Having experienced the high-speed growth in the policy period of home appliances going to the countryside, exchanging old household appliances for new ones, saving energy and benefiting the people, and the horizontal adjustment after the withdrawal of the policy, the refrigerator industry has entered a period of steady development. With the continuous process of reshuffle, it is an indisputable fact that the competition situation of China’s refrigerator industry will be more severe.
Under such a situation, “industrial upgrading”, “product structure adjustment” and “technological innovation” have become the only wonderful “living method” in the refrigerator industry with growth power. But specific to the enterprise side, how to define the way of survival? The answers given by each participant on the field are different.
Technology, industry and Trade: technological innovation is the first driving force
In China, when it comes to the first brand of refrigerator, many people first think of Haier. After years of competition and reshuffle, the market pattern of China’s refrigerator market has evolved from “Four Golden Flowers” to “1 + 4 + n”, in which “1” refers to Haier refrigerator. According to the data of zhongyikang, in 2018, the retail share of Haier refrigerator offline market increased by 3.52 percentage points and continued to remain the first in the industry, with its retail share 3.08 times that of the second in the industry. By the first quarter of 2019, the annual cumulative share of Haier refrigerator has reached 36.5%, ranking first in the industry.
“A leading enterprise that has long focused on R & D and innovation, brand building and constantly leading the trend” is the self positioning and evaluation of Qingdao Haier Group in its 2018 annual report. Observing the contents of its annual report, in 2018, Qingdao Haier’s actual revenue was 183.317 billion yuan, a year-on-year increase of 12.17%, of which 5.081 billion yuan was spent on R & D, a year-on-year increase of 12.66%, accounting for about 3% of the operating revenue. The annual report shows that by the end of 2018, Haier had applied for more than 43000 patents worldwide, and Haier accounted for more than 60% of invention patents.
In the past two years, China’s refrigerator market has changed from high-speed growth to high-quality growth. In the face of the “new normal” pattern of the industry, refrigerator enterprises also feel the pressure from the level of market competition. Haier refrigerator not only stabilizes the high-end market position with Casati brand, but also continuously infiltrates the medium and low-end market through the technology and price advantages of Haier, commander-in-chief and other brands, so as to stabilize its position pattern in the whole domestic refrigerator market. At the product level, Haier also showed its emphasis on refrigerator products. At awe this year, it not only showed its core AI capability of refrigerator, namely “big data preservation” technology; At the same time, a new product “Heyan refrigerator” was released, which is said to extend the preservation dimension of the refrigerator from temperature and humidity control to oxygen control, and from the preservation in the refrigerator to the preservation in the whole space of refrigeration and freezing.
“Behind a large number of original leading technologies is Haier’s foundation supported by global R & D and global manufacturing system.” The relevant person in charge of Haier refrigerator said that at present, relying on the 10 + n model built by Haier in the world and the 30 factories built by Haier refrigerator in the world, Haier refrigerator can comprehensively practice the “Trinity” localization strategy, realize the connection with global user needs with global resources, and continue to produce subversive products.
“In the large industry environment where the replacement demand has become the main demand, such as newer foam materials, VIP heat insulation panels with better performance, platinum nano ions or ozone sterilization devices, more and more new technologies are applied to refrigerator products, which will certainly inject a ‘booster’ into our refrigerator industry.” Shan lingxuan, general manager of whirlpool (China) ice washing products, also mentioned the importance of technological innovation to refrigerator enterprises in the recent visit and research of China home appliance network. According to him, whirlpool China has also made integrated solutions in addition to developing independent wine cabinets, taking into account the size restrictions of some consumer families on the placement environment of refrigerators. “We use the cross split refrigerator. The upper two are still refrigerated and the lower left is still frozen, but the door in the lower right corner will be made into a temperature adjustable wine cabinet with transparent door. The wine cabinet will be separately equipped with a wooden frame for red wine, which can be separated and used as a traditional temperature changing area when not needed.”
On the other hand, on the basis of whirlpool frozen age and frozen age Pro Series refrigerators, whirlpool is still developing functional technology for sterilizing refrigerators with ozone. “We will control it at a reasonable concentration, use the oxidation of ozone to kill some bacteria and microorganisms, and it is harmless to the human body. The ozone is distributed to every position through the internal air duct circulation.” Shan lingxuan said, “But even so, it’s hard to say that what we put in must be fresh. The real freshness should be the feeling of just picking it from a tree. At present, one of our methods is to use the company’s unique light and preservation technology to slow down the respiration of food materials by simulating light; another technology is still in the research and development stage, which is also further technological innovation and product upgrading from the perspective of inhibiting the respiration of food materials.” It is revealed that the refrigerator products equipped with this black technology may be launched on the market next year.
