May in Shanghai, there is a bit cool. The Yishan Road building materials market in the lively Xujiahui business district was slightly deserted. In Tang Weihua’s words, the industry is now in an “avalanche†stage. Tang Weihua, general manager of Gardonia Building Materials Co., Ltd., currently owns European tile brands such as Gardner, and European sanitary and faucet brands. With insights into the industry's situation and control of the marketing channels, Tang Weihua’s company’s sales in the first half of this year were fairly satisfactory. Tang Weihua said that he had experienced the reshuffle of the air-conditioning industry in 2002 and the mobile phone industry in 2006, and “maybe seen more clearly†for the current development of the ceramic industry.
As one of the few European brands operating in China successfully, in the eyes of Tang Weihua, what is the status of the industry and how is it going? We together look!
European Ceramics: Consolidation and Promotion in Crisis Reporter: Your company has represented several European ceramic tiles and bathroom brands. Can you introduce us to the European ceramics industry that you know?
Tang Weihua: There are two major lines in this ceramic tile industry. One is Italian antique bricks, and some product structures supported by antique bricks. In the past, it was precipitated for about 160 years. Basically, the entire industrial base is now in Morvanna. In this entire region, it is a sales structure that is dominated by traditional family businesses. Another main line is Spanish products. In terms of style, Spanish products have begun to focus on product structure adjustments, starting from polished tiles that were defeated by China in the past, such as inkjet products, 3D ink jet structures, high-end microcrystalline products, and high-end products. The glazed structure products, Spanish ceramics are mainly in the industrial park around Castile. This is also the structure of two major market demands.
Reporter: As for your observations, what have been the changes in the European ceramics market in recent years?
Tang Weihua: From the point of view of the evolution of the entire market structure, before 2008, their overall penetration and coverage of the market was quite clear. In the first economic crisis, after the economic crisis of 2008, we saw that ceramic companies in Italy and Spain are making a painful transition. The situation in Italy and Spain was a bit like China today. Before 2008, Italy and Spain each had hundreds or even thousands of family-owned ceramic companies. They positioned themselves differently and each did its part.
However, after 2008 there have been several major structural changes. The biggest change is the rapid concentration of brands. The economic crisis will encounter several structural problems. One is that, as the economic situation is not good, products shrink and innovation is reduced. Everyone will have large-scale mergers and acquisitions when innovation power is reduced. Foreign business models may be acquired through mergers and acquisitions. In other words, behind this structural change, a batch of monopoly ceramic industrial groups have emerged, like Spain’s. Pamesa Group, and even the Italian Honey Group, Amy Group. Among these major ceramic companies, including the filosophia group, they are rapidly forming their own scale advantages, tilting prices down moderately, and expanding their production capacity through local acquisitions of small marginal factories.
We have also seen the Poroza Group, which has been talking about more in the past. It used to be a dominating company in Spain. After the economic crisis, the Poroza Group was almost categorized by the two companies that are characterized by their size or innovation in product structure. Defeated, one is Pamirsa and the other is the baldocer group. We got the latest data. By the end of last year, the daily shipments of the Poduosa Group had reached 120,000 square meters, which is already the absolute leader in Europe. It engulfed the market through a competitive strategy of scale and low price. In the second half of last year, especially after June, China’s trade war with Europe, the Poduosa Group was actually the biggest winner. In the past year, shipments expanded from 50,000 square meters to 120,000 square meters, up by nearly 1.5. Times, the price is also quickly tilted to the market. This is a change in the structure of the European market. The first is that large ceramics monopolies enlarge their market share through large-scale production. This is very obvious; the second is that the demand for personalized high-end modules is also forming in Italy, for example, adding Denia began operating Versace tiles in 2005. This is a high-end full glazed product under the famous brand. From 2007 to 2008, especially in the economic crisis, it launched three series of thin-plate products called crystalker, which is also a carrier. In 2008, he launched cross-border cooperation products with Swarovski, a multi-brand category structure. This is equivalent to differentiation. Brands advocate value innovation rather than price war.
In addition, the downstream competition is more and more price wars, and more large-scale enterprises devour the market through price and scale. At the high end, it is a combination of cross-border and cross-border brands, including with Versace and Swarovski. Odd cooperation, including the technology of environmental protection sheet products, including some of the gold leather structure applications. Some of our domestic companies are doing similar imitations.
The domestic industry has changed from “Spring and Autumn†to “Warring States†and continues to change. Reporter: Tell me about your views on the current state of the domestic ceramic industry.
Tang Weihua: The Chinese ceramics market has experienced two major stages through 30 years of reform and opening up, setting off a wave of two-wave ceramics. The first stage was the wave of ceramics pushed by China's welfare housing divisions from 1990 to 1999. In this area, the biggest change was polished tiles, and a number of Taiwanese companies were also established because Taiwanese companies carry funds and carry costs. In particular, Taiwanese companies in East China, such as Champions, Smike, Asia and bathroom and bathroom. In the first wave, their products replaced the traditional, structural ceramic products of the mainland and won the entire market. From 1996 to about 2000, Foshan's enterprises have undergone a major transformation in the transformation of state-owned enterprises and the rise of private enterprises.
The second stage is the second real estate wave from 2000 to 2009. Its outbreak is the real increase in mortgage loans in China in 2003, which means that the application of open real estate and mortgage tools in China has brought about a rapid boom in China's real estate market. The welfare housing distribution in the first wave actually solved the problem of the property of China's real estate. In the second wave, through the mortgage tool, it actually solved the structural problem of household demand. Then, on the other hand, with the construction of high-speed traffic in China, including from 2005 to 2008, China has made so-called traffic backbone networks, highway backbone networks, and ring road networks on a large scale. This makes the villa become the main body of growth and demand of the market. In the second wave, the antique brick has gradually become the mainstream of the market.
