Home Appliance Manufacturing Transformation Competition, who runs slow who is out

　[Abstract] household electrical appliances manufacturing industry is undergoing transformation and structural upgrading period, which will be a change and be transformed by the tide of sand, running slowly a group of home appliances manufacturing brands will face out of danger.

Tencent Science and Technology Fan Yong April 30 Report

Pearl River Delta has been China's home appliance manufacturing industry's largest industrial cluster, more than half of the annual home appliances products are produced here, export, and thus to all over the world. But it should have been China's largest home appliances manufacturing scale of the prosperity of the country, since the spring Festival, Guangdong has been due to the transformation of enterprises in the labor seeking-type strike incidents:

April 15, Zhongshan City, Guangdong Province, the factory was smashed by employees, participants hundreds of people;

April 17, Gree electric appliance was exposed to deduct employees tens of millions of bonuses, suspected of breaking the workers, and was detained on the "sweatshop" hat.

In contrast, in 2 months ago, the Pearl River Delta has a shortage of labor and led to a corporate pay increase but recruitment is difficult to find. In the view of one industry, the root cause of the company's employees ' failure is its consistently low price strategy, and when the demographic dividend disappears, low profits from low prices will not be able to meet the rising cost of labour.

In recent years, the Pearl River Delta has been the first to receive demographic dividends after the reform and opening-up is disappearing, a large number of workers are flowing to the country.

Xiao Zhang's family has contacted a local electronics company to go back to Chongqing, a young man who just resigned from an air-conditioning factory in the Pearl River Delta. "If wages do not rise too much, the cost of living in the home to work is low, but also a sense of belonging." "Xiao Zhang told Tencent technology, like him to return to his hometown of workers a lot of jobs."

"The cost of labor in recent years has accounted for 30%-40% of the cost of enterprise sales, enterprises can only continue to increase profits in order to comply with the rising demand for labor costs, otherwise it will form a vicious circle, or even death." "A U.S. business director, who declined to be named, said to Tencent that the home appliance manufacturing industry is undergoing transformation and structural upgrading, which will be a change and a wave of change, and a slow run of a group of home appliances manufacturing brands will face the risk of being out."

Household appliances policy and the burden of loss of population dividend

In the Pearl River Delta, the private enterprise of the company, the microwave started. In the industry has "price butcher" of the said, the microwave oven has 12 consecutive years in the Chinese market sales first. 1999, the LAN Shi Microwave oven occupies more than 70% of the domestic market market share, Grant became a well-deserved microwave.

Since then, the group found that this niche product could not meet the future development of the enterprise, starting in 2000 from the microwave oven to air-conditioning, refrigerators and washing machines, and has been replicating the microwave oven's "high scale, low-cost" way.

Although the air conditioner, refrigerator, washing machine brand pattern has been gree, the United States, Haier formation of the trend of three carriages, but up to 7 years (2007-2013) of the long home appliances to the countryside, with the old for new policy dividend, so that the air conditioning, washing machines, refrigerators low-priced products still get a certain market space.

7 years, a number of new household appliances, small brands, even like the name of the group in a certain category behind the brand, are bathed in the policy dividend.

Relevant data show that home appliances to the countryside policy led to more than 740 billion yuan, the total sales breakthrough 300 million units of rural household electrical appliances consumption. Tencent Science and technology learned that the home appliances category brand in 2012 years ago reached more than 200, but the policy dividend disappeared lag, half of the household appliances business has disappeared.

Domestic appliances demand in the previous few years after the policy dividend stimulus, 2012 years will appear overdrawn trillion, 2012, a group of household appliances brand nine Yang, small swan, Hisense Kelon, Hefei Sanyo, million home music and other achievements began to decline.

Relevant agencies survey data show that big TV, refrigerators, air-conditioning, washing machines and other large household appliances 2013-2014 sales growth slowed down and will show a 2%-3% decline.

Meanwhile, the continued rise in labor costs has made home appliances more embarrassing. Skyworth Group President Yang Dongwen has been under pressure two years ago, he accepted Tencent Technology interview that Skyworth TV OEM factory gross margin of less than 5%, this part of the overall corporate profits. and general OEM manufacturers General gross profit margin in 3%-4%.

"Manufacturing plants do not have large-scale funding for technology upgrading and transformation, good product rate and industrial level can not keep up, but also become porters, no profits." "has been for Tcl, Hisense, Whirlpool, Electrolux generation of Austrian electrical appliances, said Tencent technology, gathered in the Pearl River Delta, a group of small household appliances to live on behalf of the factory began to retreat slowly.

Manufacturing links to the low profits, so that some of the domestic brand of home appliances began to choose to outsource the factory. Since 2009, Haier will be 3 C, small household electrical appliances, color TV began to outsource to Taiwan Foundry Enterprises Crown Czech. Sony has even outsourced the production of its high-end LCD TVs to Foxconn and weft-hit, and Samsung has outsourced some of its washing machines to small swans.

