Trump unexpectedly promoted Anker power banks for free; Anker: I almost cried T_T

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I. Trump-Musk dialogue abroad, Anker gains popularity in China

A while ago, Musk and Trump had a live-streamed conversation.   power bank Trump used unexpectedly became a hot topic in China.

This power bank is manufactured by Anker, a Chinese international expansion brand. It features an LCD display on the upper right side and is sold on domestic e-commerce platforms as well as Amazon.

After news of Trump using an Anker power bank reached China, Anker Innovations' stock price surged rapidly around 11:30 a.m. on August 13.

More importantly, because of this news, more ordinary consumers in China suddenly became aware of the "Anker Innovations" brand.

Anker Innovations is a typical example of a Chinese international expansion brand that "exports first and then sells domestically".

These companies typically circumvent fierce domestic competition by focusing on expanding into overseas markets, leveraging China's robust industrial supply chain capabilities.

On the one hand, we design products with a user-centric approach, and on the other hand, we invest heavily in technological research and development.

They eventually succeeded in becoming a top seller in a certain overseas region, and then turned around to expand into the domestic market.

Anker Innovations has become the world's number one in the power bank industry, and its nearly ten years of experience have earned it a stellar reputation among people in North America.

In the latest seller rankings on Amazon North America, Anker Innovations' store, AnkerDirect, jumped to second place. The store in first place is "Pattern."

In fact, "Pattern." is a multi-brand distributor based in the United States, and its huge gross merchandise volume (GMV) is contributed by the many brands it represents.

Therefore, if considered from the perspective of a single brand, AnkerDirect is actually ranked first.

This demonstrates the breadth and depth of Anker power banks' coverage in North America, which is the fundamental reason why the Trump team chose Anker power banks.

Anker Innovations has also implemented a multi-channel strategy for overseas digital marketing:

1. Consider both B2B and foreign trade channels;

2. Launch a business website and simultaneously register on third-party channels such as eBay and SHEIN;

3. Vigorously develop offline channels.

According to the data disclosed by Anker Innovations below, its overseas digital marketing strategy has been very successful, with revenue in newly developed markets such as Japan and the Middle East far exceeding that in the Chinese mainland market.

II. Anker's RMB 17.5 Billion in Annual Revenue and Its "Shallow-Sea Strategy"

Despite the unexpected boost from the Trump news, Anker Innovations ' recent reports and stock price suggest a less optimistic outlook.

Anker Innovations once had a market value of over 80 billion yuan. Although its revenue and profits continued to grow, its total market value has hovered around 30 billion yuan, making it difficult to return to its peak.

My research suggests there may be two reasons:

(i) Anker Innovations’ slow progress in the domestic market has disappointed domestic investors.

(ii) Related to Anker Innovations' development strategy and the resulting predicament

Anker's "shallow sea strategy" and its horizontal expansion of brands and products are not viewed favorably by many investors.

The “shallow sea strategy” was proposed by Anker founder Yang Meng: he likened the many categories of consumer electronics to different areas in the ocean, and the size of the category is as large as the size of the area.

The largest category is smartphones, which is equivalent to the Mariana Trench, with a market of about $500 billion; PCs have a market of $200-300 billion.

Televisions: a market of approximately $100 billion; Tablet computers: a market of $70-80 billion.

Counting further down the spectrum, the traditional Bluetooth headset market is probably less than $50 billion.

Conversely, the vast majority of the ocean area is composed of shallow waters, which are hundreds or thousands of very small categories, such as power banks, robot vacuum cleaners, USB connectors, and so on.

Anker's strategic choice is to target shallow waters, selecting niche markets with a certain market size and where the product category is still in the growth stage of its product life cycle when expanding into new product categories .

These products have low technological barriers, so major manufacturers won't go all in on them, leaving room for newcomers like Anker Innovations, such as chargers, power banks, smart speakers, and Bluetooth headsets.

However, due to the inherent limitations of the "shallow sea strategy," even with the development of multiple product lines, it is difficult to reach the scale of deep-sea products.

Therefore, Anker had to "expand horizontally" from charging products to smart home and home security (Eufy), Soundcore (wireless audio), and Nebula (projectors and other audio-visual entertainment).

Then there's AnkerMake (3D printers) and AnkerWork (smart office solutions), while continuously expanding product lines under each brand, including vacuum cleaners, health scales, smart door locks, and other products.

Its latest move is to expand its energy storage product line under Anker—the Anker Prime series—to provide power for offices.

However, excessive "horizontal expansion" has brought about new problems.

(iii) Excessive horizontal expansion leads to weakened competitiveness

Anker Innovations positions itself as the "Procter & Gamble of the consumer electronics industry," implementing a multi-brand strategy. For example, Procter & Gamble launched brands such as Rejoice, Head & Shoulders, and Pantene in the shampoo sector, each occupying a different market segment.

Rejoice focuses on smooth hair; Head & Shoulders specializes in removing dandruff and maintaining scalp health;   targets the repair and nourishment of damaged hair.

While adopting a multi-brand strategy has its advantages, such as each brand focusing on a specific product category, complementing and supporting each other, diversifying risks, and building brand equity value, it also has its drawbacks.

The fragmentation of resources and potential among various brands has diluted R&D and marketing expenses. Simultaneously establishing multiple brands and building brand recognition in consumers' minds to become a leading brand is no easy feat.

In the field of smart security cameras, Anker Innovations' Eufy security ranks only tenth, and it has to compete with Amazon's own Amazon Ring, which has maintained the number one market share for many years.

In the robotic vacuum cleaner market, iRobot and Ecovacs dominate, while Anker Innovations' Eufy Clean has a weak presence. This is because Anker Innovations' competitors are more focused.

 For example, in 2023, Roborock, whose main business is robot vacuums, invested RMB 645 million in R&D, primarily in robot-vacuum development.

XGIMI Technology, whose main business is projectors , spent 381 million yuan on R&D during the same period, mainly on projection products.

In contrast, Anker Innovations' 1.414 billion yuan R&D expenditure   has to be spread across numerous brands and products, with each brand and product receiving relatively little funding, undoubtedly limiting   's development.

The end result was that Anker Innovations had to cut many product lines.

In 2022, Anker Innovations closed 10 product teams, including those for lawnmowers, handheld cleaning devices, and electric bicycles, resulting in the departure of over 200 employees.

III. Epilogue's Thoughts

Overall, after a series of strategic reforms, Anker achieved outstanding results in 2023 with annual revenue of 17.5 billion yuan and net profit of 1.6 billion yuan, supported by 17 product categories.

However, Anker still faces significant challenges at this stage. With the gradual disappearance of category and channel advantages, Anker's growth rate can no longer conceal its fatigue, making the diversification of overseas digital marketing channels imperative.

For Anker, which adheres to a long-term brand strategy, even annual revenue of nearly 20 billion yuan cannot guarantee success. Faced with a vast product portfolio, making strategic choices has become a profound and complex challenge.

CTMON has been focusing on overseas digital marketing for B2B companies for the past 10 years, dedicating itself to researching how to help clients obtain accurate qualified inquiries, and has served more than 2,000 clients.

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