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Building blocks can create concepts, but it is difficult to create blood.
Author丨Wang Siyuan Editor丨Yiye
Source: Science and Technology News
In the home appliance market in recent years, product upgrades and iterations have begun to slow down. Whether it is large appliances represented by air conditioners and refrigerators, or kitchen appliances and small appliances, it is basically difficult to see disruptive innovations.
Even the seemingly novel products such as dishwashers, integrated stoves, and floor washing machines are just localized improvements of old foreign categories in the Chinese market.
Now that the innovation of the home appliance category has come to an end, it is difficult for new technologies to appear on hardware products. Many brand enterprises began to drive innovation with soft drive, and launched a series of home appliance solutions with the help of the Internet of Everything, trying to solve the sales problem.
Not long ago, Fangtai Group, the representative of the domestic kitchen appliance track, held a 2022 annual press conference to launch a set of kitchen appliances and the first refrigerator product. In the post-home appliance micro-innovation era, push-set and extension categories have become Fangtai’s “straw”.
It’s just that these two “straw” can save a life or crush a camel in the future, and we need to be cautious.
Part.1
From one Red Sea to another
Refrigerator has long been a sunset business.
Aowei Cloud (AVC) omni-channel push total data shows that since 2016, the domestic refrigerator market share has entered a stage of stagflation. In the first half of 2022, the retail sales of the refrigerator market was 15.07 million units, a year-on-year decrease of 5.5%; the retail sales was 45.6 billion yuan, a year-on-year decrease of 3.4%.
However, there is a more optimistic data showing that in 2021, the retail sales of the refrigerator market will be 31.88 million units, a year-on-year decrease of 2.1%, and the retail sales will be 97.1 billion yuan, a year-on-year increase of 7.9%. That is to say, it is difficult for consumer demand to have obvious favorable currents, and the market is moving towards high-end.
Pei Dongmin, research director of Aowei Cloud’s Home Appliances Division, believes that in the first half of the year, the refrigerator market continued to steadily advance the process of high-end development, and major companies reflected both product line development, brand and value output. “Going high-end” is setting off a wave in the transformation and upgrading of brands.
It is worth noting that Fangtai entered the field of refrigerators, and the first product launched was the so-called high-end refrigerator, which was in line with the development trend of the industry. And according to Li Jian, general manager of Fangtai’s comprehensive product line, the launch of refrigerators is also in line with the return of the value of refrigerators from the hall to the kitchen, and complements the pre-cooking sequence.
In fact, affected by multiple factors such as real estate regulation and the involvement of black and white electricity giants in recent years, the overall growth of the kitchen appliance industry has been sluggish, and the situation of traditional kitchen appliance companies is even less optimistic.
According to the total data pushed by Aowei Cloud, in 2021, the overall scale of the kitchen and bathroom market (stove, washing, embedded heat collection) will be 91.56 million units and 152.8 billion yuan. Retail sales fell 12%, while retail sales rose 1%. Even in 2022, the traditional “three major items” still have not rejuvenated, and retail sales continue to decline.
In addition, many black and white home appliance companies, including Skyworth, TCL, Midea, and Haier, have entered the market. With the advantages of capital, channels, and brands, the competition in the kitchen appliance industry has become more and more fierce.
From the perspective of new knowledge of science and technology, in this case, it is indeed a way for kitchen appliance companies represented by Fangtai to maintain growth and promote category expansion. As the product closest to the kitchen, the refrigerator is in line with the business strategy of kitchen appliance companies and can also clarify its own business positioning.
The mid-to-low-end refrigerator market has already been divided up by white goods giants such as Haier and Midea, and the high-end market has great potential for development. It is not difficult to explain why Fang Tai came up to point to high-end refrigerators.
It’s just that in the high-end refrigerator market, giants have already successfully occupied positions. Haier, Midea, etc. have launched high-end brands. In addition, overseas brands such as Siemens, Sony, and Panasonic have been working in the high-end market for many years since they entered the domestic market. Some barriers were erected.
Fang Tai has been planning to enter the refrigerator for many years, and choosing to launch products at this time is not the best opportunity, and it will test the company’s business determination. From this point of view, how to implement a differentiated strategy after the launch of Fangtai refrigerator is the key point.
After contacting a number of home appliance dealers, Tech News found that the people who currently buy high-end products are basically old users, and there are at least 5 kinds of home appliance products at home, such as Casarte, Siemens, COLMO and other brands with mature user recognition. It is easier to sell, it does not require a lot of effort to recommend to users, and basically the transaction time is very short.
The above-mentioned dealers also revealed, “In the sales of high-end products, users generally care about the price, but pay more attention to services such as installation and design. Now many families are pursuing the integration of home appliances and cabinets, which requires color matching. The integration of size and size. In addition, follow-up service is also an important part, and big brands are relatively more secure.”
Although Fangtai is better than the Boss, Meida and other track companies in terms of R&D investment, marketing expenses, number of stores, etc., but since it has crossed the border, it has to face the giants such as Midea and Haier. gap. If you want to find the dawn in this market in the future, you need to work harder on brands, channels and core technologies.
Part.2
Is a complete set of kitchen appliances better to sell?
In addition to the refrigerator, the top of the conference also launched a set of home appliances. It is reported that the set includes an integrated cooking center, dishwasher, water purifier, water heater, refrigerator and other items.
