As early as 2017, the "shuffle theory" began to appear in the ceramic industry; until 2022, many practitioners bluntly said: the reshuffle of the ceramic industry has just begun. As the incremental demand brought about by my country's demographic dividend and rapid real estate development gradually disappears, the pan-home furnishing industry, including ceramics, has entered the "second half." The environment has changed, the market has changed, and the logic of enterprise development has also changed. So what should the ceramic industry do in the "second half"?
On September 3, at the 12th China Real Estate and Pan-Home Industry Cross-border Summit "New Opportunities, Big Brands" and the 2022 "Top Ten Brands of Building and Sanitary Ceramics" awards ceremony, the organizer China Ceramics Network A roundtable forum with the theme of "What should ceramic people do in the second half" was specially set up, and Han Feng, founder of Guiren Huzhu Strategic Marketing Consulting, You Jun, general manager of Haosheng Enterprise Brand Management Center, and Ceramics Division of Wrigley Home Furnishing Group were invited Four guests, Cheng Zhen, general manager, and Chen Gaozhao, founder of Ferona Cement Tiles, gave an in-depth interpretation of the ceramic industry. The moderator of the forum was Zheng Zhe, editor-in-chief of NetEase Home News Center.
The following content is compiled based on the forum conversation records and has not been reviewed by the guests themselves.
01
Zheng Zhe: Since 2020, under the combined influence of multiple factors such as overcapacity, consumption upgrades, increased environmental protection, repeated epidemics, real estate thunderstorms, and domestic and foreign economic weakness, the construction ceramics industry has been in decline. The cards continue to intensify, and the Matthew effect becomes increasingly prominent. Some people even believe that more than half of the companies and dealers in the ceramic industry will be eliminated in the future, and the entire ceramic industry has officially entered the "second half". Although this statement sounds a bit sensational, it is not groundless. First of all, I would like to ask all the guests, combined with the characteristics of their respective companies and the actual situation of the industry, how do you view the challenges and opportunities faced by the "second half"?
Cheng Zhen: The current industry and enterprises are indeed facing great challenges, including changes in consumer demand, reduced market passenger flow, rising costs, frequent thunderstorms in real estate, etc. These uncertain factors have a great impact on enterprises The survival and development of the country have put forward higher requirements. Of course, we have also seen many opportunities. When the needs and aesthetics of consumers and users are upgrading, the fashion trends of ceramic tile products will also change. The most obvious phenomenon this year is that products such as light-grained bricks, plain-colored bricks, and textured bricks have become popular. Wrigley has been aware of this in the past few years, and has adjusted the brand structure based on product trends. .
The question of how to do it in the "second half" is actually how to seize the opportunity when the company comes to it. I think we should start from the product itself, and the product itself should start from the user's perspective and the user's pain points. The key is how to create brand differentiation and create products that are valuable and professional enough to solve consumers' pain points and meet their needs, or even potential needs. From this perspective, companies can naturally find their own foothold and development space.
You Jun: Regarding the challenges and opportunities in the "second half", I will briefly talk about three points. The first point is changes in the consumer market. With the rise of the new generation of consumer groups, their consumption habits and needs are significantly different from those of the previous generation. Changes in consumption trends will inevitably bring about changes in products. This is our opportunity.
The second point is to test the determination of the company. Although life is difficult now, at least we can be sure that China will still be the world's largest market and the best market in the next five years. Therefore, at this time, our business mentality must be more stable and we must maintain strategic focus.
The third point is, if it is not broken, it cannot be established. Everyone knows that the ceramic industry has suffered the most from this real estate storm, but it is precisely because of this that the original abnormal game rules have been broken, and the entire industry chain has the opportunity to reshape healthy game rules and create a better future. The development of multiple enterprises creates opportunities. From this perspective, real estate thunderstorms are not necessarily a bad thing.
Chen Gaozhao:With the development of the ceramic industry today, in my understanding, it is not the relationship between "first and second half", but the change in the playing field. The era when channels are king is over, and the era of consumer brands has officially begun. It's equivalent to the previous competition being about playing basketball, and the next competition is about playing football. If companies still compete and play football according to the thinking and rules of playing basketball,, you will find that it is completely unworkable.
In fact, there are two ways to play in the new arena, one is the way of playing for top brands, and the other is the way of playing for non-head brands. In the next few years, leading brands will continue to strive for scale and efficiency, making good use of the better resources, funds, talents, scale, and efficiency at their disposal to continuously expand their share. The next thing non-leading brands have to do is to recognize the subsequent development trends, quickly find their own positioning, and lock in a segmented track. The main reason why many brands find it more and more difficult to do business is that they do not have the genetic advantages of leading brands, but they are still using the methods of leading brands, and finally find that there are many crises.
Han Feng:In fact, the customization industry began to mention the "second half" theory as early as 2008. I have three views on how to do the "second half" of the ceramic industry. The first point of view is that all enterprises must follow the principle of "three trends in one". These "three trends" are the national situation, industry trends and the advantages of the enterprise. Only by following the trend can we achieve success. This sentence is very applicable to the ceramic industry.
The second point of view is that we must have a "cold winter" awareness. Even Huawei's Ren Zhengfei said that we should pass on the cold to everyone. Looking back on the "first half" of the ceramic industry, everyone was fighting for scale, sales, and extensional growth. The core of the "second half" is to focus on cash flow and profits and pursue connotative growth. We must first ensure survival before we can talk about how to live better and longer.