As for the direction of the industry, I believe that the first half of 2014 is a key point. At this stage, with the intensification of internal and external competitions, the introduction of punitive tariffs in the EU, and the tightening of real estate regulation and control since last year, domestic ceramic companies have turned from an era of rapid demand growth to an era of sudden stagnation. From the time of last year to the first half of this year, whoever has had a hard time, I call it the “avalanche†stage. Large households will not die at this stage, and the middle households will need to add coats and small households will gradually leave. From the second half of this year to the first half of next year, this winter will be even colder. If the industry chain is not subdivided, self-positioning is made, and differentiation is done, companies will be even more painful, because at this stage, there is not much excess food on hand. Now. At this stage, there will be mergers and acquisitions among the households in the middle of the country. There will be warmth between the households and large households to eat up the households. From May of next year to 2014, this stage will brewing new opportunities and opportunities for the entire market, but it is still in the cold winter. Among the enterprises, they combed clear, washed cards and continued on the road. After two to three years of experience in the entire industry, the future will be healthier. The positioning of the company on the brand, the positioning of the product structure, and the positioning of its own system capabilities will be greatly improved.
I believe the spring of 2014 will be full of life, but many people cannot wait. I estimate that 20% to 25% of companies will leave the company, and that in the future there will be 15 to 17 companies that actually form a scale in China. They will constitute the billion-dollar clubs of the future Chinese ceramic tile industry, because the products in this industry are not standard parts, so unlike the fast-moving consumer electronics or home appliance industries that form 3 to 5 monopolistic competition structures, they are moderately more. The threshold is 10 billion, if not 10 billion, the survival of enterprises will be very difficult. Of course, there will be some differences in the area of ​​personalized products. For example, companies with personalized products have a scale of 3 billion to 4 billion, which is also possible. The top ten market share of our industry is now no more than 15%. The most important sign of industry consolidation is that the top 8 share must exceed 64%, so integration is inevitable, but will continue for some time until 2019, before 2020 End. Due to the disappearance of the demographic dividend and the emergence of an aging population, the process of urbanization has accelerated by 70%, and economic development has entered the era of service economy. Now in the industry, why is the call louder and everyone is squeezing in the collision? They all think that it is an opportunity. Who is desperate to run forward? Because the industry has not completed the integration, everyone has the opportunity to be a hero. When one day, the industry begins to be dull, personal value will be replaced by corporate value. You can look at the industry that has already been integrated. Only if the system has no hero, the system will defeat the hero sooner or later. It can be said that since last year, China's ceramic tile industry has entered the Warring States period from the Spring and Autumn Period. It turned out to be an innumerable vassal states and later in the Warring States Period. Of course, unification is not feasible. This is the process of change.
Brand to do subtraction to do addition to the scale Reporter: We see that the market demand is indeed not optimistic, then you can give the company some of your suggestions?
Tang Weihua: There are two ideas. One is the scale, then it is very simple, producing areas plus logistics platform, like Xinzhongyuan, Hongyu, New Pearl. Relying on this resource and competitive structure, companies can truly achieve 10 billion. The other is personalization. To do high-end is to personalize, that is, to seize the channels and stores. Without these two carriers, other things are virtual. Of course, there are also issues related to the promotion of personalized services and services, and the promotion of word-of-mouth publicity. This is one of the biggest issues for high-end brands.
Reporter: What is the process of positioning, subdividing and combing you mentioned?
Tang Weihua: In fact, the development of the company is constantly doing SWOT analysis. After the SWOT analysis, it is to position itself, and then mobilize the entire system to increase your short board and increase execution. Once I was in Foshan, there was a microcrystalline stone company telling me to sign a customer. The customer is going to open a 1,000 square meter store. Where do I say? He told me in a local market. I think, can you make it? Will such large store customers come to this market?
Shanghai, for its part, is a complex market. Located in the highest position like Zhenbei Road and Yishan Road, to Pudong Tongfu and Evergrande, then to Songjiang Market and Fengxian Market. These markets represent China's first-tier second-tier and third-tier cities markets on many levels because Shanghai's suburbs and county markets are somewhat like China's second-tier or third-tier markets. Yishan Road and Zhenbei Road are in line with the first-tier market positioning. For me, I will only do two stores: Yishan Road Shop and Zhenbei Shop. Other places are not my business positioning. Another possibility is Pudong Jinqiao, because Shanghai’s villa district is in Sheshan and one in Jinqiao, Pudong. I want to be closer to my customers. Therefore, to do branding is to do subtraction, and the scale is to do addition. Then we have to think about the balance between addition and subtraction. Enterprises can not be too eager to always want to do addition, always want to take 10 billion, the company is to brake, rationale and positioning time. After everyone's triumph over the past few years, everyone suddenly encountered market fluctuations and felt a little numb.
Reporter: We know that bees tile is doing well in Shanghai. Do you think the positioning of this brand is accurate?
Tang Weihua: The bees tile solves the fast-paced life of the consumer groups in China's first and second tier cities. After returning home, he went to the garden and asked for “Gohomeâ€, and the price of bee tiles was close to the market. Gardinia's position is the European style of court and luxury. Many of its ideas are inspired by the Vatican and Versailles, so we have differences. In the market strategy, we are now waiting, because the consumption power of the market has not yet reached that stage. Sometimes waiting is inevitable. At the store, we have spread out in China's major capital cities.