“Some people say that this year’s refrigerator market situation is grim, but in fact, we will always be in such a tense process.” Although the performance of Q1 refrigerator market in 2019 is not as good as expected, Shan lingxuan believes that the overall refrigerator industry will still maintain a relatively flat but slightly fluctuating state. In this environment, the factors driving the development of the refrigerator industry in the future come from the change of social and family structure, but also from the technology driven level. These are what a refrigerator manufacturer needs to focus on.
Transformation and the top: there are no bad industries, only bad enterprises
Since the introduction of microcrystalline fresh-keeping technology last year, the topic of Midea refrigerator has been high. After the official announced Chen Kun as the spokesman this year, it seems to have raised the high-end style of its products again. To explore the survival of Midea refrigerator, we should trace back to the transformation and development of Midea Group earlier.
The first transformation and upgrading of Midea Group began in July 2011. At that time, Fang Hongbo began to realize that the old development model (“large-scale and low-cost” model) made Midea a 100 billion level enterprise, but later it basically belonged to “small profits but quick sales without making money”, and accumulated huge risks. It was the best policy to transform as soon as possible to eliminate hidden dangers. Therefore, since the United States Air Conditioning division took the lead in opening the road of transformation from large-scale expansion to lean operation, and after a period of implementation, it began to vigorously start the supply side reform in each division within the group in 2012.
“From the perspective of Midea’s growth process, the proposal of ’boutique strategy’ is Midea’s’ reform ‘of itself.” Wu Wenxin, then president of Midea’s household air conditioning division, commented that the reform was “an inevitable move for enterprise transformation”. According to the new standards formulated by Midea’s transformation and upgrading strategy, “boutique” must meet two standards: first, it must meet the needs of consumers, and it is best to exceed the expectations of consumers; Second, no matter what the price, every product must be high-quality. During this period, Midea Group carried out large-scale layoffs and personnel re planning, and Midea Central Research Institute was officially established in 2014. So far, Midea Group has formed a “two-tier and four-tier” R & D architecture system in which the central research institute conducts research on disruptive cutting-edge technologies and common future technologies, and the lower business unit is responsible for basic personalized technology research and product development. Over the years since then, the two layers of technology research have jointly provided Midea Group with medium and long-term technology reserves and future technology exploration. So far, Midea has 20 R & D centers around the world.
On the other hand, on the basis of promoting “high-quality products”, Midea started its transformation again in 2017 and announced its transformation to “the world’s leading consumer electronics, HVAC, robotics and industrial automation, intelligent supply chain (logistics) technology group”. During this period, Midea Group carried out a number of mergers and acquisitions, cross-border coordination and internal organizational structure adjustment.
Back to Midea’s refrigerator category, the implementation of the two strategic transformations in each business unit is not immediate. The high-quality strategy first saw results in Midea’s air conditioner, Little Swan Washing machine and other product categories a few years ago. Later, with the opening of the scientific and technological transformation strategy and the full implementation of the high-quality strategy, Midea began to see transformation results in other product categories. Until last year, Midea refrigerator launched a microcrystalline fresh-keeping refrigerator integrating high-quality standards and scientific and technological elements, and the outside world officially saw the presentation of high-end representative works of Midea refrigerator product categories. “But in fact, long before that, we had accumulated user research and product technology for a long time.” The relevant person in charge of Midea refrigerator said.
The advantage of “microcrystalline fresh in one week” technology is that it can extend the original fresh-keeping cycle of food materials to one week. Whether from the successful promotion of “glacier silver” series, or the promotion and upgrading of “Xingyao gray” and “Morandi gray steel plate” series, Midea refrigerator has won market recognition while attracting great attention from the outside world. Berlin, general manager of Midea refrigerator division, revealed that under the industry situation of double decline in volume and volume in the first half of this year, the share of most refrigerator brands in the domestic 1W + price refrigerator market is falling, and only two brands have achieved growth, one of which is Midea.
In addition to the “microcrystalline” preservation technology, Midea refrigerator also showed the latest fourth generation of fruit and vegetable pesticide residue removal technology in the recent “brand night”. This technology applies the space deep ultraviolet technology to the refrigerator for the first time. Compared with the previous three generations of pesticide residue removal technology, the fourth generation technology has the obvious leading advantages of long service life (life more than 10000 hours), low energy consumption and mercury free.
