"In the categories, channels, and brands, 'addition' is a strategy that many home appliance companies have adopted in the face of market turbulence and low consumer demand in recent years. Essentially, they aim to find growth space and momentum through expanding categories and brands. However, relying solely on addition for transformation is not very effective. To continue thriving, home appliance companies must learn to 'multiply.'
Expanding the categories of home appliances, from major appliances to small appliances, kitchen appliances, and even cleaning appliances, seasonal appliances, etc., continuously expanding the layout, hoping to establish a market operation pattern with no off-season throughout the year. In particular, allowing dealers to solve the problem of declining shipments in a single category by selling multiple categories.
Expanding the channels of distribution, from offline agents, distributors, retailers, to online stores, live e-commerce, content e-commerce, influencers, community operations, etc., striving to achieve scale shipments through comprehensive channel coverage. Balancing the interests of different channel partners and avoiding price chaos are additional challenges.
By introducing multiple new brands or developing sub-brands, companies explore segmented operations for different user groups. They aim to break through from mass-market brands to high-end brands, embrace younger users, and even explore lower-end brands under the guise of internet brands, all to identify more user needs and customize products and lifestyles for them.
Engaging in cross-industry marketing, collaborating with cabinet companies, home decor companies, home furnishing companies, building material stores, attempting to integrate more resources from home appliances, home decor, and home furnishing under the household scenario, providing one-stop, multi-category bundled solutions and programmatic implementation, transitioning from selling appliances to selling lifestyle solutions...
Over the past five years, facing a downturn in the market, low demand, and intense competition, the home appliance industry has seen many companies, compared to leading enterprises like Midea, Haier, Hisense, TCL, Changhong, etc., venturing beyond the home appliance industry to explore second and third curves, expanding into multiple industries and businesses. Many small and medium-sized home appliance companies have chosen to focus on categories, brands, channels, and marketing within the home appliance industry, continuously expanding in hopes of finding new business engines through aggregation.
However, the expansion strategy of many home appliance companies through 'addition' is not easy to implement in the frontline markets. Challenges include the decentralization of limited company resources, rational allocation issues, and low return on investment. The most prominent contradiction lies in the mismatch between the operational capabilities of many small and medium-sized enterprises' marketing teams and the actual management of channels, brands, etc., leading to a situation of promising but failing to deliver, ultimately eroding the company's reputation and future development.
The root cause of this situation, as seen in the home appliance industry, is that many companies' expansion through 'addition' is still a path of scale growth under traditional thinking, relying on continuous external market growth, addressing the proposition of multi-point revenue growth. Scale growth remains the only viable path, transitioning from grabbing low prices in a single brand, channel, and category to grabbing low prices across multiple brands, channels, and categories, perpetuating a cycle of 'internal competition' without truly finding new growth drivers and establishing development space for the company.
In this commercial landscape, the home appliance industry believes that the era of simply 'adding' has long passed. More home appliance companies must attack from multiple angles such as 'business models,' 'profit mechanisms,' and 'operational strategies,' using a mindset of 'multiplication' to seek new opportunities, stages, and business prospects.
Most notably, home appliance manufacturers must break through from selling products for profit margins to selling services for compound returns, transitioning from selling individual products to selling sets, scenario solutions. They need to explore quality operational breakthroughs and establish new profitable platforms. For example, while in the past, making profits from brand premiums and price differentials in selling home appliances, the future direction should involve selling services collectively, providing continuous service supply including hardware, content, ecology, maintenance, cleaning, etc., to find opportunities for compound returns.
Only by truly breaking away from the logic of 'managing products' in the past and entering the system of 'managing users,' the home appliance industry believes that many home appliance manufacturers can find their differentiation advantage and core competitiveness through proactive transformation through 'multiplication,' constructing that piece of 'land' they can deeply cultivate.
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Declaration: Personal original content, for reference only."