Channel construction: Direct supply model VS circulation company reporter: The channel construction problem has always been valued by the enterprise. The source of this article is Huaxia Ceramics Network What kind of thinking do you have about channel construction? What aspects of the foreign ceramics industry are worth learning from domestic counterparts?
Tang Weihua: The channel structure of foreign markets has already experienced such a stage as we are now. Nowadays, the foreign building materials market is dominated by B&Q, and foreign companies are now mostly multi-brand operation models. This is unlike the single-brand store operation model in China. Foreign markets have also experienced single-brand store operations. However, because the EU is made up of a dozen small countries, the environment in each country is different. Therefore, foreign companies first multi-brand, and second, category distribution, for example, I only proxy PERONRA super spar MUSE-UM series.
Tiles are not standard parts, so it is very difficult to use the standard model of the Internet to transform and subvert the channels. Also, after 80 and 90 are lazy and brand consumption, behind the laziness consumption is brand consumption rather than category consumption. At the same time, in China, multi-channels are also an inevitable choice, because the Chinese market is too large and the purchasing power is uneven, which makes China have a multi-channel structure model, which cannot be changed. However, behind these channels is the repositioning of various channels.
One is the Red Star McGraw-Hill and the home of surprise. The Red Star Magdalen proposed to increase from the current 16 categories to 25 categories and reduce the risk through the increase of the category. There is also an appropriate reduction in the area of ​​single-item products, to accommodate more brands and create brand positions. In other words, companies do not have to go to the Red Star Meikailong, actually home, Xiyingmen (East China building materials chain store), unlike the new SinoSource. Because if you do not enter these store brands are not differentiated brands, it is not a member of the brand Lin. Enterprises will not be able to deliver brand awareness to consumers in the post-80s and the 90s. This is the strategic choice. Actually, Lucerne floor agents have been made. This is a signal that actually the house and the Red Star Macalline may erode part of the industrial chain. In fact, everyone is integrating the future direction and interacting in the industry chain.
The model for the future of the channel is a new type of enterprise with a mode of operation of the company, clear ownership, clear thinking, and strategic goals. They will become the mainstream in the commercial circulation channels. Such models as Huanyi and Huiquan will occupy the market and even exceed individual production companies. In fact, they have already surpassed a large part of enterprises.
With the competition in the market, there may be such a situation in the channels: It is possible that the product circulation enterprises are bigger and stronger, and even large in turn involved in brand operations. Channels are concerned that the single brand share in the product is too large. At the same time, companies are also worried that the channel providers will be able to directly influence their own sales. So there is still a problem. The chain of channels is too long. As a result, the price is high. In the future, who can bypass these and directly serve consumers will become the largest carrier structure in this industry. In the future, there may be 10 billion or 20 billion circulation companies, because such enterprises have the ability to supply terminals directly. These are the inevitable guarantees for future segmentation of the channel structure.
It can be seen that while the stores are changing, home improvement companies are accelerating through exhibitions and expansion. Local monopoly oligarchy home improvement companies are forming. For example, Guangzhou Star Art, Wuhan Jiahe, Shanghai's Shen Yuan and Xing Jie, Beijing's Dongyi and Yefeng, and Changchun's Lily Decoration, they have also done a hundred million in the local area. These channels squeeze each other's industrial chain, and they are all looking for positioning. This positioning process is a process in which profits are continuously diluted, and the process of choosing scale or individualization is also the process. What is the difficulty of Foshan Tao Enterprise? The first is the scale. Without scale, it cannot survive. The second is personalized choices. Without personalization, it is impossible to win brand reputation in the market. This is the market choice. Enterprises must face these problems in this crucial point.
From another perspective, as the concentration of brands increases, so-called designer rebates and related unspoken rules will tighten in the industry. In an era of black and white, we always go through a process. This is the inevitable period of transition. Enterprises must move forward. Behind this choice is the arrival of the third wave of Chinese ceramics industry. The reason is that a large number just need to be suppressed, and secondly, China's first wave of replacement consumption must jump out. The house of the 1990s has been 40 years since our generation. Now. The old five-storey and six-story buildings in the process of urbanization in China, and houses without elevators have not kept up with the times. There is a process of transformation and it is also the reason for many enterprises to slogan “Going Down to the Countryside†to the vast counties. Market to go.
Reporter: How do you look at the hierarchical pattern of such agents, agents, and distributors in the Chinese market?
Tang Weihua: In the past mobile phone industry, there were also such large- and small-generation models. I think there are two problems: one is channel management, and the other is channel profit maximization. The problem with our current model is that channels consume too much profit, and the result is a high terminal price. Actually, there are contradictions between enterprises and terminals. Enterprises think that their own shipping prices are very low and why terminal distributors sell so much. The problem is that the current chain of channels is too long. Can we cut down the channel chain and directly face the consumers directly? It is the direct supply terminal that has been discussed before. So now everyone is exploring, Dongpeng is exploring branches and sales of Dongpeng’s 16 branches have accounted for 40% last year. Marco Polo has set up its own operation and management center in 5-7 provinces across the country, including Shanxi, Jiangxi, Hubei, and Henan. It has built a logistics and warehousing center and a logistics platform. The stores in each county are directly supported by the company. Marco Polo's innovation in this model is to open the industrial chain, open up the source of profits, solve the problem of the value chain and solve the problem of consumption power. There are many factors influencing corporate channel management. There are many channel levels, and each layer must generate profits. The core of solving problems is the flattening of channel management. Talk about channel profits, the same products, companies use the current channel model to do, the terminal price of 800 blocks, using the direct supply channel model to sell 200, which has an advantage?
