Appliance companies "price war" is difficult to last

Since the 90s of last century, the "price war" has begun to appear frequently among home appliance companies, and once it has reached a point of enthusiasm and bloodyness, the home appliance industry has once faced the risk of loss in the entire industry.

Although calm down, large-scale price fighting did not re-emerge, but the home appliance industry has entered a "micro-profit era." According to the "Securities Daily" report, at present, the average gross profit margin of products such as TV sets and refrigerators is only 15% to 20%, and only 20% to 30% of companies have higher premium brands. The overall gross profit margin of the household appliance industry is 24.95%. Most home appliance companies have lower gross profit margin than the industry as a whole.

In the market economy, prices are indeed one of the most important means of competition. Taking a certain price reduction strategy can indeed attract consumers' attention and attention and win more market share. However, it is not possible to cut prices blindly or even to cut prices. Because, if the rate of price reduction exceeds the extent that the enterprise can bear, then the company is likely to “make up for” such things as cutting corners, lowering quality standards, and weakening service functions. In the end, not only the interests of consumers will be affected, but also the reputation and image of the company will be seriously affected.

In fact, a mature market and a mature enterprise will not lock down the means of competition on prices, and prices will not become the only bargaining chip among enterprises. Every well-known international company and famous brand has never made a fuss about the price, nor has it used any price war with other companies.

Although the "price war" of China's home appliance companies has been vigorous and vigorous, those well-known international companies and well-known brands have rarely joined the "price wars" of Chinese companies, but have continued their own business strategies and operating guidelines. More importantly, they did not affect sales and influence the market because of the "price war" among Chinese enterprises.

In fact, China’s home appliance products have long reached the advanced level in the world. However, it is because China’s home appliance companies will only sell pre-“price wars” instead of focusing on brand cultivation, image building and after-sales services. As a result, the advantages that could have competed with internationally renowned companies and well-known brands are completely lost. Even degenerate into a synonym for inferior products.

It is reported that at present, the market repair rate of home appliances in China is showing an upward trend year by year. This should not be the reason for the technical aspect. It is because China's home appliance companies have to deal with the "price war" to bring about too low gross margin, and the cost increase factor is too many, had to reduce the quality standards of products and reduce service levels. In other words, over the past few years, some home appliance companies in China have not improved or innovated in production processes or production technology, but have greatly regressed.

China's home appliance companies cannot only play "price wars." "Price wars" will only make China's home appliance companies less and less innovative, service levels become lower and lower, and market competitiveness is getting weaker and weaker. This point must arouse the attention and alertness of Chinese home appliance companies.