White electricity is a classification relative to black electricity, referring to white-appearing household appliances such as refrigerators, air conditioners, and washing machines. A significant feature of the white power industry is its high gross profit margin. For example, on behalf of the three giants Gree, Midea and Haier, the overall gross profit margin has exceeded 30%. Among them, Gree's air conditioning business has a gross profit margin of 38% in 2017, which is the holder of many years of records. It is curious that at present, there does not seem to be any Internet company that can break the high gross profit margin of white electricity. Even Xiaomi, which is about to go public in Hong Kong, has not successfully disrupted the white goods industry. What is the actual cause?
Since 2009, due to favorable policies such as "home appliances going to the countryside" and the vigorous development of real estate, the white power industry has entered a golden age. After the industry's tragic reshuffle, the three major brands of Gree, Midea and Haier have stabilized their leading positions and are underdeveloped in transportation. You can see the offline stores of these three brands in remote small towns. The white power industry has formed a mature system from product development to supply chain to sales channels. For any Internet company that may cross the border, the traditional giants will not easily cede the power of life and death.
In December 2014, Xiaomi, which was in full swing, invested 1.2 billion yuan in the US, accounting for 1.2% of the shares, and jointly launched a smart air conditioner. Can realize "one key operation", "one hand control" and other functions. It can also be connected to the Xiaomi bracelet, set to automatically turn on after returning home, and automatically sleep mode after falling asleep. The price is 3099 yuan. In the inverter air conditioner with the same configuration standard, compared with other series products of the United States, it does not show the cost-effective advantage, and it is even more expensive than other brands by a few hundred dollars, and the final market response is flat. At that time, Dong Mingzhu scolded Xiaomi and Mei for "two scammers", which should not be for eyeballing, but because they knew too well the industry.
In August 2017, Xiaomi ecological chain company Zhimi launched air-conditioning products. The arc evaporator is still a technology that was eliminated a few years ago. The price is 4,399 yuan. In addition to the MUJI style design, it has no competitive advantage. Lei Jun did not have a platform for this product, and he was not even allowed to enter the Xiaomi mall. The high probability is that he did not meet Xiaomi's pricing strategy.
The root cause of the two defeats is actually that Xiaomi cannot independently participate in the procurement and production of components. Without the right to speak in the supply chain, it cannot open the industry's technological black box. The core technology of the air conditioner is in the hands of the foundry Midea and Changhong. It is difficult for Xiaomi to have pricing power in front of the traditional giants.
The high gross profit margin of the white power industry essentially comes from the asymmetric information at both ends of supply and demand, especially the technical parameters of the core component compressor. Manufacturers will make it impossible for users who do not know how to distinguish them by producing multiple models of products.
In fact, the white power industry has its own unique technical barriers to ensure that the industry's high gross profit margin cannot be easily broken. Although the working principle of white electric products is very simple and the assembly and production of components are relatively easy, there are still certain gaps between the domestic and world leading levels of some core components, especially the compressor of the refrigeration system.
The compressor is equivalent to the CPU of the mobile phone, and the engine of the car is called the "heart" of the white goods. The larger the value, the better the performance. At present, Gree independently developed compressors have a maximum rated efficiency ratio of 6.3. Ten years ago, the market entry standard for Japan was that the compressor energy efficiency ratio reached more than 5. China only started to introduce compressor production technology and equipment from Japan in 1983, which is also a weakness of China's entire white electricity industry, and is still the direction that national industry is striving for.
In recent years, white goods companies have also tried to use the Internet to upgrade their products to provide services. Taking smart refrigerators as an example, it is possible to provide e-commerce services by analyzing food data, or to intervene in the medical and health field through "nutrition analysis". But the capabilities behind this, whether it is user operations or artificial intelligence, are far from being available to white power companies. Major manufacturers have nothing but the development of a mobile phone terminal, the effect is very poor. Eventually, it is impossible for the white power companies to transform from traditional manufacturing to the Internet.
In fact, the best-selling products on the market today are traditional hardware without any intelligent functions. And this has a lot to do with the use of white goods. The main consumption scenario of white goods is the decoration of new houses, and the consumption is based on the family. The distinctive feature is that the frequency of machine changes is particularly low. The designed service life of white goods is mostly around ten years. Low-frequency purchases and high-cost replacements determine that white goods cannot be as profitable as the mobile phone industry.
At the same time, China's consumption structure is changing. According to data from the Ministry of Civil Affairs, China currently has at least 200 million single people. White goods are generally home users, and single people, especially migrants in big cities, will not buy large household appliances in rented houses. White electric products can guarantee a high gross profit margin by raising the brand premium, so as to achieve "three years of non-opening and three years of opening".
Therefore, the white power industry has matured, the market structure is stable, and the intelligent transformation of the industry is still relatively difficult. It is also difficult for Internet spoilers to penetrate the supply chain, fail to break technical barriers in a short period of time, and naturally cannot control pricing power. In addition, the user scenarios of white goods products are attached to the home improvement industry to a certain extent. The purchase of low-frequency features requires companies to make enough money at one time. All these have determined that Internet companies cannot successfully transform the white power industry, even Xiaomi cannot enter.
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