Reporter: The direct supply model is a challenge to enterprise management capabilities. Do you agree with this view?
Tang Weihua: So now that Foshan companies are not ready and combing well, they are still in the production category, not marketing or overall operations. Dongpeng and Marco Polo actually piloted the direct supply channel model. I think this model may have 2 or 3 companies succeed, and the successful 2 or 3 companies must be 10 billion enterprises. The internal resources of this model will also be integrated, and one message will be known to everyone in the QQ group. On the other hand, if companies are operating in this mode, Huanai can only be a self-selected brand and start over. To take a terrible example, the province established a transit warehouse with 12 logistics vehicles to complete the seamless coverage of the store, that is, 12 cars per prefecture-level city, take a week in each city, replenishment and distribution Get it all in one go.
Terminal branding needs to choose the right way Reporter: Gardner has a cross-border cooperation with some luxury brands, and Chinese ceramic companies have also made a lot of efforts to shape the brand. What do you think can be shared with us at home and abroad?
Tang Weihua: A brand is divided into several stages, firstly, popularity, then reputation, and finally, brand dependence. We now have a lot of focus on popularity, including cross-border cooperation like “If You Are the One†and a concept cooperation like I-phone4S. According to my understanding, this is called micro-innovation. This kind of innovation is still the structural innovation of the factory model, not the consumer-oriented innovation. Today's ceramic companies are often known for their reputation, not for brands, and brands need to be precipitated. Why do some companies want to use beasts, dry Lulu, just want to know. The second stage is the reputation. Dongpeng invited Qi Qin and May Day to do a concert this year. Dongpeng wanted to use these stars to arouse the memories of consumers and get closer to consumers. However, such activities cannot be integrated with the entire enterprise system.
Reporter: What do you think are the major differences between the foreign ceramic enterprises and the domestic ceramic enterprises in their strategies for distributors?
Tang Weihua: The biggest difference is that foreign ceramic enterprises are doing branding, team training and cultural cultivation, and domestic companies are busy pressing distributors to the merchandise. The starting point is not the same, one is studying consumers and the other is studying how to keep the kiln from stopping. The result is of course not the same. One terminal is a cumulative effect and establishes word of mouth; one, although it may be large, the terminal will abandon the brand when the benefits of the terminal are not met.
Corporate Innovation Should Be Systematized from a Single Polarization Reporter: How do you think companies should improve their competitiveness? What challenges do companies face in the pursuit of innovation?
Tang Weihua: The current problem of enterprises is how to change from unipolar product innovation to multi-level systematic innovation. In the past, why Foshan companies stayed in the imitation and price war, because the cost of imitation was too low and intellectual property protection was not in place. However, there has been a change this year. There is a settlement between Dongpeng and Jiajun. What I have seen from the back of this matter is that the great era of product innovation in the past has ended, and how companies are changing from a unipolar product model to a multi-core product model. This is something we need to think about.
Now the market is making adjustments. There are three aspects of the adjustment. In the first, we judge that in the second half of 2014 to around 2022, one of the biggest inflections is in 2019. China is officially entering an aging society and an important part of aging society. The sign is that real estate and related industries are beginning to decline. This phase will form low-end monopolies and high-end personalized innovation companies. Of course, this innovation is not just product innovation. In the second aspect, China’s real estate market will shift from the past 100% of the residential market to 30% of the specific market and 70% of the residential market. Here, 30% of the specific markets may be half of the villas and half of the commercial space, and the government will intervene. A lot of affordable housing. This stage, the integration of the ceramic tile industry is basically over, either you are low-end or high-end. The most fundamental issue is how we can create our own comparative competitive advantage and strengthen our core competitiveness in the next 10 years.
The current market structure is determined by a specific economic stage. We cannot regard our comparative competitive advantage as our own core competitiveness. This is what we need to recognize in this impetuous era. At the stage of industrial integration, there are several deep-seated problems. One is, as the vice president of the journal Roger said, can we grasp consumer appeal and spending power?
The demands of Chinese consumers are changing. They have shifted from the practical consumption in the 1960s to the consumption of the upstarts in the 1970s, to the happiness of the future and the consumption of fashion brands, and the gradual consumption of cars, houses and yachts in the past. To the western family-style experience consumption. Of course, this demand is not a mass-scale product, but a personalized product. This may have details that we didn't pay attention to before. For example, some companies have started to pay attention to the integration of accessories, waistline, and all-family homes that didn't pay much attention to in the past, such as the recent alliance between Jin Yitao and Chuanda. On the one hand, there is a growing number of full-class products. On the other hand, the integration of accessories at the back end of the industrial chain is accelerating. Foshan now has a one-year-to-billion-dollar enterprise, which was unthinkable before. But big innovations are gone, that is, the use of chemicals to define the composition of bricks is no longer innovated. Now it is more about artistic innovation, structural innovation, and detailed module innovation.
Reporter: Innovation is necessary to cope with industry consolidation. What breakthrough will ceramics companies have in terms of innovation in the future?
Tang Weihua: In order to better cope with the next new industry consolidation, I think there may be innovative changes in the following five aspects. One is that the subdivision of brand innovation will appear. With the acceleration of industry integration, the brand's voice in the market will increase, and cultural appeal and product differentiation will become mainstream. The second is the innovation of the management system and the modern system. At present, the competitiveness of our entire industry is still in a relatively elementary stage during the gradual integration of the entire industry. In the future, there are still many opportunities for enterprise system and internal management innovation. The third aspect is the innovation of cost strategies. China has already faced a process of gradual increase in costs. There are also opportunities for cost innovation. The fifth is channel innovation. The sixth point is the innovation of marketing techniques. In the past, we still had some room for innovation in brand culture and marketing concepts. In general, innovation is premature death, and no innovation is waiting for death. For corporate brand promotion, innovation is a very challenging matter for our future home industry. Moreover, from the perspective of the industry's gradual integration, innovation also plays a key role in guiding our future industry.
