Urbanization channels for home appliances are still short

Every 1 percentage point increase in the urbanization rate in China will drive 7 trillion yuan in market demand. Specific to the home appliance industry, if China's urbanization rate reaches 62%, the rural market will accumulatively increase sales of home appliances by 4.5 trillion yuan, and cumulative sales will exceed 9 trillion yuan.

The tertiary and tertiary markets, including the rural areas, have always been the gold mines that household appliances need to dig. Together with the current national strategy for urbanization, this market has become particularly attractive. The simple urbanization can shake up the market space of 4.5 trillion, which has attracted numerous home appliance manufacturers to "compete." But the distance between the market and the sales step seems to be particularly distant in this market. Even in recent years, whether it is active or passive "down to the countryside" activities continue, but home appliances manufacturers really do not seem to benefit, most of them are a loss to earn money. Why is it so far?

In recent several different types of home appliance summits, many people in the industry still focused on the channels. “After looking at several times before and after the home appliances to the countryside, at best, only the manufacturer's brand went to the countryside. Because of the lack of channels, few commodities really go to the countryside. In the end manufacturers and consumers can hardly get benefits.”

If urbanization is invigorating the market space, if this problem cannot be solved, it may only be a beautiful bubble in the end. Some people in the industry pointed out that the layout of the three or four-tier market is more complicated than that of the first and second-tier markets, and it cannot be simply copied. It must be changed.

Urbanization new engine

At present, the home appliance market, the industry's overall excess production capacity, urban household appliance ownership tends to be saturated, the market sales situation is not optimistic. However, from the perspective of sub-regions, the household appliances market in the 3rd and 4th grades has shown a trend of sudden emergence, and the imbalance between supply and demand caused by insufficient regional supply will become the development opportunity for the home appliance industry in the future.

At the 2013 China Rural Household Appliance Market Channel Transformation Summit Forum held in China, the president of Sino-Iconomy, Lian Siqing, believes that compared with the saturation of the primary and secondary markets, there is still room for improvement in the household appliance rural market, and the speed of urbanization is increasing. The cluster effect will make the rural market the next fastest growing point in the home appliance industry.

According to the China Yikang Research Report, China’s 3rd and 4th appliance market has a population of 70% of the country and contributes 40% of the country’s retail sales of consumer goods, which has a huge influence. Data show that in 2011 China's three or four household electrical appliance market sales reached 540 billion yuan, the market growth rate of more than 20% for four consecutive years, far exceeding the industry growth rate, becoming the main source of growth for the Chinese home appliance market.

Cao Kuangping, chairman of Huiyin Appliances, which has been committed to exploring the rural household appliance market, told reporters that the mainstream of China's future consumption must be in the 34 markets. Especially with the acceleration of the pace of urbanization in China and the introduction of the income doubling plan, this trend has become more likely.

According to the forecast of the National Bureau of Statistics, a one percentage point increase in the urbanization rate in China will drive 7 trillion yuan in market demand. Jiang Feng, chairman of the China Household Electrical Appliances Association, said that by 2020, if China’s urbanization rate reaches 62%, the rural market will accumulatively increase sales of home appliances by 4.5 trillion yuan, and cumulative sales will exceed 9 trillion yuan. .

Even Siqing also believes that the acceleration of urbanization will bring about policy dividends for the development of third- and fourth-tier cities. During the “12th Five-Year Plan” period, the level of urbanization in China will reach around 60%, and the home appliance retail industry will share the long-term dividend of this social development. At present, there are about 500 prefecture-level cities in the country, more than 2,100 county-level cities, more than 40,000 townships and villages, and rural families account for 67.6% of the total households. However, in the vast rural areas, household appliances such as ice, washing, air, and color, etc. The amount of ownership lags far behind the city.

The channel is still short

Urbanization of the light has shaken the market space of 4.5 trillion yuan. It is no wonder that major home appliances manufacturers have made every effort to open up the market for three or four levels. As the top priority for home appliance sales, it is no exception. After all, the future development of home appliance companies in the rural market is still a contest between channels.