The third point of view is my personal analysis of the structure of various industries in China. The pattern of the Internet industry is that no grass can grow under the big trees. The rise of Internet giants has directly killed most companies; the pattern of the home appliance industry is that the grass is lush under the big trees. There are hundreds of billions of companies such as Midea, Gree, and Haier, as well as companies like... There are less companies like Little Bear with a scale of only a few billion; I think the pattern of the ceramics industry should be one where a hundred flowers bloom under the big trees. In this environment, companies must find their own ecological niche to survive and develop.
For example, head brands must be comprehensive, with all categories, all channels, and all areas of marketing; second-tier brands must be stronger, fully optimizing themselves, and strengthening themselves; third-tier brands must be specialized, focusing on subdivided categories. To achieve the ultimate in professionalism; high-end brands must be high-end and capture the needs of customers at the top of the pyramid; regional small brands must be fast, respond flexibly to the market, and achieve fast sales and quick return on costs. I think that in the future, as long as companies find their own ecological niche in the industry, everyone can survive.
02
Zheng Zhe:As the people who can feel the fire most on the front line of the terminal, dealers can be said to be the most sensitive to the market. In the current environment, what difficulties and challenges do you think dealers are encountering? What kind of support do they need most? How should companies guide them through this special period?
Cheng Zhen:I think dealers should do these things well in this uncertain environment. First of all, in terms of channels, the biggest feeling dealers have about the market is that the flow of people has dropped significantly. Faced with the differentiation of channels, dealers cannot just focus on store retail, but must turn to diversified channel operations. The direction of omni-channel operation can be the decoration and home improvement channels, which are currently developing rapidly, or some small B-end channels, including design studios, plasterers, etc., who can influence consumer decision-making.
Secondly, in terms of communication, facing the new generation of consumers, terminal store drainage work needs to be more diversified and specific. Many people know that they need to build a self-media matrix to attract traffic, but they do not understand the core key. No matter what kind of matrix or brand, the most important thing is what high-quality content we can bring to users. Dealers must learn how to use existing materials such as ceramic tile products, space plans, real-life cases, etc., through videos, pictures Or a better way to spread it on the platform.
The last point is also the most important point. You will find that consumers are increasingly inclined to simplify the purchase of ceramic tiles and decoration. In fact, they are not lazy, but want to spend more time on the things they like. Consumers don’t want to spend too much time and energy on decoration, so in addition to selling ceramic tiles, we also provide more services, including design, auxiliary materials and even construction. Extending the service aspect is actually conducive to promoting the growth of dealers.
You Jun: Dealers who have done relatively well through a single channel in the past will face greater difficulties in the later period. This is an objective problem. On the one hand, today's traffic is becoming more and more dispersed and divided into different channels. It is very difficult to survive and develop if you only rely on one channel. Dealers must gradually move towards multiple channels.develop. On the other hand, market competition has increasingly higher requirements for dealers to improve their service value, and delivery requirements and delivery standards are also getting higher and higher. Therefore, dealers must not only improve their service awareness, but also create service value.
From the dealer's perspective, in addition to multi-channel development and improving service value, the most important thing is to improve the dealer's own system capabilities. Nowadays, selling ceramic tiles is no longer just about selling the products directly as before. Dealers have more things to consider, so they need to comprehensively improve their system capabilities, such as store experience, inventory turnover, team building, channel maintenance, etc. . I think if dealers can do these things well, their future survival and development will still be relatively good.
Chen Gaozhao: Regarding the difficulties dealers are currently encountering, to be honest, dealers of our brand have actually made money, so there is naturally no crisis. If I have to give any advice to dealers, , I would like to make two suggestions. The first suggestion is not to mess around. Broadly speaking, China's ceramic tile dealers are still mostly small B, and they do not have the ability to do global marketing on their own. Sometimes you can see some dealers toying with these things themselves, but in fact most of them are just messing around. In terms of marketing, dealers actually need the brand to guide them on how to do it, or the brand can do it directly to do this job well.
The second tip is to choose the right brand. In the next competition in the ceramic industry, the leading brand camp has gradually become clear, and non-leading brands can also achieve great development by finding their own direction. For non-headline brands, whether they are doing well or not is no longer measured by their past "volume", but by whether the brand can manage its target customer groups well in a clear positioning. Therefore, it is really important for dealers to choose the right brand. If you really don’t know how to choose, you are welcome to choose Filona. After all, most of our dealers still make money.
Han Feng: At present, not only manufacturers are conducting knockout rounds, but dealers are also conducting knockout rounds. I roughly divide the existing dealers in the terminal into three categories: the first type is a model that relies on system and system operation, these dealers can still achieve performance growth; the second type is a model driven by the boss, this type of dealers Although there is a small team, if the boss does not keep an eye on this task, the performance will immediately decline; the third category is the pure mom-and-pop store model. The advantage of mom-and-pop stores is that they can survive by cutting costs during an economic downturn.
This is actually just like the manufacturer. Those in the head can survive, and so can those in the tail. The ones in the middle are the most uncomfortable. From the manufacturer's point of view, what needs to be done is to train the second and third type dealers into the first type.Transform the boss-driven model into a system-driven model, and at the same time comprehensively improve mom-and-pop stores. If improvements cannot be made, appropriate survival of the fittest must be carried out.
03
Zheng Zhe: Please use one sentence to predict the future development trend of the ceramic industry, or summarize today's topic.
Cheng Zhen: If companies want to survive better in the future, I am personally more optimistic about three strategies. The first is cost leadership, the second is differentiation, and the third is focus and concentration.
You Jun: Only by surviving first can you have the chance to live a better life in the future.
Chen Gaozhao:The development trend of the industry is actually very obvious - a hundred flowers bloom under the big tree, and you either hug a tree or guard a few flowers.
Han Feng: To paraphrase Mao Zedong’s words - you hit yours, and I’ll hit mine. By focusing on their core strengths and genes, everyone can survive.