As one of the few European brands operating in China successfully, in the eyes of Tang Weihua, what is the status of the industry and how is it going? We together look!
European Ceramics: Consolidation and Promotion in Crisis Reporter: Your company has represented several European ceramic tiles and bathroom brands. Can you introduce us to the European ceramics industry that you know?
Tang Weihua: There are two major lines in this ceramic tile industry. One is Italian antique bricks, and some product structures supported by antique bricks. In the past, it was precipitated for about 160 years. Basically, the entire industrial base is now in Morvanna. In this entire region, it is a sales structure that is dominated by traditional family businesses. Another main line is Spanish products. In terms of style, Spanish products have begun to focus on product structure adjustments, starting from polished tiles that were defeated by China in the past, such as inkjet products, 3D ink jet structures, high-end microcrystalline products, and high-end products. The glazed structure products, Spanish ceramics are mainly in the industrial park around Castile. This is also the structure of two major market demands.
Reporter: As for your observations, what have been the changes in the European ceramics market in recent years?
Tang Weihua: From the point of view of the evolution of the entire market structure, before 2008, their overall penetration and coverage of the market was quite clear. In the first economic crisis, after the economic crisis of 2008, we saw that ceramic companies in Italy and Spain are making a painful transition. The situation in Italy and Spain was a bit like China today. Before 2008, Italy and Spain each had hundreds or even thousands of family-owned ceramic companies. They positioned themselves differently and each did its part.
However, after 2008 there have been several major structural changes. The biggest change is the rapid concentration of brands. The economic crisis will encounter several structural problems. One is that, as the economic situation is not good, products shrink and innovation is reduced. Everyone will have large-scale mergers and acquisitions when innovation power is reduced. Foreign business models may be acquired through mergers and acquisitions. In other words, behind this structural change, a batch of monopoly ceramic industrial groups have emerged, like Spain’s. Pamesa Group, and even the Italian Honey Group, Amy Group. Among these major ceramic companies, including the filosophia group, they are rapidly forming their own scale advantages, tilting prices down moderately, and expanding their production capacity through local acquisitions of small marginal factories.
We have also seen the Poroza Group, which has been talking about more in the past. It used to be a dominating company in Spain. After the economic crisis, the Poroza Group was almost categorized by the two companies that are characterized by their size or innovation in product structure. Defeated, one is Pamirsa and the other is the baldocer group. We got the latest data. By the end of last year, the daily shipments of the Poduosa Group had reached 120,000 square meters, which is already the absolute leader in Europe. It engulfed the market through a competitive strategy of scale and low price. In the second half of last year, especially after June, China’s trade war with Europe, the Poduosa Group was actually the biggest winner. In the past year, shipments expanded from 50,000 square meters to 120,000 square meters, up by nearly 1.5. Times, the price is also quickly tilted to the market. This is a change in the structure of the European market. The first is that large ceramics monopolies enlarge their market share through large-scale production. This is very obvious; the second is that the demand for personalized high-end modules is also forming in Italy, for example, adding Denia began operating Versace tiles in 2005. This is a high-end full glazed product under the famous brand. From 2007 to 2008, especially in the economic crisis, it launched three series of thin-plate products called crystalker, which is also a carrier. In 2008, he launched cross-border cooperation products with Swarovski, a multi-brand category structure. This is equivalent to differentiation. Brands advocate value innovation rather than price war.
In addition, the downstream competition is more and more price wars, and more large-scale enterprises devour the market through price and scale. At the high end, it is a combination of cross-border and cross-border brands, including with Versace and Swarovski. Odd cooperation, including the technology of environmental protection sheet products, including some of the gold leather structure applications. Some of our domestic companies are doing similar imitations.
The domestic industry has changed from “Spring and Autumn†to “Warring States†and continues to change. Reporter: Tell me about your views on the current state of the domestic ceramic industry.
Tang Weihua: The Chinese ceramics market has experienced two major stages through 30 years of reform and opening up, setting off a wave of two-wave ceramics. The first stage was the wave of ceramics pushed by China's welfare housing divisions from 1990 to 1999. In this area, the biggest change was polished tiles, and a number of Taiwanese companies were also established because Taiwanese companies carry funds and carry costs. In particular, Taiwanese companies in East China, such as Champions, Smike, Asia and bathroom and bathroom. In the first wave, their products replaced the traditional, structural ceramic products of the mainland and won the entire market. From 1996 to about 2000, Foshan's enterprises have undergone a major transformation in the transformation of state-owned enterprises and the rise of private enterprises.
The second stage is the second real estate wave from 2000 to 2009. Its outbreak is the real increase in mortgage loans in China in 2003, which means that the application of open real estate and mortgage tools in China has brought about a rapid boom in China's real estate market. The welfare housing distribution in the first wave actually solved the problem of the property of China's real estate. In the second wave, through the mortgage tool, it actually solved the structural problem of household demand. Then, on the other hand, with the construction of high-speed traffic in China, including from 2005 to 2008, China has made so-called traffic backbone networks, highway backbone networks, and ring road networks on a large scale. This makes the villa become the main body of growth and demand of the market. In the second wave, the antique brick has gradually become the mainstream of the market.