“I hope that the future Meide refrigerator is not only a food preservation machine with a sense of science and technology, but also a wisdom integrated into the home.” Berlin stressed when expounding the concept of Midea refrigerator science, “in the days to come, we will always adhere to the original intention of the moment, obtain the direction from natural product knowledge, and constantly make original technological breakthroughs to bring users a fresh experience of innovation, original flavor and safety.”
Voice of small and medium-sized brands: we need a benign competition platform
“The government has played a great role in promoting the development of China’s household appliance industry for so many years, especially in the popularization stage of the refrigerator market and the formulation and implementation of relevant standards.” During the visit and investigation of China home appliance network, the relevant person in charge of noble electrical appliance group told reporters that in the current stock market, with the white heat of market competition, the concentration of refrigerator brands has been continuously improved, and the living space of small and medium-sized enterprises has been further squeezed. According to the introduction, the total sales volume of noble refrigerator and freezer last year was 960000 units, with a sales volume of about 1.05 billion yuan, and the domestic and foreign sales were divided by half. Therefore, the domestic sales volume of its refrigerator and freezer products was about 480000 units.
“Why are the big top-level refrigerator brands selling briskly in China and even selling world-class? Because they are good at putting their energy into the vicious price competition of reducing you by 100 and me by 110. In the long run, small brands can’t afford to consume. If they don’t pay attention to the market, they may be taken away by others.” Facing the competitive pressure from big brands, the person in charge hopes that the government can carry out strict supervision at the legal level. Enterprises can not sell products below the cost. They need to ensure that they have certain funds to do R & D and improve the level of process equipment, so as to make world-class high-quality products. “They (big brands) have both manufacturing advantages and scale advantages, and channels also have advantages. The price will come down. They use the price promotion and capital acquisition ability even lower than the cost to get rid of some small brands. After excluding small brands, they will abide by the law. This competition is too cruel for small and medium-sized brands that have always made products in a down-to-earth manner.”
In the continuous survey of refrigerator enterprises conducted by China home appliance network in recent years, the reporter found that under the new normal of stable development of the domestic refrigerator industry, some small and medium-sized refrigerator enterprises, including noble, have indeed been facing the market competition pressure from upstream and downstream industrial chains and top brands, which makes them have to turn their eyes to the export market to seek strategies to break the situation, This can also be seen from the fact that noble’s refrigerator sales last year were half of domestic and foreign sales.
At the same time, under the strong pressure, small and medium-sized enterprises also hope that the government can introduce large macro policies to restrict the vicious competition in the industry and create a fair and benign competition platform for small and medium-sized enterprises. In addition, they paid attention to the consumer demand from the subdivided market and began to focus on targeting the market segments through differentiated products to obtain new growth power. For example, noble gained certain recognition in the market with its unique stainless steel inner refrigerator products with high processing accuracy requirements. According to the above person in charge, the sales volume of noble stainless steel inner refrigerator with the price of 2W + reached more than 20000 last year, and attracted some large domestic and foreign brands to explore stainless steel technology.
“Last year, many second and third tier brands withdrew, which is forced by industry competition, but it is also a general trend.” The distinguished person in charge told reporters that the trend of industrial segmentation is becoming more and more clear. In the future, the whole domestic brand can only accommodate about five, and more than five will not be in this circle. How can we survive? “When we build a large platform, we will play the role of a terminal. In fact, the division of labor in the future is also very clear. We will be a hardware provider. For example, when others provide plastic containers for refrigerators, we can provide stainless steel and provide consumers with different choices.”
In addition to the different survival rules of enterprises mentioned above, there are refrigerator enterprises such as Konka and TCL that have entered the white TV industry from black TV for more than ten years, trying to take advantage of the brand appeal of the color TV market to seize the survival way of some markets by integrating new brands or strategic adjustment; For example, Omar believes that it has unique advantages in manufacturing efficiency and circulation efficiency, seeks development through export, and creates an enterprise development road of “cheap and good” refrigerator for users; As well as the transformation of the Internet industry such as Xiaomi, it will combine with a traditional refrigerator enterprise mentioned above to build a “rice” type “pop” refrigerator, and will launch the market in the next time to impact the new way of traditional marketing mode.
The reshuffle process of the refrigerator industry will continue. If it is regarded as a sea, perhaps as Wang Lei, vice president of China Household Appliances Association, said, although the sea is calm, the dark tide is surging in the depths, pregnant with surging forces of change.