG Capital, Matrix Partners China, ZhenFund, and Monolith, Guo is one of the latest executives betting on this emerging field.
The same month, news surfaced about Roger Jiang, a former technical staff member at OpenAI, launching Light Robotics. The startup is developing B2C companion robots designed to offer home services, healthcare, and educational support through advanced perception, learning capabilities, and environmental interaction.
According to sources who spoke to 36Kr, the consumer-grade companion robot market has become a magnet for executives from major tech companies seeking to launch new ventures. It was being hailed as a high-potential investment area for the latter half of 2024.
Other names have joined the fray. Sun Zhaozhi, the former head of product design at Xpeng Robotics, founded Robopoet, a company focused on artificial intelligence-driven toys, with plans to release its first mass produced product in 2025. Meanwhile, He Jiabin, who previously led industrial design at ByteDance’s Pico, debuted a robotic pet series called Ropet at this year’s CES. Ropet’s first Kickstarter-backed products are expected to ship by March.
Despite the flurry of activity, the embodied intelligence sector, particularly in consumer-grade robotics, remains nascent. Fully developed products are yet to make a significant impact in China, leaving consumer acceptance uncertain. Fundamental questions—such as the intended user base, essential product features, and optimal delivery formats—are still being examined as the market evolves.
New emotions, new demands
“Consumer-grade companion robots are predominantly a business targeted at women,” one industry insider told 36Kr.
Robopoet founder Sun echoed this sentiment, sharing in an interview that his upcoming products are primarily geared toward young women. Similarly, He Jiabin, the founder of Ropet, revealed that the target demographic for his robotic pet series is women aged 27–35. Despite Kickstarter’s reputation as a platform dominated by tech-savvy male users, 60% of Ropet’s transactions came from women. He expects this proportion to rise further once the product officially launches.
Sun also pointed to Generation Z women as the most frequent users of AI companion apps like Character AI, Xingye, and Talkie. Heavy users, defined as those engaging in over 200 conversations daily and spending more than three hours on the app, form a significant segment of this demographic. An investor focused on embodied intelligence confirmed to 36Kr that data from various emotion-centric AI apps highlights a clear trend: female users dominate this market.
This high demand for emotional connection is often cited as the key reason women are the primary consumers of companion products.
Pop Mart, a company frequently referenced in discussions about companion robots, provides an illuminating case study. Known for its success in the “emotional economy,” Pop Mart has inspired both entrepreneurs and investors in this space. Its recent marketing campaigns prominently feature terms such as “emotion,” “companionship,” and “healing.”
The numbers tell a compelling story. According to Meituan, searches for “healing” topics surged by 256% by the end of 2023. In a world where social isolation is on the rise and societal pressures intensify, addressing loneliness has become a universal challenge.
The companion robot market’s potential is already evident in Japan, a society often linked to heightened levels of social isolation. He Jiabin noted that Japan stands out as one of the most diverse and mature markets for companion robots. For example, the pet robot Lovot maintains a 90% daily active user rate over a span of 1,000 days, meaning most users engage with the robot daily for nearly three consecutive years. Users reportedly average over 60 minutes of interaction per day.
In June 2023, Lovot entered the Chinese market, opening its first offline store in Shanghai and debuting during a live stream hosted by Chinese influencer Li Jiaqi. With a price starting at RMB 29,800 (USD 4,172) and a monthly subscription fee of RMB 880 (USD 123.2) for software and maintenance, Lovot targets women around 40 years old. Many shoppers who experienced Lovot in stores expressed a strong desire to purchase it, praising its design as a refreshing departure from earlier models like robotic dogs. However, potential buyers noted that cost and design were significant barriers. They indicated a willingness to consider a purchase if future iterations addressed these concerns.
A business with inevitable potential?
“The B2C companion robot market will undoubtedly heat up by the second half of 2024,” said an investor with deep ties to the industry.
Unlike industrial robots that have carved a strong presence in B2B scenarios, consumer robots are still in their infancy. “Currently, B2C robots are in the market creation stage, so market education isn’t a major hurdle,” the investor added. To date, the only consumer robotics products to achieve mainstream success are cleaning robots for homes, gardens, and swimming pools. Their traction stems from autonomous driving advancements that spilled into the robotics sector. Similarly, breakthroughs in large language models and embodied intelligence in 2024 have kindled optimism about the prospects for B2C companion robots.
One notable outcome of these advancements has been the sharp decline in model costs. In May 2024, ByteDance’s Volcano Engine slashed the price of its Doubao Pro-32K model by 99.3% to RMB 0.0008 (USD 0.0001) per thousand tokens. Alibaba, Tencent, and iFlytek quickly followed suit, initiating similar price reductions.
According to the investor, Doubao’s daily token usage already includes a substantial share devoted to B2C companion toys, signaling that current AI model capabilities are sufficient for such applications. However, the investor warned that the widespread adoption of large models has pushed software applications toward market saturation. “There’s little room left for innovation on the software side,” an industry expert said.
In early 2024, capital markets were laser-focused on foundational AI models and software applications. But as dominant players consolidated their control, Chinese startups found it increasingly difficult to establish competitive advantages in this domain.
The hardware sector, however, offers a more promising landscape. “China’s supply chain is exceptionally strong, with unparalleled cost control and extensive experience in market exploration,” the expert said.
Still, even with these advantages, the future of companion robots remains unclear. Public data shows that since its launch in 2019, fewer than 20,000 units of the Lovot pet robot have been sold globally. Financial reports from Groove X, Lovot’s developer, reveal a net loss of JPY 2.7 billion (USD 17.1 million) in fiscal year 2023, with cumulative losses climbing to JPY 8.5 billion (USD 54 million). Much of Lovot’s financial woes are attributed to its steep price point.
Ropet and Robopoet, two companies planning upcoming launches, appear to have learned from Lovot’s struggles. Ropet’s Kickstarter price is set at USD 199, with a retail price of USD 299. Meanwhile, Robopoet’s Sun said that his products will not compete in Lovot’s price bracket. Both companies are also targeting a younger, predominantly female demographic—a shift informed by consumer insights.
The B2C business model is often described as asset-light, with vast untapped potential. Multiple industry insiders told 36Kr that current embodied intelligence applications remain heavily concentrated in B2B scenarios. These markets are notorious for high expectations, protracted decision-making cycles, and significant customer acquisition costs. Moreover, the delivery costs for B2B robotics solutions are substantial. “Many B2B robotics companies struggle with profitability because they can’t lower delivery costs,” said an investor specializing in the robotics market.
Both investors and industry leaders agree that by late 2024, the investment market will shift toward B2C applications that leverage China’s robust hardware manufacturing capabilities. Hardware innovation is once again becoming a focal point for capital markets.
That said, the Chinese market for companion robots is still largely speculative. “Lovot still relies on legacy AI technology and hasn’t integrated advanced large models,” said Sun during an interview.
Lovot’s financial challenges may reflect a deeper issue—demand for these products might be weaker than anticipated. Although potential buyers express interest, the emotional value these products aim to deliver is inherently subtle and difficult to quantify. The industry awaits a breakthrough product that can gauge the true appetite of the consumer market, making 2025 a critical year for B2C companion robots.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ye Danxuan for 36Kr.