The concept of a set of home appliances has existed in the home appliance industry for more than ten years, and the specific source is difficult to study. The “White Paper on User Insights of Complete Household Appliances in China” pointed out that the number of households buying complete sets of home appliances in developed countries in Europe and the United States will account for 30% of the total in 2020, and the details of the concept are also clearer: complete sets of home appliances in the European and American markets are often related to refrigerators, ovens, and dishwashers. When kitchen appliances are strongly bound, other types of electrical appliances are hardly involved.
The same is true in the domestic market. The earliest and most popular set is the smoke stove. The set-up of the kitchen can be said to be the originator of the set-up of all kinds of home appliances.
According to the “2022 China Package Home Appliances Research Report” released by Aowei Cloud, the current market capacity of home appliance package purchases is as high as 153.8 billion yuan, and it is expected to reach 176 billion yuan in 2023.
The good market trend of “money” and the innate advantages of the kitchen appliance industry seem to mean that Fangtai sets of household appliances will sell well, but is this really the case?
For a long time, the industry has not limited specific categories and scenarios to set home appliances. The complete design, marketing and sales of different categories of home appliances can basically be called set home appliances.
In order to allow consumers to accept sets of home appliances that focus on the mid-to-high-end market, major manufacturers have made improvements in three aspects: appearance design, functional ecology, and after-sales service, trying to make home appliances sold in sets more attractive than products sold individually .
It is undeniable that the set of home appliances unifies the design styles between different home appliances. Consumers can buy a good-looking complete set of appliances without making a list or repeatedly selecting, which was rarely seen in the past.
However, the functional level is still lacking. A considerable number of products have only achieved the complete set of appearance level, and have not made more efforts in the functions and scene-based experience that can generate linkage reactions. Even if there are, most of them are preset capabilities that are few and far between and require additional learning from users.
Going back to Fang Tai, the Yueying series released does not seem to solve this problem effectively.
Whether it is a press conference or a publicity draft, Fang Tai’s introduction to the series is mostly in appearance. Conceptual words such as “Oriental Aesthetics” and “Traditional Aesthetics” support the design language of the entire series, and even the theme of the conference is “appreciating the beauty of Yue and seeing the brilliance of the shadows”.
In terms of function and ecology, the official said that the system has achieved three major technological breakthroughs in smart central control large screen, AI smart eye, and automatic cooking pot.
However, from a closer look, it is mostly the functional design and upgrade of a single product, while in terms of product interconnection and interaction, only a large screen is added to the range hood to realize the linkage of the series of products. This is similar to the logic of the mobile phone to control the independent APP, but the control center is transferred from the mobile phone to another screen.
The main function of AI Smart Eyes is to be able to sense the concentration of oil fume and adjust the suction independently. Non-professional kitchen appliance brands such as Yunmi have similar products, and Qiantai has already launched similar products in the past two years; the automatic cooking pot is the so-called automatic cooking pot. Home appliance companies such as Midea and Joyoung have already launched them, and there is not much new idea.
To sum up, how many consumers can be attracted to buy a whole set and replace it with such a practice of “building blocks” and “creating concepts”?
In addition, it is also necessary to see that the current Chinese household users’ cognition of home appliances is still in a stage of training, education and guidance. More good products, good services and good experience can truly bring consumers Sets the value and significance of home appliances.
How to give up the “harvest strategy” similar to most manufacturers and make innovations that can truly meet more needs of users, Fang Tai still needs more effort.
Part.3
The new pattern does not fit into the old story
Looking at most companies in the kitchen appliance industry, whether it is the financial report of 2021 or the semi-annual report of 2022, the financial data shows that with the regulation of real estate and the cyclical adjustment of the macro economy, there is a round of stagflation and slow-moving as a whole.
In the face of the industrial dilemma, kitchen appliance companies seek diversified expansion in the kitchen and family scenarios, which has become a new direction for the industry. Fangtai, Boss, Vantage, Wanhe, etc. have all started multi-brand operations and carried out a new round of large-scale expansion.
For Fangtai and other kitchen appliance companies, a realistic truth is: if you fall behind, you will be beaten, and if your strength is small, you will be bullied. Only relying on mature kitchen appliances, as well as emerging new categories such as dishwashers and integrated stoves, is no longer enough to bring more business opportunities for the expansion of enterprises in scale.
Moreover, the innovation of the kitchen appliance industry in the field of science and technology mostly focuses on the integration of external technologies, and such innovations are easy to be imitated. Whether it is Fang Tai, the boss or Vantage, none of them have absolute leading positions, and it is difficult to widen the gap between economies of scale and management capabilities.
Coupled with the layout of a large number of comprehensive home appliance giants in the kitchen appliance industry, the competition of various brands in the future may focus on product marketing and channel capabilities.
This means that even if Fang is too diversified and successful in the future, the set of home appliances launched will be recognized by the market, but it will soon fall into the “fight” with the lowest threshold of marketing and price war.
The competition in the current kitchen appliance industry has become very complex, with channel changes, product changes, market migration, etc. affecting the whole body. For Fang Tai, it is particularly important to change the business model, operation style, and management system in a timely manner.
Chairman Mao Zhongqun once said, “Manufacturing companies need to adhere to four words – change with the trend.” Using this style of play to develop new businesses that have not yet been verified by the market may have miraculous effects, but in the rapid innovation competition In the context of a large and explosive market, it is still a difficult problem to make more efforts among the heroes to prove the value of their own products and sales models, and to tell newer stories.
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