As for the direction of the industry, I believe that the first half of 2014 is a key point. At this stage, with the intensification of internal and external competitions, the introduction of punitive tariffs in the EU, and the tightening of real estate regulation and control since last year, domestic ceramic companies have turned from an era of rapid demand growth to an era of sudden stagnation. From the time of last year to the first half of this year, whoever has had a hard time, I call it the “avalanche†stage. Large households will not die at this stage, and the middle households will need to add coats and small households will gradually leave. From the second half of this year to the first half of next year, this winter will be even colder. If the industry chain is not subdivided, self-positioning is made, and differentiation is done, companies will be even more painful, because at this stage, there is not much excess food on hand. Now. At this stage, there will be mergers and acquisitions among the households in the middle of the country. There will be warmth between the households and large households to eat up the households. From May of next year to 2014, this stage will brewing new opportunities and opportunities for the entire market, but it is still in the cold winter. Among the enterprises, they combed clear, washed cards and continued on the road. After two to three years of experience in the entire industry, the future will be healthier. The positioning of the company on the brand, the positioning of the product structure, and the positioning of its own system capabilities will be greatly improved.
I believe the spring of 2014 will be full of life, but many people cannot wait. I estimate that 20% to 25% of companies will leave the company, and that in the future there will be 15 to 17 companies that actually form a scale in China. They will constitute the billion-dollar clubs of the future Chinese ceramic tile industry, because the products in this industry are not standard parts, so unlike the fast-moving consumer electronics or home appliance industries that form 3 to 5 monopolistic competition structures, they are moderately more. The threshold is 10 billion, if not 10 billion, the survival of enterprises will be very difficult. Of course, there will be some differences in the area of ​​personalized products. For example, companies with personalized products have a scale of 3 billion to 4 billion, which is also possible. The top ten market share of our industry is now no more than 15%. The most important sign of industry consolidation is that the top 8 share must exceed 64%, so integration is inevitable, but will continue for some time until 2019, before 2020 End. Due to the disappearance of the demographic dividend and the emergence of an aging population, the process of urbanization has accelerated by 70%, and economic development has entered the era of service economy. Now in the industry, why is the call louder and everyone is squeezing in the collision? They all think that it is an opportunity. Who is desperate to run forward? Because the industry has not completed the integration, everyone has the opportunity to be a hero. When one day, the industry begins to be dull, personal value will be replaced by corporate value. You can look at the industry that has already been integrated. Only if the system has no hero, the system will defeat the hero sooner or later. It can be said that since last year, China's ceramic tile industry has entered the Warring States period from the Spring and Autumn Period. It turned out to be an innumerable vassal states and later in the Warring States Period. Of course, unification is not feasible. This is the process of change.
Brand to do subtraction to do addition to the scale Reporter: We see that the market demand is indeed not optimistic, then you can give the company some of your suggestions?
Tang Weihua: There are two ideas. One is the scale, then it is very simple, producing areas plus logistics platform, like Xinzhongyuan, Hongyu, New Pearl. Relying on this resource and competitive structure, companies can truly achieve 10 billion. The other is personalization. To do high-end is to personalize, that is, to seize the channels and stores. Without these two carriers, other things are virtual. Of course, there are also issues related to the promotion of personalized services and services, and the promotion of word-of-mouth publicity. This is one of the biggest issues for high-end brands.
Reporter: What is the process of positioning, subdividing and combing you mentioned?
Tang Weihua: In fact, the development of the company is constantly doing SWOT analysis. After the SWOT analysis, it is to position itself, and then mobilize the entire system to increase your short board and increase execution. Once I was in Foshan, there was a microcrystalline stone company telling me to sign a customer. The customer is going to open a 1,000 square meter store. Where do I say? He told me in a local market. I think, can you make it? Will such large store customers come to this market?
Shanghai, for its part, is a complex market. Located in the highest position like Zhenbei Road and Yishan Road, to Pudong Tongfu and Evergrande, then to Songjiang Market and Fengxian Market. These markets represent China's first-tier second-tier and third-tier cities markets on many levels because Shanghai's suburbs and county markets are somewhat like China's second-tier or third-tier markets. Yishan Road and Zhenbei Road are in line with the first-tier market positioning. For me, I will only do two stores: Yishan Road Shop and Zhenbei Shop. Other places are not my business positioning. Another possibility is Pudong Jinqiao, because Shanghai’s villa district is in Sheshan and one in Jinqiao, Pudong. I want to be closer to my customers. Therefore, to do branding is to do subtraction, and the scale is to do addition. Then we have to think about the balance between addition and subtraction. Enterprises can not be too eager to always want to do addition, always want to take 10 billion, the company is to brake, rationale and positioning time. After everyone's triumph over the past few years, everyone suddenly encountered market fluctuations and felt a little numb.
Reporter: We know that bees tile is doing well in Shanghai. Do you think the positioning of this brand is accurate?
Tang Weihua: The bees tile solves the fast-paced life of the consumer groups in China's first and second tier cities. After returning home, he went to the garden and asked for “Gohomeâ€, and the price of bee tiles was close to the market. Gardinia's position is the European style of court and luxury. Many of its ideas are inspired by the Vatican and Versailles, so we have differences. In the market strategy, we are now waiting, because the consumption power of the market has not yet reached that stage. Sometimes waiting is inevitable. At the store, we have spread out in China's major capital cities.
Channel construction: Direct supply model VS circulation company reporter: The channel construction problem has always been valued by the enterprise. The source of this article is Huaxia Ceramics Network What kind of thinking do you have about channel construction? What aspects of the foreign ceramics industry are worth learning from domestic counterparts?
