"I no longer do this brand."
“A certain brand closed several stores in one year.”
“The operator of a certain company has switched to entrepreneurship.”
“We used to be able to sell 40-50 million dealers, but the team has shrunk significantly since last year.”
……
Since this year, Zhongtaojun has often heard news about brand changes, store closures, layoffs, and staff losses in conversations with ceramic tile dealers from all over the country. More than one dealer even lamented, "What's wrong with this industry?" ?"
Today, let’s talk about what stage the ceramic industry is currently at and what the future is for ceramic tile dealers under the influence of the general environment. This topic is a bit big, and Zhongtao Jun hopes to share some phenomena, inspire ideas, and communicate and discuss with more friends.
01 Will the economic cycle affect the ceramic industry?
Before talking about the current situation of the industry, it is necessary to talk about the macroeconomic situation.
In the July that just ended, including manufacturing PMI, PMI new export orders, real estate sales, investment, social financing credit M2, etc., they have declined for four consecutive months; while industrial production, fixed asset investment, social retail, etc. Consistent economic indicators have also begun to fall. This means that the downward pressure on the economy has begun to be transmitted and spread, and the market expectations of economic recession have increased. Only price data, as a lagging indicator, is still at a high level.
In fact, the decline in social financing credit affects the real economy, and the transmission time is generally about 6 months behind; real estate sales have begun to slow down since May, and then are transmitted to the investment side. In addition, overseas production has gradually resumed, the capacity substitution effect has subsided, and export orders have fallen; the K-shaped economic growth, small and medium-sized enterprises are squeezed by commodity costs, and employment is low, and consumption growth has always been weak; commodity prices are too high, exceeding the real economy affordability, which has a restraining effect on economic activities. People call the above the power of "cycle".
You will find that whenever we talk about the economy this year, the word "cycle" will inevitably be mentioned. Ren Zeping, a famous economist, believes: "The economy has its own cyclical laws of operation. It has experienced recovery, overheating, stagflation and recession, and it starts again and again."Liu Run, founder of uo;Runmi Consulting, believes: "A complete economic cycle has four stages: prosperity, recession, depression, and recovery."
As an objective law, will the economic cycle have an impact on the ceramic industry and ceramic tile dealers? The answer is yes. Because no matter what industry they are in, companies want to "prosper" and fear "bust." The impact of the "cycle" may not directly target a certain industry, but it is closely related to everyone. "Housing" is a very typical example.
02 What information does the real estate industry reveal?
Continuing the previous topic, let’s talk about the real estate industry, which is known as the “mother of cycles”.
Some people may find it strange why the real estate industry is the "mother of cycles"? Looking at the wealth effect of the real estate industry alone, Russ Tweed once calculated in "The Inescapable Economic Cycle" that the real estate market value of typical countries is generally 2-3 times the annual GDP, which is the total variable price wealth. 50% of the volume, which is unmatched by other asset markets such as the stock market, bond market, commodity market, and collectibles market.
The important thing is that "houses" have both the attributes of investment goods and consumer goods, and have a long industrial chain. The sales volume, land purchase and newly started construction area in the real estate market are important economic leading indicators. Therefore, whether in developing countries or developed countries, the real estate industry plays a vital role in the macroeconomics.
In the first half of this year, affected by unfavorable factors such as repeated epidemics in various places and weak demand expectations, most real estate companies showed negative sales growth. What is even more serious is that overdue debt, thunderstorms, layoffs, and salary cuts have become the norm in the real estate industry, and the corresponding pessimism pervades the entire industry.
Since April, real estate-related policies have been introduced intensively in various places. From initial encouragement, to later restrictions, to the current stability, behind this series of attitudes is actually an unclear "economic account." However, whether it is from an economic, social or corporate perspective, the real estate industry will not collapse. For the ceramic industry, which once relied on the rapid development of the real estate industry, in addition to the certainty of "bubble" under macro-controlo;Other than being broken, no one can predict whether the days to come will be sweet or bitter.
03 Is the ceramic industry still viable?
Project failures, repeated epidemics, rising costs, shrinking demand, environmental protection and carbon reduction...the current challenges faced by the ceramic industry are more and more difficult.
Some time ago, listed ceramic companies such as Mona Lisa, Dongpeng Holdings, Diou Home Furnishing, Stone Co., Ltd., Yuexin Health, and Keda Manufacturing successively disclosed their performance forecasts for the first half of 2022. Among them, only two ceramic companies The company's net profit is expected to be profitable, and the other four ceramic companies have a combined expected loss of more than 800 million yuan.
