Home appliance industry performance pre-loss enterprises to reduce prices to find a way out

The third quarter financial report of the household appliance industry is coming soon, and its forecast release is in full swing. Looking at many performance forecasts, "loss" and "big drop" have become the keywords for many third-quarter home appliance companies.

In the face of loss-making status, home appliance companies have started to cut prices and they are looking forward to "turning the corner off". However, in the eyes of industry experts, the development of products that truly meet the growing needs of consumers is the real solution for home appliance companies. After all, “grasping with consumers is the key”.

Industry Status

Poor performance of many companies "pre-losing"

According to the research report of the Donghai Securities Household Appliance Industry recently released, the current sales of home appliances in China still maintain a certain growth rate, but the growth rate has fallen sharply year-on-year, especially in the third quarter of this year, which is significantly lower than the growth in the second quarter. speed.

Since the implementation of the real estate control policy, the growth rate of the sales area of ​​commercial housing in China has gradually eased, and the market demand for household electrical appliances has also decreased. Not only that, the dark shadow of the European debt crisis has not yet dissipated, which also makes China's home appliance exports face greater uncertainty.

Indeed, the recent quarterly announcements of listed companies in the home appliance industry are also worrying. According to statistical data, as of now, among the 26 companies that have released three quarterly forecasts in the industry, two companies, Konka Group Co., Ltd. and Shenzhen Tongzhou Electronics Co., Ltd., have suffered a loss, and Meiling and St. Leida The performance of five other companies has also dropped.

Cause Analysis

High cost of domestic brands is difficult to profit

The reporter inquires a number of companies in the third quarter report and found that the reasons for the loss or decline in the performance of home appliance companies are as follows:

First of all, since the beginning of this year, the competition in domestic color TV sets and mobile phone services has become increasingly fierce, and the prices of products have been declining. With the speed of product updates, the company's R&D costs and manufacturing costs have also increased.

Secondly, foreign brands adopt low-price dumping strategies in the Chinese market to seize market share in China. The retail price of the whole machine continues to decline. The profitability space for domestic appliance brands is continuously being squeezed, and the profitability of domestic brands has fallen sharply.

Once again, tightening monetary policy has increased financing difficulties and financing costs, leading to increased financial costs.

Fourth, due to factors such as the increase in local minimum wage standards, rising CPI, and the implementation of the housing provident fund system in Shenzhen, artificial (excluding manufacturing) salaries and housing provident funds resulted in an increase in labor costs.

In addition, Tongzhou Electronics also stated that the cause of the loss was “the profitability of the set-top box market has been declining and the competition is fierce, and the digital TV industry is ushering in rapid development. Therefore, the company focuses on the introduction of wired intelligent digital all-in-one machines from 'non-screen' terminals. There is a screen 'terminal transformation'.

Business response

Reduced price promotion into a way out for home appliance companies

In the face of losses, how can many home appliance companies stand out from the fierce competition and make a beautiful comeback? The reporter found that many companies have already taken measures - price promotions.

The reporter saw today the new egg net and Jingdong Mall, Meiling refrigerators and pressure cookers, air-conditioning fans and other family appliances all promotions. Among them, Jingdong Mall has adopted a direct sales promotion method. The price reduction of each refrigerator ranges from 200 yuan to 500 yuan, and the maximum discount is 60%.

The price of new egg network is more favorable, online purchase price is nearly thousand dollars cheaper than the market price. Among them, Meiling Athena series of refrigerators on the market price of 6680 yuan, while the new egg network for only 5348 yuan.

In addition, Konka TV is also being promoted on major websites. The current discount rate is basically maintained at 60% off the market price. For example, Amazon's Konka 32-inch high-definition LED TV, from the market price of 3699 yuan directly to 2209 yuan, the current product is only 3 pieces.

Industry perspective

Product innovation can catch consumers

For the current situation of some home appliance enterprises in China, the slowdown in sales, the Hong Shibin, deputy director of the China Household Electrical Appliances Marketing Committee, said that only by developing products that truly meet the growing needs of consumers can household appliance companies “kill a bloody road”.

Hong Shibin's multi-cylinder washing machine with the United States example shows that the traditional washing machine is a laundry tub, put the clothes together to wash, while the United States designed a conceptual product, washing machine with four laundry buckets, can be different for different clothing at the same time Washing will save time and power, and ensure hygiene. Once the product was launched, it was sought after by consumers.

Hong Shibin believes that the success of the United States is that there is no similar product on the market, and other brands want to copy, compete with it, but also because there is no matching technical support and unsuccessful. In the future, such products will not only avoid price competition, but also leave enough room for sales.

Hong Shibin said that in the face of fierce competition, China's home appliance manufacturing enterprises want to break through to require companies to adapt to the situation, analyze their own characteristics, find new profit growth points, realize technological transformation and service transformation, so as to effectively avoid homogenous products. Vicious low-cost competition, to find and ensure sufficient profit margins, only in this way can dominate the market competition.

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