Tang Weihua: The channel structure of foreign markets has already experienced such a stage as we are now. Nowadays, the foreign building materials market is dominated by B&Q, and foreign companies are now mostly multi-brand operation models. This is unlike the single-brand store operation model in China. Foreign markets have also experienced single-brand store operations. However, because the EU is made up of a dozen small countries, the environment in each country is different. Therefore, foreign companies first multi-brand, and second, category distribution, for example, I only proxy PERONRA super spar MUSE-UM series.
Tiles are not standard parts, so it is very difficult to use the standard model of the Internet to transform and subvert the channels. Also, after 80 and 90 are lazy and brand consumption, behind the laziness consumption is brand consumption rather than category consumption. At the same time, in China, multi-channels are also an inevitable choice, because the Chinese market is too large and the purchasing power is uneven, which makes China have a multi-channel structure model, which cannot be changed. However, behind these channels is the repositioning of various channels.
One is the Red Star McGraw-Hill and the home of surprise. The Red Star Magdalen proposed to increase from the current 16 categories to 25 categories and reduce the risk through the increase of the category. There is also an appropriate reduction in the area of ​​single-item products, to accommodate more brands and create brand positions. In other words, companies do not have to go to the Red Star Meikailong, actually home, Xiyingmen (East China building materials chain store), unlike the new SinoSource. Because if you do not enter these store brands are not differentiated brands, it is not a member of the brand Lin. Enterprises will not be able to deliver brand awareness to consumers in the post-80s and the 90s. This is the strategic choice. Actually, Lucerne floor agents have been made. This is a signal that actually the house and the Red Star Macalline may erode part of the industrial chain. In fact, everyone is integrating the future direction and interacting in the industry chain.
The model for the future of the channel is a new type of enterprise with a mode of operation of the company, clear ownership, clear thinking, and strategic goals. They will become the mainstream in the commercial circulation channels. Such models as Huanyi and Huiquan will occupy the market and even exceed individual production companies. In fact, they have already surpassed a large part of enterprises.
With the competition in the market, there may be such a situation in the channels: It is possible that the product circulation enterprises are bigger and stronger, and even large in turn involved in brand operations. Channels are concerned that the single brand share in the product is too large. At the same time, companies are also worried that the channel providers will be able to directly influence their own sales. So there is still a problem. The chain of channels is too long. As a result, the price is high. In the future, who can bypass these and directly serve consumers will become the largest carrier structure in this industry. In the future, there may be 10 billion or 20 billion circulation companies, because such enterprises have the ability to supply terminals directly. These are the inevitable guarantees for future segmentation of the channel structure.
It can be seen that while the stores are changing, home improvement companies are accelerating through exhibitions and expansion. Local monopoly oligarchy home improvement companies are forming. For example, Guangzhou Star Art, Wuhan Jiahe, Shanghai's Shen Yuan and Xing Jie, Beijing's Dongyi and Yefeng, and Changchun's Lily Decoration, they have also done a hundred million in the local area. These channels squeeze each other's industrial chain, and they are all looking for positioning. This positioning process is a process in which profits are continuously diluted, and the process of choosing scale or individualization is also the process. What is the difficulty of Foshan Tao Enterprise? The first is the scale. Without scale, it cannot survive. The second is personalized choices. Without personalization, it is impossible to win brand reputation in the market. This is the market choice. Enterprises must face these problems in this crucial point.
From another perspective, as the concentration of brands increases, so-called designer rebates and related unspoken rules will tighten in the industry. In an era of black and white, we always go through a process. This is the inevitable period of transition. Enterprises must move forward. Behind this choice is the arrival of the third wave of Chinese ceramics industry. The reason is that a large number just need to be suppressed, and secondly, China's first wave of replacement consumption must jump out. The house of the 1990s has been 40 years since our generation. Now. The old five-storey and six-story buildings in the process of urbanization in China, and houses without elevators have not kept up with the times. There is a process of transformation and it is also the reason for many enterprises to slogan “Going Down to the Countryside†to the vast counties. Market to go.
Reporter: How do you look at the hierarchical pattern of such agents, agents, and distributors in the Chinese market?
Tang Weihua: In the past mobile phone industry, there were also such large- and small-generation models. I think there are two problems: one is channel management, and the other is channel profit maximization. The problem with our current model is that channels consume too much profit, and the result is a high terminal price. Actually, there are contradictions between enterprises and terminals. Enterprises think that their own shipping prices are very low and why terminal distributors sell so much. The problem is that the current chain of channels is too long. Can we cut down the channel chain and directly face the consumers directly? It is the direct supply terminal that has been discussed before. So now everyone is exploring, Dongpeng is exploring branches and sales of Dongpeng’s 16 branches have accounted for 40% last year. Marco Polo has set up its own operation and management center in 5-7 provinces across the country, including Shanxi, Jiangxi, Hubei, and Henan. It has built a logistics and warehousing center and a logistics platform. The stores in each county are directly supported by the company. Marco Polo's innovation in this model is to open the industrial chain, open up the source of profits, solve the problem of the value chain and solve the problem of consumption power. There are many factors influencing corporate channel management. There are many channel levels, and each layer must generate profits. The core of solving problems is the flattening of channel management. Talk about channel profits, the same products, companies use the current channel model to do, the terminal price of 800 blocks, using the direct supply channel model to sell 200, which has an advantage?
Reporter: The direct supply model is a challenge to enterprise management capabilities. Do you agree with this view?
