ROMOSS's Collapse, Anker's Setback: The Inevitable Bitter Fruit after Intense Competition | Hard Krypton Analysis

Author | Zhang Ziyi

Editor | Yuan Silai

From explosions to recalls, the power bank industry has experienced a major upheaval in just half a month, affecting almost all major manufacturers.

As the trigger for this incident, Romoss, once hailed as the "national power bank", is on the verge of collapse.

At around 1 a.m. on July 6th, Romoss officially issued a notice of suspension of production and a holiday. The notice stated that with the continuous changes in the market environment and the development needs of the company's business, after research and decision by the company's shareholders' meeting, the company will suspend production for some time. The suspension period will last for 6 months starting from July 7th, 2025.

Previously, many consumers had reported on social platforms that there were abnormalities in the handling of power bank recalls and refunds at Romoss' official Taobao store. Some refund applications had been stuck for more than dozens of days, and the money had not arrived yet. The reason was that the balance of Romoss' store account was insufficient.

All signs indicate that Romoss, a leading domestic power bank enterprise that has been established for 13 years and ranked first in the sales of the power bank category on Tmall's Double 11 for 11 consecutive years, has fallen into an operational crisis due to the large-scale recall incident.

Other manufacturers were not spared either. In addition to Romoss recalling 490,000 power banks, Anker Innovations recalled 713,000 units. "Recently, I can say that personally, and our organization as a whole, are in a rather anxious and busy state," said the vice president of Anker Innovations in an interview.

After the new regulations of the Civil Aviation Administration, baskets of power banks were discarded at the security checkpoints. In addition, the 3C certification certificates of power bank products from many brands, including Romoss, Anker, Xiaomi, Baseus, and Ugreen, have been suspended. Most of the certificate status changes started in early June.

After more than a decade of development, the power bank industry has become an extremely competitive market. Cheap materials, extreme performance, and a lightweight appearance are actually an "impossible triangle." However, since power banks are not products with high technological added value, those in the industry can only infinitely approach the limits of materials to create some differences in appearance and charging efficiency.

In this storm, the responsibility cannot be solely attributed to any one party. This is actually a disaster that is bound to happen in an extremely involuted industry.

The collective slowdown of the power bank industry is also a warning. It forces the entire 3C industry to think: In an era of large-scale overcapacity, how should enterprises survive without being swept away by the tide?

01 The Domino Effect Caused by Battery Cells

Power banks are mainly composed of a battery cell part, a circuit board part (boost system and charging management system), and a shell part. The battery cell, as the "energy supply" department, is extremely crucial and also the main hardware cost of a power bank, usually accounting for more than 50% of the cost.

This large-scale recall of defective power banks was caused by the use of defective battery cells.

Anker Innovations clearly stated in its recall announcement that the company found that a battery cell supplier had changed the raw materials without approval, which might lead to the insulation failure of the separator in a very small number of products after long-term cyclic use, and further cause safety hazards such as overheating or even combustion.

Multiple media reports said that the battery cell supplier referred to by Anker Innovations is Amprius (Wuxi) Co., Ltd.

So, can the problem be simply attributed to the battery cell material problem of the supplier?

In the power bank industry, Amprius is a first-tier battery cell supplier and the largest supplier of soft-pack batteries in the domestic power bank field.

In 2023, Amprius' cumulative production of lithium batteries exceeded 100 million units. Its main customers include Romoss, Xiaomi, Anker Innovations, Tineco, Baseus, etc.

According to Anker's statement in an interview, during the investigation, they found that there should have been some changes in the cathode material. After some twists and turns, Anker confirmed that the materials of this batch of battery cells had been changed multiple times during the process.

An industry insider told Yingke that Amprius' battery cell problem this time was suspected to be caused by the crystallization of ternary materials during fast charging.

As of now, Amprius has not announced the investigation results of the battery cell incident.

The safe production and testing of battery cells are quite complex issues. Lithium metal itself has very active chemical properties and the problem of dendrite growth, which limits the realization of high energy density.

At the same time, liquid lithium-ion batteries use flammable organic liquid electrolytes. When there is electrical abuse, thermal abuse, or mechanical abuse, the batteries are prone to thermal runaway, and even risks such as fire and explosion. This is a long-standing problem for battery manufacturers in the upstream of the supply chain.

Even a factory of Amprius' scale can hardly trace the specific cause of crystallization. For downstream brand owners, simply conducting battery cell safety tests is more about testing the stability of the products and cannot trace the source. It also took Anker nearly half a year to identify the material problem this time.

