In the eyes of many manufacturers, the trend of the home appliance market in the first quarter of 2024 is not simply good or bad; it cannot be summarized in one word or sentence, and it is unexpected. The feeling is that all experiences and patterns no longer work, all new strategies and means have not been found, but the market is changing, users are changing, yet it is unclear how to compete, how to fight.
The performance and trends of the home appliance market in the first quarter of 2024 have left a deep impression on many home appliance professionals.
The reason is not "the market rebounds strongly, and consumer recovery is steady"; nor is it "the market continues to slump, and terminal shipments are sluggish." Instead, it is that "all home appliance manufacturers can no longer grasp the competitive logic and development logic of the market" and can only passively participate in the market competition, without clearly understanding what they are ultimately competing for and why.
As for the first quarter of the home appliance market this year, it is currently observed that there are three main characteristics:
Firstly, the market is very hot internally, especially the policy-driven opening and pressure to deliver goods to channel retailers by home appliance manufacturers, one round after another. Although it eventually led to the situation of "high opening and low closing" in pressured deliveries, the overall market heat started earlier than expected. The shipment tasks of many leading enterprises' popular categories have reached about 40% of the annual target, exceeding expectations. Correspondingly, retail sales in first-tier markets are very sluggish, with a more noticeable decline compared to the same period last year. Except for the air conditioning category, which is slightly better, other home appliance categories are very bleak. Many users simply do not make purchases, either waiting for something or not wanting to replace their appliances at all. Retail shipments are extremely pessimistic, either experiencing a drastic decline or a three to fourfold fall.
Secondly, since the beginning of this year, the home appliance market has seen major manufacturers' confidence and actions, with continued release of promotional efforts, which have boosted market enthusiasm and partner confidence in the short term. Moreover, it is clear to see that major enterprises are currently launching a comprehensive offensive strategy of "multi-channel, multi-category and multi-brand, multi-business" instead of relying on betting-style business strategies, but strengthening precise deployment and effective management. It can be said that the advantages of large enterprises and large retailers are becoming increasingly obvious, squeezing the survival space of many small and medium-sized manufacturers. Correspondingly, a large number of small and medium-sized manufacturers are more inclined to go with the flow, relying on their own resources and strength to seize the market, rather than blindly overdrawing, resulting in a lack of stamina and breakthrough. The polarization of management among home appliance manufacturers is very apparent.
Thirdly, internal competition in the industry has been fully upgraded, from the initial price competition, marketing competition, and product competition among peers, to major home appliance manufacturers competing internally with their own channel retailers and partners. The most obvious example is platforms such as JD.com and Tmall, which have continuously pressured franchisees, bulk purchasers, and even smugglers since the start of the market in the first quarter of this year, even using periodic large orders and special price releases to suppress the operating momentum of their own town and township franchisees, forcing internal competition among different merchants in the system. Facing internal competition, more township dealers have chosen different strategies and attitudes, simply choosing to lie down and not participate in internal competition, or temporarily going with the flow without blindly overdrawing. They simply do not want to get involved in the chaotic market and turmoil.
The emergence of this market situation this year is not simply a matter of the market getting better, consumer recovery, or fiercer competition and brutal competition; it can provide valuable references for the trends of the home appliance market and manufacturer competition strategies in the second quarter of this year.
Firstly, the development of the home appliance market this year was not supposed to be full of more variables and greater changes; it was simply that user demand had indeed greatly decreased, leading to many home appliance manufacturers' chaotic battles, chaotic punches, and continuous blunders, making the originally simple market and competition become complex and disorderly. The situation where chaotic punches kill experienced craftsmen always occurs, leading to market chaos and disorder. This situation is more common in the market in the second quarter of this year. Some manufacturers have adhered to the value competition of "good products, good services, and good experiences" for many years but cannot exert force.
Secondly, in the competition for the home appliance market, manufacturers should not overdraft blindly or be overly anxious. They should not continue to overdraft the market and user demand at low prices but should strengthen the sustainable development of market operations and focus on improving the quality and service capabilities of customer experience. In situations where market and user demand are limited, excessive low-price competition cannot capture the market and can only overdraft manufacturers' profits and survival space.
Furthermore, the business philosophy and competitive means of major home appliance manufacturers need to be adjusted. They should not be overly entangled in process and method innovation but should directly address customer and user needs in the market through "more good products, more sound operational services, more standardized channel management, and sustainable development momentum." This way, they can explore new business philosophies and competition models in the "surplus supply and surplus competition" cycle. That is, "the strong are king and the rest are also kings."
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