On July 28, the Foshan Ceramics Industry Association released relevant statistical data on the ceramic industry in Foshan's jurisdiction in the first half of 2022. The output of wall and floor tiles was 370 million square meters, a year-on-year decrease of 13.3%. 35 ceramic construction companies have a total of 194 production lines, of which only 116 are in production, and the kiln operation rate is less than 60%. Some media reported that the situation of opening kilns in production areas such as Enping, Zhaoqing and Qingyuan in Guangdong is not much better than that in Foshan. Most ceramic companies have not reached full production capacity and are still reducing production.
What’s even more terrible is that the Qingyuan People’s Government’s website recently announced the “Qingyuan City’s Fourteenth Five-Year Plan for National Economic and Social Development and Outline of Long-term Goals for 2035”, which clearly states that ceramics during the “14th Five-Year Plan” period Production lines must be controlled within 70. This means that more than half of the ceramic production lines in the Qingyuan production area will be cut off within five years, and many ceramic companies will face the pressure of being eliminated.
As early as a few years ago, some industry insiders claimed that the ceramic industry has entered the "coldest year." Now ceramic companies are really suffering from brutal losses, production cuts, and elimination. Should 2022 be called the "coldest year"? One year"? If you look back at the law of "cycle", you will find that everything is bound to happen: when the industry has a period of prosperity, there will inevitably be a period of decline; when there is a period of depression, there will inevitably be a period of recovery. Therefore, the ceramic industry will not be "failed". Only ceramic companies and practitioners can really not survive.
04 What is the way out for ceramic tile dealers?
Recently, a very popular view in the industry is that the ceramic industry will return to the era of dealers. In fact, there is no need to discuss the topic of how much the ceramic industry needs dealers. Whether dealers can achieve healthy and sustainable operations after representing a brand is the key to "ecological balance".
Some people believe that when competitors are waiting and watching or retreating, it is a good time for dealers to "advance" to seize the market. Therefore, dealers should increase investment, redecorate stores, improve brand image and product premiums, and proactively seek innovation and change in order to stand out from their declining peers. Although "persistence" is the basic condition for winning the last laugh, in the face of an unknown tomorrow, which brand dares to say that it is completely worthy of the trust and trust of dealers with their eyes closed?
Some people believe that given the opportunity of the rise of the slate category, dealers can follow the strategic positioning of the headquarters and use slate to enter the field of complete customization. This is indeed a good way out, but the premise is that dealers must not only have a service mindset, but also have a service system and capabilities. After all, most dealers have been accustomed to the comfortable life of "paying goods in full". If they suddenly start to provide on-site services, they are bound to face various customer complaints and disputes. However, how to satisfy customers and gain a good reputation is still difficult. It is the core of the long-term operation of the brand.
Some people believe that dealers can try partner-style multi-category integration to break away from high-cost home furnishing stores and create a one-stop home improvement material selection hall to attract traffic to each other through different categories. In fact, this "grouping for warmth" model is not new in the industry. A dealer who tried this model once told Zhongtaojun that multi-category integration has extremely high requirements for "people, goods, and places". Whether several bosses are working together, whether the product positioning can meet most needs, whether the function and experience of the material selection space are up to standard, if any of these key factors is not done well, it may cause the "group" to fall apart.
Some people think that dealers can consider changing industries to continue fighting. Although this is a road with infinite possibilities, it is like a mountain. Even if you really have the courage to start all over again, it will be quite challenging for "novices" to outperform "veteran players" on a new track. Furthermore, entering a new field means that the company team must be retrained and may even be reorganized. In addition, it is obviously unrealistic to rely on the brand's own traffic and the traffic management of shopping malls, which means that customers and channel resources also need to be acquired and accumulated from scratch.
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In summaryAs mentioned above, the ceramic industry has not reached the end of the road, and ceramic tile dealers are not completely hopeless. It is just that under the influence of the general environment, the difficulty of many things has become higher, requiring practitioners to have a clearer understanding and a firmer determination. Determination and greater perseverance.
Here Tao Jun shares a chicken soup that was particularly popular some time ago: "What is more terrifying than the epidemic is the mindset of having an epidemic." To put it bluntly, don’t let the current situation of the world become an excuse to fall behind. Only action can change the status quo.
