In the home appliance industry, for many distributors, besides revealing their strengths and capabilities, there seems to be no other way forward at this stage and beyond!
By Ning Yan
"Since April this year, the shipment and consumer purchasing power in the home appliance retail market have not shown any significant rebound or recovery, but rather worsened. To be honest, whether big retailers or small merchants, after rounds of inventory pressure in March and April, all businesses are waiting for the shipments in the frontline market. However, the results are disappointing, leaving people feeling frustrated."
In recent days, some home appliance companies and merchants have bluntly communicated within the home appliance industry: the current trend in the frontline home appliance consumer market is truly abnormal! In previous years at this time, sales at the end had already started picking up, especially for seasonal products like air conditioners, which would typically undergo a round of inventory clearance and digestion; otherwise, the upcoming second quarter inventory pressure would not be feasible.
If this consumption trend does not see effective improvement and reversal in May, industry insiders have warned the home appliance sector: there will be a fierce battle in the home appliance terminal market ahead, it will be intense, brutal, and inward-looking. Many manufacturers may not wait until the mid-year promotion in June to take action; they may need to start by late May.
This has also sparked a new market competition challenge: what should the numerous home appliance distributors competing in the frontline market do next? Should they wait for special promotional policies from companies, wait for industrial policies from the government, or are there other ways out? The home appliance industry believes that as we enter May, especially around the mid-year promotion in June, all distributors in the home appliance market, whether billion-dollar giants, hundred-billion-dollar major retailers, or million-dollar mid-sized and hundred-thousand-dollar small merchants, must reveal their strengths and capabilities!
What is meant by revealing strengths? The home appliance industry believes it is about distributors' business strategies, logic, and pursuits, which must undergo an active "transformation." They must completely abandon the business strategy of "trading volume for price" and establish a direction of "profit per unit, winning with quality." They must sell one unit to make a profit, rather than aiming to sell more for more profit. At the same time, they need to avoid the sales inwardness of homogenized products and seek quality through the operation of differentiated products.
Currently, in the home appliance market environment and future trends, for the majority of home appliance distributor groups, scaling up is no longer suitable. The ceiling of industry scale has long been reached, and it is no longer possible to pursue quantity growth of 10% or more; instead, they must achieve revenue and profit growth even with a 5% or 10% decline in scale and shipments.
Undoubtedly, for all home appliance distributors, the core of doing business is to seek profit; making money is essential for survival, not relying solely on scale and quantity. Therefore, the bottom line for home appliance distributors is an upgraded business logic, a transformation of business philosophy, keeping pace with the times and industry changes, rather than getting caught up in the valueless price competition.
After revealing their strengths and attitude, how can home appliance distributors compete based on their capabilities? This question is not complicated, as the home appliance industry believes it mainly involves two dimensions: relying on capabilities to secure orders within their capacity, not aiming too high and not overextending. The other dimension is breaking through self-limitations, exploring new growth opportunities and spaces with a fresh platform, perspective, and track.
It is crucial for businesses to reassess the current market situation and future prospects, especially for those competing based on capabilities. As the home appliance industry in China has bid farewell to continuous growth and entered a phase of slight increases, stagnation, or declines, the focus for home appliance distributors is not on blindly competing on low prices but on endurance, connections, enterprise brands and products, services, and capabilities. Ultimately, all businesses need to rely on their abilities and skills to survive, rather than comparing themselves to others and pursuing unrealistic business expansion.
Challenging one's abilities and perspectives is essential for a portion of high-quality distributors or those with capabilities. In simple terms, distributors with capabilities can completely expand beyond their current business scope, exploring the transition from selling appliances to embracing households, providing integrated services and businesses including home decoration and furnishings, ultimately aiming for continuous upgrades from selling products to selling solutions and services, challenging the upward space of home appliance operations.
Copyright Statement: Original article from the home appliance industry, unauthorized reproduction is strictly prohibited.
Disclaimer: Personal creation, for reference only.