Tang Weihua: So now that Foshan companies are not ready and combing well, they are still in the production category, not marketing or overall operations. Dongpeng and Marco Polo actually piloted the direct supply channel model. I think this model may have 2 or 3 companies succeed, and the successful 2 or 3 companies must be 10 billion enterprises. The internal resources of this model will also be integrated, and one message will be known to everyone in the QQ group. On the other hand, if companies are operating in this mode, Huanai can only be a self-selected brand and start over. To take a terrible example, the province established a transit warehouse with 12 logistics vehicles to complete the seamless coverage of the store, that is, 12 cars per prefecture-level city, take a week in each city, replenishment and distribution Get it all in one go.
Terminal branding needs to choose the right way Reporter: Gardner has a cross-border cooperation with some luxury brands, and Chinese ceramic companies have also made a lot of efforts to shape the brand. What do you think can be shared with us at home and abroad?
Tang Weihua: A brand is divided into several stages, firstly, popularity, then reputation, and finally, brand dependence. We now have a lot of focus on popularity, including cross-border cooperation like “If You Are the One†and a concept cooperation like I-phone4S. According to my understanding, this is called micro-innovation. This kind of innovation is still the structural innovation of the factory model, not the consumer-oriented innovation. Today's ceramic companies are often known for their reputation, not for brands, and brands need to be precipitated. Why do some companies want to use beasts, dry Lulu, just want to know. The second stage is the reputation. Dongpeng invited Qi Qin and May Day to do a concert this year. Dongpeng wanted to use these stars to arouse the memories of consumers and get closer to consumers. However, such activities cannot be integrated with the entire enterprise system.
Reporter: What do you think are the major differences between the foreign ceramic enterprises and the domestic ceramic enterprises in their strategies for distributors?
Tang Weihua: The biggest difference is that foreign ceramic enterprises are doing branding, team training and cultural cultivation, and domestic companies are busy pressing distributors to the merchandise. The starting point is not the same, one is studying consumers and the other is studying how to keep the kiln from stopping. The result is of course not the same. One terminal is a cumulative effect and establishes word of mouth; one, although it may be large, the terminal will abandon the brand when the benefits of the terminal are not met.
Corporate Innovation Should Be Systematized from a Single Polarization Reporter: How do you think companies should improve their competitiveness? What challenges do companies face in the pursuit of innovation?
Tang Weihua: The current problem of enterprises is how to change from unipolar product innovation to multi-level systematic innovation. In the past, why Foshan companies stayed in the imitation and price war, because the cost of imitation was too low and intellectual property protection was not in place. However, there has been a change this year. There is a settlement between Dongpeng and Jiajun. What I have seen from the back of this matter is that the great era of product innovation in the past has ended, and how companies are changing from a unipolar product model to a multi-core product model. This is something we need to think about.
Now the market is making adjustments. There are three aspects of the adjustment. In the first, we judge that in the second half of 2014 to around 2022, one of the biggest inflections is in 2019. China is officially entering an aging society and an important part of aging society. The sign is that real estate and related industries are beginning to decline. This phase will form low-end monopolies and high-end personalized innovation companies. Of course, this innovation is not just product innovation. In the second aspect, China’s real estate market will shift from the past 100% of the residential market to 30% of the specific market and 70% of the residential market. Here, 30% of the specific markets may be half of the villas and half of the commercial space, and the government will intervene. A lot of affordable housing. This stage, the integration of the ceramic tile industry is basically over, either you are low-end or high-end. The most fundamental issue is how we can create our own comparative competitive advantage and strengthen our core competitiveness in the next 10 years.
The current market structure is determined by a specific economic stage. We cannot regard our comparative competitive advantage as our own core competitiveness. This is what we need to recognize in this impetuous era. At the stage of industrial integration, there are several deep-seated problems. One is, as the vice president of the journal Roger said, can we grasp consumer appeal and spending power?
The demands of Chinese consumers are changing. They have shifted from the practical consumption in the 1960s to the consumption of the upstarts in the 1970s, to the happiness of the future and the consumption of fashion brands, and the gradual consumption of cars, houses and yachts in the past. To the western family-style experience consumption. Of course, this demand is not a mass-scale product, but a personalized product. This may have details that we didn't pay attention to before. For example, some companies have started to pay attention to the integration of accessories, waistline, and all-family homes that didn't pay much attention to in the past, such as the recent alliance between Jin Yitao and Chuanda. On the one hand, there is a growing number of full-class products. On the other hand, the integration of accessories at the back end of the industrial chain is accelerating. Foshan now has a one-year-to-billion-dollar enterprise, which was unthinkable before. But big innovations are gone, that is, the use of chemicals to define the composition of bricks is no longer innovated. Now it is more about artistic innovation, structural innovation, and detailed module innovation.
Reporter: Innovation is necessary to cope with industry consolidation. What breakthrough will ceramics companies have in terms of innovation in the future?
Tang Weihua: In order to better cope with the next new industry consolidation, I think there may be innovative changes in the following five aspects. One is that the subdivision of brand innovation will appear. With the acceleration of industry integration, the brand's voice in the market will increase, and cultural appeal and product differentiation will become mainstream. The second is the innovation of the management system and the modern system. At present, the competitiveness of our entire industry is still in a relatively elementary stage during the gradual integration of the entire industry. In the future, there are still many opportunities for enterprise system and internal management innovation. The third aspect is the innovation of cost strategies. China has already faced a process of gradual increase in costs. There are also opportunities for cost innovation. The fifth is channel innovation. The sixth point is the innovation of marketing techniques. In the past, we still had some room for innovation in brand culture and marketing concepts. In general, innovation is premature death, and no innovation is waiting for death. For corporate brand promotion, innovation is a very challenging matter for our future home industry. Moreover, from the perspective of the industry's gradual integration, innovation also plays a key role in guiding our future industry.
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