Household appliance manufacturers' pursuit of annual growth seems to have been a mistake!
By Wen Jian
Have household appliance manufacturers who yearn for annual growth and breakthroughs ever considered a question? In the household appliance industry, is growth the only path to take? Can the market really keep growing indefinitely without worrying about hitting a ceiling?
In fact, over the years, no industry can keep rising without a fall, and no company can keep growing without stopping. While it may be understandable to pursue growth to outdo competitors, the current trend of forming alliances and partnerships solely for the sake of growth has led to complaints from manufacturers throughout the industry chain, resulting in everyone working hard but making no profit.
So, what is the purpose behind this pursuit of growth by numerous household appliance companies? Where does the value lie in doing so? Is success only measured by growth, and is decline considered shameful? Is survival only possible through growth, with no room for stagnation or decline?
Since 2024, especially entering the second quarter, the household appliance industry has witnessed conflicts and tensions among manufacturers due to the focus on operating and developing in the frontline household appliance market, as well as the fierce competition for customers. Many manufacturers have suddenly started to question why, during a period of declining demand in the frontline market, the management still demands the marketing team to maintain growth in performance and targets.
Is it reasonable or appropriate to set growth targets for companies in a market experiencing a downturn and falling demand? Could this be the root cause of the ongoing internal competition among frontline household appliance manufacturers in the past two years?
Undoubtedly, due to the rapid growth and development of the industry over the past 30 years, all companies and businesses in the Chinese household appliance industry have deeply ingrained the concept that "growth equals success, and decline is shameful." Participating in the competition and market grab in the Chinese household appliance market is seen as solely aiming for growth, with the belief that growth is the only goal. Any decline or stagnation in growth leads to penalties for the marketing team or even job losses for marketing managers.
Many household appliance companies are fixated on one goal: regardless of external conditions or strong competitors, the market revenue target must grow. A temporary decline may be acceptable, but if a decline persists for about two years, the team must be restructured. The motto is "no growth, change the team," and if changing the team doesn't work, then the team structure must be adjusted. However, there is no reflection on their own capabilities and shortcomings.
Setting a continuous growth target was acceptable for many household appliance manufacturers ten years ago, or even five years ago, with efforts and challenges being manageable. However, as the entire Chinese household appliance industry matures and the market shifts from growth to stagnation or decline, with primary user demands transitioning from incremental to existing, it is unreasonable for manufacturers to continue demanding growth in marketing team performance and profits.
The household appliance industry believes that this is not a matter of the team challenging themselves or striving for improvement but rather a complete disregard for market laws and the current state of industry development. Blindly pursuing growth not only exhausts a company's future prospects but also undermines past achievements and stability.
In just over a year, the excessive pursuit of growth by household appliance manufacturers, demanding continuous expansion, has begun to reveal the "aftereffects" in the household appliance industry, especially in the frontline market. It has been observed that this year, the commercial competition among household appliance manufacturers in the frontline market has intensified, leading to manufacturers joining forces to compete aggressively, resulting in many realizing that even "special offers" and "ultra-low prices" are not driving sales, essentially leading to losses and stagnation.
Moreover, many manufacturers, in their quest for growth, resort to all means to push out products and secure orders, resulting in unprofitable operations, compromised product quality, and lack of service guarantees. In the short term, leading companies in the frontline market can squeeze out market share from small and medium-sized enterprises and even eliminate them for development. However, in the medium to long term, in relatively mature industries and environments, unrealistic growth will only increase internal consumption, forcing companies to compromise on product quality and integrity, depleting their foundation and credibility.
Currently, the pursuit of growth-driven business development and breakthroughs is deemed more harmful than beneficial for many household appliance manufacturers, leading to more losses than gains. The household appliance industry believes that continuous growth does not equate to success for manufacturers; instead, it hampers the company's long-term vision, depleting profits and development momentum.
It is foreseeable that the pursuit of continuous growth is truly detrimental! Especially in recent years, under the economic and market conditions, demanding that household appliance companies and businesses achieve growth in market shipments and operational profits, without any decline, will lead many market teams into a quagmire and cause some companies to operate at a loss.
Starting from the third quarter of this year, many household appliance companies need to abandon unrealistic desires for scale growth and focus on restructuring operations and increasing profits in a non-growing or declining market environment!
Copyright Statement: Original article from the household appliance industry, strictly prohibited from reprinting without authorization.
Declaration: Personal creation, for reference only.
