Image source @ Visual China
Text | Intelligent Relativity, author | Kevin She
In January, the World Meteorological Organization issued a notice saying that "while average global temperatures have declined due to the La Niña event in 2020-2022, 2021 is one of the warmest seven years on record." "On the domestic side, the average annual temperature in Zhejiang and other places has reached a new high in 2021 and has become the highest since meteorological observation records have been recorded."
Different from the hot weather, the "cold" of the air conditioning market is deeply rooted in the hearts of the people, and the annual sales volume of 46.89 million units in the domestic market in 2021 fell by 8.7% year-on-year, refreshing the sales volume in recent years, and this is the "three consecutive declines" since 2019. "Air conditioning", which has been ridiculed by the Chinese as the "best invention" in modern times, seems to have encountered a ceiling.
Will the "triple descent" be just the beginning?
The overall air conditioning market downturn began in 2019, industry insiders analyzed the reason is that the previous air conditioning market continued to grow, reaching a high level in 2019, there will be a certain correction; followed by market saturation, when the real estate industry stagnates, it will inevitably affect the entire air conditioning market, even if there is still a rural market as a support, but it is also difficult to support. The "black swan" that began at the end of 2019 further disrupted the market rhythm, and the "three consecutive drops" were born.
But will the "triple descent" be the end, or is it just a new beginning? This is the most concerned issue in the industry at present. Judging from the agency's forecast, they seem to be full of confidence, and several agencies invariably expect that the air conditioning market will rebound in 2022. For example, AVC expects that "air conditioning consumption may pick up in 2022, with annual sales of 166.5 billion yuan and sales of 50.52 million units." ”
From the perspective of the industry, the "air conditioning brother" in China at that time, Zhigao is now reduced to selling land to survive, and Chunlan has long disappeared. At present, the main players in the air conditioning industry, such as Midea, Gree, Haier, TCL, Hisense, Oaks, Changhong, etc., are not very good in 2021.
Separately, the three giants of traditional air conditioning "Midea, Gree and Haier". As we all know, after the title of "King of Air Conditioning" was snatched away by the United States in 2020, whether Gree can achieve a reversal in 2021 has become a concern of the market, although both companies only released the last year's annual report at the end of April, but according to AVC data statistics, Gree failed to achieve overtaking.
The data shows that for the whole year of 2021 (January 1 to December 31), whether it is an online or offline market, Midea's market share exceeds Gree and ranks first. But even so, midea also has its own troubles, from the first half of last year's financial report data, although the overall revenue of the United States leading Gree nearly 10 billion yuan, but the revenue growth rate of Gree with 62.57% significantly ahead of the United States of 19.33%. And in terms of gross profit margin, Gree air conditioners are 29.8%, midea is only 20.85%, gree is nearly 9 percentage points ahead of midea.
According to Haier data, in 2021, Haier's annual retail sales of air conditioners increased by 16.4% year-on-year and share increased by 21.9%; online annual retail sales increased by 20.1% year-on-year, share increased by 21.1% Retail sales, and achieved "double positive" growth, becoming the "only" mainstream brand in the industry. In addition, in terms of gross profit margin, Haier air conditioners have also maintained a level of 28%, which is relatively stable compared with the previous two.
An important reason for the decline in gross profit margins of air conditioning brands is the wave of price increases in bulk raw materials, in 2021, 9 of the world's 22 major commodities have increased by more than 50%, the highest increase since 1995, and the price of raw materials such as copper is expected to remain high in 2022. Copper, aluminum and other materials are the main materials for air conditioning, so the rise in copper prices for the air conditioning industry, not only has a great impact, but also a wide range of influence, there is news that Gree, Midea, Panasonic and other air conditioning manufacturers have released price increase news.
But to say that after the wave of price increases, who is the most difficult, it must be the dealers.
The general environment is harsh, and the unspoken rules are intensified
After the end of the year, Xiao Li finally made up his mind to resign from the job of a regional general agent company of an air conditioning brand, "The company lost millions of dollars last year, the year-end penny bonus was not issued, the cut, the initiative to leave, last year the company began to go a lot of people, but after the year the company also said to adjust the salary, that is, a disguised salary cut, no way I can only leave, in comparison, I have already gone relatively late." ”
Xiao Li told "Intelligent Relativity", because of the relationship between the market environment, their company has actually begun to lose money from 2020, but the amount is not much to survive, last year, especially after the second half of the year, it obviously feels a bit unsellable, and the air conditioners worth millions in the warehouse are only seen.
"Now offline air conditioning agents are not happy, especially this round of price increases have a wide impact, the circle of friends often see the complaints of other agents, in January this year has risen several rounds of prices." Don't look at the previous reports on how well this brand and that brand sell online, but the overall air conditioning sales are not long, and the food is not our share of the offline market. Some of the best-selling models sell online for a hundred bucks cheaper than physical stores. ”
"Moreover, the sales secret when the live broadcast with goods is now not a secret, that is, dealers around the world hoard goods, like the brand of our company's agent, last year in the live broadcast of this piece of big special, how much to sell today, how much to sell tomorrow, most of them have entered the warehouse of our agents, the brand will give indicators, saying which live broadcast agent must buy how many units and the like."
