Since the beginning of this year, the frontline home appliance market has been dominated by intense competition in products, prices, marketing, services, quality, and reputation. The overwhelming and comprehensive nature of this competition has left all manufacturers and sellers feeling bitter but unable to articulate their frustrations. Now, faced with the powerful onslaught of the 618 shopping festival, what else can everyone do?
By Ning Yan
The mid-year 618 shopping festival, following the May Day holiday, was spearheaded by JD.com and Tmall, triggering a comprehensive market frenzy ahead of schedule.
However, focusing on the home appliance industry, many manufacturers were surprised by the announcements from JD.com and Tmall for this year's 618 festival. The two major platforms declared the "cancellation of pre-sales" and opted for direct sales of in-stock items, streamlining prices without the usual convoluted tactics. In recent years, prolonged promotions have led to waning consumer interest and complex internal settlements for businesses, resulting in a loss of credibility rather than attracting customers.
So, in the face of this year's market dynamics, competition, and changes, how will numerous home appliance manufacturers respond to the mid-year 618 festival, especially under the influence of the government's "trade-in old for new" policy? What new changes might emerge?
The Direct Approach of JD.com and Tmall for 618
It is evident that behind the seemingly straightforward and simplified promotions of JD.com and Tmall for this year's 618 festival lies a more aggressive stance from the two leading retail platforms.
Why such intensity? The home appliance industry believes there are two main reasons: first, on the market side. Over the years, various manufacturers have engaged in a multitude of commercial promotions, especially on e-commerce platforms, leading to a rapid decline in market and user appeal due to the overwhelming and chaotic nature of these activities, resulting in a vicious cycle of "no activity, no traffic; activity, no sales."
Secondly, on the supply side. The long-standing market saturation has bottomed out the resources for product pricing and promotions that many home appliance brands can offer to e-commerce platforms. It has become challenging to provide significant discounts during the 618 period, even with manufacturers' shared subsidies, leaving only a 10-20% margin. Moreover, many brands need to sustain their other channels and cannot solely rely on offering special deals to e-commerce platforms.
In fact, the current situation in the home appliance market is a classic case of "more wolves than sheep." Apart from JD.com and Tmall, emerging channels like Douyin, Xiaohongshu, and live-streaming e-commerce are aggressively competing, intensifying the market further.
Quiet Changes in Home Appliance Companies' Channel Strategies
In recent years, as more home appliance companies transitioned from solely embracing e-commerce to balancing multi-channel retail under the concept of omni-channel retailing, they have focused on controlling the scale of individual channels. They aim to support and maintain the development of a group of controllable and self-owned channels, rather than solely relying on a single channel for sales.
This implies that while home appliance companies' e-commerce departments still aim to make a significant impact during the 618 festival, the marketing systems of these companies prioritize stable and effective multi-channel retail sales rather than blindly relying on a single channel for sales.
Given the changes in market retail conditions and consumer demands this year, all home appliance companies are acutely aware of the evolving economic, market, and consumer environment, as well as the inventory levels and aggressive operational strategies of major channels like JD.com and Tmall.
If these major channels decide to flood the market with wholesale discounts due to operational efficiency and market trends, it will ultimately drown and engulf all channels and stores of home appliance companies in the retail market.
What's at Stake in the 618 Home Appliance Battle?
Regarding this year's 618 festival, the home appliance industry believes that many companies and merchants will continue to participate and even dare to compete aggressively on pricing.
The question remains: after over two years of intense market competition, with battles over products, prices, services, subsidies, and even partnerships, how much capital and resources do home appliance manufacturers have left to engage in this year's 618 festival?
The answer is simple: firstly, competing on price is essential. Offering short-term 618 subsidies, discounts, and customized e-commerce pricing will be the norm. There may also be instances of localized price attacks by certain companies to expedite inventory turnover and retail sales. Therefore, pricing will continue to dominate the 618 festival, as home appliance manufacturers have no choice but to follow suit.
Secondly, efficiency in collaboration is crucial. The 618 festival cannot be solely an online e-commerce affair; it must involve integrating online platforms with offline physical stores, aligning the main channels of home appliance companies for sales, and capturing traffic and demand. Home appliance companies need to balance the interests and operations of different channel merchants and avoid risky and speculative strategies.
Lastly, courage and boldness are key. With products, marketing, and pricing strategies already exhausted, the ultimate test lies in the willingness of manufacturers to take bold actions and confront their competitors head-on. In critical moments, business competition in the home appliance industry favors the strong and the brave, while the weak and opportunistic are likely to be sidelined.
Recently, many home appliance manufacturers have shown two distinct responses to the new round of the "trade-in old for new" policy. Some are actively seizing opportunities, leveraging policies and subsidies to drive sales, while others are complaining and blaming external factors, disregarding the essence of the activities with statements like "no matter the promotion or subsidy, the products just won't sell, they are useless."
This situation seems to hint at the varied states and outcomes of different manufacturers in the home appliance market during this year's 618 festival. Ultimately, success will require a mindset of daring to innovate, compete, and excel.
Copyright Statement: Original article from the home appliance industry, strictly prohibited from reprinting without authorization.
Disclaimer: Personal original content, for reference only.