Trapped in the "price war" cycle

2013, the Internet tide began to let a group of home appliance Enterprises into the transition period, and began to embrace the Internet. TCL, Skyworth, Hisense representative of the color TV enterprises, Haier, the United States for the representative of the White household appliance enterprises began to use the Internet user thinking, access to additional hardware. Tcl Chairman Li said that the next 5 years, TCL products and service profits accounted for 50%, Haier overall to the platform and user transformation, the United States and Alibaba to establish a smart home ecological circle.

From the White household appliances category (air-conditioning, washing machines, refrigerators), are gree, the United States, Haier three brand control. But the Internet of home appliances let the second-line brand began to take advantage of the low operating cost advantages to let go a stroke of mentality. Grant, the ox since last year began to use low price means to carry out an action, grant even launched "999 yuan drum washing machine, 1299 yuan air-conditioning." ”

At present, home appliances brand concentrated into the vacuum period, in the hardware low-cost, service and the added value is still zero, the home appliance brand profits will continue to shrink.

"Low profits and low prices are the reasons why the people are not cashing in on their workers ' wages," he said. "An employee who just left the company soon said to Tencent Technology. In 2012, the largest competitor of the Grand Micro-BO, the United States has stopped the products below 599 yuan, and in 2013 by the United States of the microwave to overtake.

Compared with the high concentration of white power brands, the relatively balanced market share of the color TV brand, is in a more dangerous situation. In the first quarter of this year, each color TV brand performance Aihongbianye, TCL Multimedia, Konka White electricity and multimedia business, Skyworth, etc. appear downward trend.

Facing the first quarter profit year-on-year drop 93.1% of TCL Multimedia Business, its CEO Shanyi said in the conference call, the first quarter of new product launch delay, did not achieve the expected ratio, so the gross margin was affected. In addition, China's domestic color TV market weak performance, intensified market competition and the average price decline trend, all drag down the first quarter results.

Since last September, a group of millet, music as the representative of the Internet enterprises to be the first to disrupt the color TV industry. Since then, TCL Archie Art, Konka KKTV, Skyworth cool Open, Helmoca, such as the launch of a round of price war, 49-inch 4K TV 2999 yuan, 50 inches 3999 yuan, 65 inches 5999 yuan ...

According to the relevant data companies, from September last year to March this year, the mainstream size of 55 inches, 50-inch price reduction of 20%. "Internet transformation is a catalyst rather than a fuse." Allwin Consulting (AVC) assistant President Chuang said that the saturated market under the excessive competition is the root of the decline in the profits of home appliances enterprises.

China Electronic Chamber of Commerce Deputy Secretary-General Lu Xianbo that the home appliance brands continue to fall into the price war muddy, will face a new round of shuffle.

"To make" is a trend, but it's still too early.

Yao, dean of the National Development Research Institute of Peking University, said in a recent forum on Guangdong Home Appliances: "5 years or so, manufacturing began to shrink, which means that many home appliances enterprises to be eliminated." ”

He believes that China's total economic and manufacturing output in the past 30 years, experienced a long-term rapid growth stage, but this time period of high demographic dividend and relatively low exchange rate, low labor and raw material prices, coupled with China's accession to the WTO, Japan and Europe and other economies slowed down, The surrounding areas have been hit by times such as the economic crisis, but manufacturing will be extremely weak over the next 10 years.

has been relying on manufacturing production, marketing, channel industry chain vertical integration as the advantages of home appliances enterprises, manufacturing has come to an end? Austrian latitude Consulting (AVC) flat Division general Experience Chuang that, at present, home appliances enterprises will be part of the production of low efficiency of manufacturing end gradually, but it is too early to discard the manufacture completely.

In the case of Gree, Haier and the United States, in the air conditioning industry, gree air Conditioning occupies 50% of the share of the United States, small household electrical appliances have accounted for 70% of the share, Haier in the washing machine, water heaters occupy more than 30% of the brand, these categories and scale to form a market dominance of the brands, and will not be this part of the profit and

Household Appliance analyst Liang that the brand premium capacity is the key to the complete manufacturing, at present, the household appliance product homogeneity, the brand value is weaker, whether it is the core of the color TV palette, air-conditioning, refrigerators and other compressors do not master the core or exclusive technology, it is difficult to like Apple, Mobilizing global resources to the top end of the value of profits.

At present, the United States, Gree, Changhong, such as more by diversification and market monopoly advantage, improve the manufacturing process efficiency. It is reported that the United States began in the factory in lieu of artificial production, improve the factory automation equipment ratio. Changhong last year began to put forward intelligent manufacturing, ie (Industrial Engineering) +it (information) +at (Automation) mode.

"Home appliance transformation is easy to talk about, but it's really hard to do." Yang Dongwen accepted the Tencent technology interview that the large manufacturing body is not suitable for turning sharp corners, but how to turn big bends.