Industry news
Selling products for sales but not care if is earning money, how will this kind of thinking kill ceramics industry?
2024-09-13 6258

At the beginning of the article, let me tell you some stories.

Story 1: In the first half of the year, the total performance of the four listed ceramic enterprises was about 10 billion yuan, and the profits added up to less than 300 million yuan. The life of the head enterprises is hard, and the non-head enterprises are even more uncomfortable, working hard for most of the year, and looking at the financial statements do not make money.

Story 2: The production base of a ceramic enterprise only opens one kiln, which still cannot alleviate the problem of serious inventory backlog. Some netizens commented that even if half of the ceramic tile production lines are stopped across the country, there will be no shortage of ceramic tiles to sell in the market.

Story 3: More than 800 sets of second-hand houses are listed in 4 communities of Ludao Lake, and more than 700 sets of second-hand houses are listed in 5 communities of Nanzhuang. It is said that many pottery business clerks choose to sell their houses and return to their hometowns to develop, and the number of employees may shrink to one-third in the future.

Involution · self-inflicted

Every year it is said that this year is the hardest year ever in the history of the ceramics industry. But year after year, it was found that there was no hardest, only harder.

Many people blame all this on the economic environment, consumption downgrade, real estate downturn, and overcapacity, but selectively ignore the truth - profitability is the foundation for the survival and development of enterprises.

Only with profits can enterprises continue to operate, provide stable jobs for the society, and then create value for the society.

The visit found that there are still some pottery companies in the industry this year who are living very nourishingly, not only achieving double-digit growth in the first half of the year, but also the value of customer orders has not been affected by the so-called "consumption downgrade".

On the other hand, those ceramic enterprises whose business conditions are precarious, they have generally gone through three stages:

The first stage is to reduce costs, fight prices, burn faster kilns, and increase production capacity;

The second stage is to stop the loss in time, stop the kiln, and find an OEM outside;

The third stage is to clear the inventory, and if there is an order, it must be grabbed, and it must be sold if it does not make money.

It is not so much that this part of the pottery enterprises is forced to join the "involution", it is better to say that they have chosen an easy path. If profit is compared to the lifeblood of an enterprise, then it is often not peers who cut off this lifeline, but the enterprise itself.

Involution · harm others and harm oneself

A few days ago, in response to the country's "anti-involution" call, China Ceramics Network launched the special column "Breaking the Volume" of "China Pottery Threesome". In the first two live broadcasts, the guests all said that "breaking the volume" is not an easy thing, but it is a difficult but correct thing.

The opposite of right is wrong, let's first talk about what is wrong with the vicious competition of involution.

Nine pieces of ninety-one clothes, when you get your hands and find that the goods are not right, it is not the same thing as the seller's show at all; Nine pieces of ninety-one box of pistachios, opened to find that cut corners, desiccant and packaging box accounted for half of the weight...... The same is true for goods with low production costs, assuming that it is nine pieces of ninety-one tiles, it is estimated that they will be broken into slag on the road before they are pulled home.

The price of ceramic tiles on the market today can be said to be the lowest, only lower. Along with low-priced goods, there are overwhelming customer complaints, cracking, edge chipping, wear, seepage, R angle, fishy smell and other problems emerge in an endless stream, and consumers can't prevent it.

In general, there are three major harms of involution vicious competition:

First, it squeezes the normal profit margins of ceramic enterprises and dealers;

second, it will lead to the expulsion of good money by bad money in the market, which will harm ordinary consumers;

The third is to damage the entire industry ecology, which is also the most serious point.

When enterprises become "price butchers", product quality will lose guarantee, technological innovation will also enter stagnation, how to talk about sustainable development in the ceramic industry? What about high-quality development?


Value Innovation

Innovation. The famous economist Schumpeter believes that the economy itself does not develop, and economic development is driven by phenomena outside the economy, which is the innovation of entrepreneurs.

When the industry enters an extreme involution, it means that the innovation speed of the enterprise is far lower than the development speed of the industry. The homogenization of ceramic tile products is one of the root causes of the endless price war.

On how to innovate, Schumpeter also proposed five innovation methodologies:

一One is to adopt a new product, or to give an old product a new characteristic;

the second is to adopt a new production method;

the third is to open up a new market, which may or may not exist before;

fourth, the adoption of a new source of raw materials, or of a new source of supply of raw materials or semi-finished products, whether such source of supply already exists or is created for the first time;

Fifth, it is necessary to realize a new business combination and form or break a monopoly.

Let's talk about value. Any product or service has its value, that is, it solves a certain social problem, which is the meaning of the existence of the product or service.

Liu Shi believes that brands are divided into high, medium and low, low-end brands are talking about price, mid-end brands are talking about grade, and high-end brands are talking about culture, which is the value that different brands convey to users. When the industry is rolled up to a certain extent, the first thing to bear the brunt of is the price; In other words, the value that brands are delivering in the industry is price, not grade and culture.

Therefore, in order to break the volume, it is necessary to reshape the user value.

From the perspective of the production side, you may pay more attention to the functional value of tiles, but you don't know that users actually have the demand for emotional value. Functional value solves the rigid needs of users, and emotional value solves the emotional identity and sublimation of users, such as self-realization, being respected, empathy, resonance, and value recognition.

When the industry enters an extreme involution, enterprises can not only make a fuss about functional value, but also work emotional value. Because the function of the product is already similar, only the emotional value is the killer feature for the brand to get rid of involution.