In fact, as early as 2005, the home appliance chain giants Gome and Suning had all taken the lead in making plans to enter the 34 markets, including the rural market. But until now, only Suning had tried to open townships, but Now it has become the main target of adjustment of Suning stores. And Gome, this strategy has only stayed at the planning level until today.

Why so far? A number of people in the industry believe that the competitive landscape of home appliance retailing industry has shown a trend of a large chain of strong subsidence, a regional chain of vertical and horizontal links, and a rapid expansion of branded stores. However, before the home appliance chain giants are both direct sales and large stores model, the operating costs are higher, the direct operation of the Damai Chang's operation and management methods obviously can not duplicate copy of the resources in the rural market.

Therefore, this provides room for the development of Huiyin Home Appliances and multi-storey regional home appliance retailers with direct sales and franchising. However, the current problem is that the current consumers have changed, e-commerce has risen, and how to meet the different needs of emerging consumers, the traditional physical stores are tested.

Suning and Gome also saw this point, simply using e-commerce to re-arrange three or four cities. This will not only help avoid the disadvantages of the two large stores and direct operations in the region, but also help meet the needs of emerging customers. Kill two birds with one stone.

Mr. Jin Ming, president of Suning Cloud Commerce Co., Ltd. made it clear that Suning will comprehensively promote the regional market strategy and make great efforts to optimize and adjust the network layout and service capabilities. Rapidly promote the construction of regional flagship stores, intensive cultivation in the first- and second-tier cities in the suburbs/counties and three or four markets. In 2013, 200 new regional flagship stores will be opened and upgraded, and 1000 regional flagship stores will be built in the next three years. In the regional market, a group of 100 million stores, 200 million stores and 300 million stores will be created, highlighting the competition in the 3rd and 4th markets. Advantage. At the same time, it actively adjusted the closure of community stores and township stores to further improve the layout of the chain network.

However, it is worth noting that in the 3rd and 4th markets, the number of flagship stores will be limited, mainly to meet consumer demand for experience and to meet e-commerce development needs. As for Gome, it has basically adopted the same model as Suning is advancing.

However, Cao Kuang-ping has different views. Cao Kuangping believes that customers now pay more attention to experience, and online price comparisons and offline services require multiple after-sales services, which require as many outlets as possible. Only by satisfying customer needs can we have a long-term foothold. Therefore, it is necessary to have more outlets in three or four levels of shopping malls, which is also their advantage.

However, in the face of the diversion of e-commerce and the emergence of new groups after 80 years and 90 years, as well as the continuous localization, socialization, and mobilization of consumers, the multi-channel distribution of traditional home appliance retailers is also a must. Therefore, Huiyin Home Appliances completed the establishment of its own e-commerce platform, Lehu.com, and also landed on third-party network platforms such as Tmall, E-Express, Amazon, No. 1 and Jingdong. In the realization of "online and offline integration", also completed the diversified layout of e-commerce channels.

It can't be denied that pure e-commerce should deepen the 3 or 4 level market, and the challenge may be greater than the traditional channels. The most important pressure comes from the construction of the logistics and distribution system.

In cities, e-commerce providers can make accurate and accurate estimates of warehouse and vehicle configurations based on the urban population density and the frequency of users' online shopping, so as to ensure the maximum coverage radius of logistics and distribution. However, cities and towns are usually far away from cities and geographically dispersed, and the population density and the average number of online shopping are far less than those of cities. E-commerce companies are faced with both data and experience. Twenty-four hours of delivery and installation in cities can be difficult to achieve in some remote towns.

The complexity of the layout of the market channels for the tertiary and tertiary markets is not surprising. It is no wonder that Wang Huanjiang, Chairman of the Board of Directors of Duo Fangda, stated that companies must change their minds when operating channels in the tertiary and tertiary markets. But which model is more suitable may still need to be left to the market to test.