An investor familiar with the lithium battery industry told Yingke: "There are many links in the production process of the lithium battery (including battery cells) industry where defects may be introduced, which will lead to a series of subsequent problems. This requires high management requirements for the factory. There are gradient differences among manufacturers in terms of safe production, and the cost of safe production is very high, which will ultimately be reflected in the product price."

Yingke learned that the high energy density and high-quality lithium-ion batteries that Amprius can produce do not have an absolute technological threshold. Almost all first-tier lithium battery manufacturers can achieve this.

However, the downstream customers of leading lithium battery manufacturers are mostly new energy vehicle manufacturers and mobile phone manufacturers. These large customers have high requirements for lithium battery safety and large demand. In contrast, the power bank industry is too small in scale and may not have the ability and demand to cooperate with leading lithium battery manufacturers.

After the cooperation with Amprius went wrong, Anker Innovations announced a strategic cooperation with Amperex Technology Limited (ATL). ATL is an absolute leader in the global battery cell industry. ATL has the largest market share in the mobile phone lithium battery field, exceeding 40% in 2021. Its customers include Apple, OPPO, Huawei, etc.

"The threshold for cooperating with large factories like ATL is very high. Some may require a minimum order quantity of 500,000 units, a 6-month production and delivery period, and cash settlement. These are requirements that small power bank factories cannot meet," an industry insider told Yingke.

It should be noted that, for now, this does not prove that Amprius is a bad factory. The suppliers of automotive-grade batteries are of course impeccable in terms of ability. However, according to the analysis of industry insiders to Yingke, "Amprius' battery cells have a brand premium in the industry and are already very expensive battery cells."

As a first-tier large factory, the large-scale product quality problem of Amprius is actually an inevitable backlash after the crazy pursuit of performance.

02 Excessive Competition

The 3C accessories industry (including power bank enterprises) is an industry that earns hard money.

Different from consumer electronics products such as mobile phones and AR glasses that can be used independently, accessories, as ancillary products, meet consumers' additional needs. Their prosperity is deeply affected by upstream products.

As the replacement cycle of global smartphones has extended from 16 - 18 months to 36 months, the purchase frequency of 3C accessories has also gradually decreased.

In the power bank market, according to data from Mordor Intelligence, the market size of power banks was estimated to be $1.359 billion in 2024 and is expected to reach $2.035 billion by 2029, with a compound annual growth rate of 8.40% during the forecast period.

Obviously, the growth rate of the power bank market has slowed down, which has shifted the competition in the mobile energy industry from a single capacity competition to a comprehensive competition in fast charging, appearance, and price.

However, without the support of core and hard technologies, external advantages are fleeting.

Take Anker as an example. Its gallium nitride charging plug launched in 2018 was well - received by the market. Within a month, another popular brand, Aukey, launched the same product.

Price has become the most competitive area. Take Romoss as an example. The daily price of its "20000mAh 22.5W fast - charging power bank" was in the range of 129 yuan to 149 yuan in 2021. By the end of 2024, the price had dropped to 69 yuan.

In this non - stop race, companies' running speed has gradually exceeded the iteration speed of batteries themselves, and the instability of lithium batteries has become a hidden danger.

"The current industry is too involuted. When high performance, fast charging, small size, light weight, and thinness are all required, and the performance of materials in all aspects is pushed to the limit, problems are bound to occur," an industry insider in the power bank industry told Yingke.

This kind of story does not only happen in the power bank industry. According to data from Shangqi Industry Research Institute, there were as many as 480,000 enterprises related to mobile phone accessories in China in 2024. Most of their products are minor innovations and easy to imitate.

The ways for enterprises to avoid getting involved in ineffective competition are actually the same old remedies: attach importance to R & D and explore more technology - intensive markets. For example, Anker and Ugreen's R & D expense ratios in 2024 were 8.5% and 4.9% respectively, and they are on an upward trend. In seemingly highly homogeneous product categories, the two have still achieved brand premiums through technological innovation. Anker is also expanding into more hardcore categories such as 3D printing and lawn mowers.

China's manufacturing ability of 3C products is irreplaceable in the world. However, after performance is in excess, enterprises must find a smarter way to digest production capacity. Otherwise, the fate of price wars is a vicious cycle of repeated industry collapses.

Image source on the homepage | Corporate official website

Typesetting | Liu Siya

This article is from the WeChat public account "Yingke". Author: Zhang Ziyi. Republished with authorization.