Last year, live streaming with goods in the major electrical appliance brands can be described as popular, live broadcast spikes, Net red with goods, presidents sell goods and other ways are endless. Previously, there were reports that many brands had large sales of live broadcasts, and eventually became the pressure of agents in various regions.
"In addition to the epidemic and the market environment, low-price channeling goods are even more unable to survive, our company as the regional general agent, there are many dealers below, but after the price increase the market and digestion can not move, the following dealers also want to sell cheap ah, after all, at least sell to move, other regional agents to reduce the pressure of the warehouse, a large number of low-price channeling goods appeared, this is also the industry's old unspoken rules, no dealers will be dumped at low prices in their own areas, our dealers below take channeling goods, the general agent of this side of the warehouse is more clear, Even if there is an agreement on the brand side to prohibit channeling, it cannot be controlled. To put it bluntly, dealers have become working for manufacturers, and they have not earned a penny. ”
It can be seen that during the annual promotion or activity, there will basically be a brand to stand up and say that it will strictly investigate the "channeling goods", at the end of last year, a beautiful air conditioning "black list" was widely circulated in the industry, it is clear that the "channeling goods" for the market, and even the drawbacks brought by the industry, the brand side has long known, but in addition to finding a blow, the manufacturer actually has no more ways, but this many years of stubborn disease in the downward environment, it is particularly prominent.
"Our company also acted as an agent of the same brand of water heaters before, I remember that in 2017, 2018 or so, to achieve the first sales in the country, and then others felt that this thing made money, ah, all squeezed in, began to appear a large number of channeling goods, last year basically can not do it, this year heard that the company is ready to stop the water heater business, hoarding tens of millions of goods every year, now the market is not before, really can not sell. This year, I heard that the company is ready to stop the water heater business. ”
In fact, not only the C-end air conditioning dealers can't stand it, but the B-end dealers are also complaining bitterly.
The brand side personally went down, and the B-end dealer had no food to eat
Like Xiao Li, Wang Hao also chose to leave the company he had been in for nearly 5 years at the beginning of the year. "In the second half of last year alone, the company lost nearly 6 million yuan, the company was not single, and we did not have a project in the end of last quarter of last year." Without a project commission, the basic salary cannot support my big son, and even the company may not be able to do it this year. ”
Wang Hao's company is the general representative of an air conditioning brand in a certain place and city in the central province, their company mainly does commercial machines, the business coverage is mainly around the region and parts of the neighboring provinces, customers are mainly from some shopping mall projects and government projects, but since the outbreak of the epidemic, some large shopping mall projects have basically stagnated, but the last straw that crushed them is the brand side's personal end.
"After the epidemic, the company's business began to plummet, like the headquarters here basically there are no large projects, originally if it is just like this is not impossible to survive, because our company is relatively large on this side, the experience is relatively rich, so many government projects can be picked up before." But since last year, government projects have also begun to decline sharply, the main reason is that the brand side came to negotiate directly with the government, such as promising me to build an assembly factory with many jobs here, and some of the corresponding projects will be directly given to the brand, no longer through the hands of regional agents. ”
"Of course, the company has also consulted with the brand side, but it is useless, people have a very tough attitude, you can terminate the contract after selling your hand, they are not worried about finding an agent." In fact, I also want to get, all to survive, when the market environment is not good, who will care about your dealers. I still remember once the boss turned around in the warehouse for an afternoon, looking at the goods in the warehouse and the warehouse, and his head was about to shake off. ”
The brand side personally went down, and the past two years are becoming normalized, not only the B-end, but also the C-end market. Like the "front warehouse" model led by Midea last year, in a simple sentence, it is "warehouse front, which transfers the company's commodity distribution center from the suburbs to the consumer." According to Midea, the purpose is to "manage centralized power, straighten out channels, and prevent the channeling of goods." "But isn't this also a way for brands to bypass traditional agents and go down in person?"
In addition, brands such as Oaks and TCL are also accelerating the "factory direct purchase" model, starting in 2019, this model has become their main direction, and Oaks is one of the deepest players. Online batch or factory direct sales are abandoning traditional offline agents. There is no middleman, and you can buy products at a lower price, which is of course a good thing for consumers, but for those dealers who have been doing it for many years, it is also a bit of a rabbit dead dog cooking suspicion.
Judging from the "self-help action" made by major brands in the current environment, whether it is Gree's "10 years of free return service", or the "scenario" launched by Haier, or the main axis of the "four major strategies" of the United States, their fundamental starting point is still the brand itself, and the following agents are afraid that the days of drinking soup with the brand side are afraid that they will never return.
summary
Obviously, under the continuous action of black swans, the market is difficult to recover in the short term, and the commercial relationship in the market seems to have begun to change, such as the initial interdependence between manufacturers and dealers, to today's "intrigue", whether it is dealers channeling goods or manufacturers personally going down, although they are all for survival.
Especially once the manufacturer finds that they can also get things done, the traditional sales channel model may usher in a huge change, live broadcast, pre-warehouse, are rapidly opening up the original harmonious relationship between the two sides, that for home appliance dealers, may need to start to find their own way out, the result of waiting may be that there is no food to eat.