Since 2008, the international economic situation seems to have been unstable for a while. It just passed in 2008 and was a little more stable. The economic crisis in 2011 reopened. The impact of these macroeconomic situations on all walks of life cannot be underestimated. Take the furniture industry as an example. Furniture companies that made exports before 2008 almost never set foot in the domestic market, because there are endless orders that can be made by export alone, and making money in the order processing mode is simple and fast, although there is no own brand and Channels, but many processing "predators" have become rich. However, after 2008, those once-extraordinary export furniture companies encountered unprecedented challenges. Facing the decreasing orders, they had to start thinking about strategic shifts and set their sights on the domestic market.
So for furniture companies that are used to foreign markets, how to do well in the domestic market? The author believes that the first thing to do is to establish their own perfect domestic sales channels. The specific methods are as follows:
First, direct sales channels
The direct mode requires companies to have a huge talent system and financial strength to achieve precise management. Nowadays, domestic consumers are increasingly demanding personalized furniture. The orders placed by merchants are small and varied. This has led to the need for companies to produce a wide variety of furniture, which puts forward higher requirements for delivery, and often sends a wrong bedside cabinet, which will lead to the failure to deliver the entire order. However, when companies do direct sales channels, processing orders will be faster. Because the characteristics of domestic sales orders are small and numerous, unlike single sales orders, single products are mass produced.
The second is the dealer agency model
The advantage of this model is that it can quickly spread the sales network across the country with the help of dealers. This is also the channel model adopted by most domestic sales companies. This model has certain requirements for dealers, and most companies require that their business philosophy is consistent with the company's development philosophy. Moreover, companies must fight for some mature distributors who have many years of sales experience and have more local consumer resources and industry resources in order to have strong competitiveness. However, these mature distributors have been in the industry for many years, and their selection of products is very strict.
The third is to use third-party mature channels
The export model is to put it bluntly through the sales channels of large foreign buyers. On the domestic sales channel, if you are unwilling, or have no confidence to quickly develop your own independent channel, you can also use third-party channels to achieve sales. Although there are currently no relatively mature large buyers in China, the number one company occupies 99% of the industry's sales, and the other 99% companies compete for the other 1% of the market.
Fourth, e-commerce channels
When domestic companies are involved in e-commerce, how to deal with the interests of existing dealers becomes their first problem. On the contrary, the export-to-domestic enterprise can be said to start from scratch. Without the entanglement of those with vested interests, it is almost drawing on a blank sheet of paper, and overall planning can be made overall. At present, the use of the Internet by domestic furniture companies is still in its infancy. The network only undertakes functions such as brand building and shopping guide in the furniture industry, and even these functions are at a low level. For example, companies have only established their own homepages, but they have not updated their news. Even the homepages of many companies have not been updated for several years. Therefore, furniture e-commerce has unlimited potential, and as "post-80s" and "post-90s" become the main furniture consumer, e-commerce is gradually showing an upward trend.
Fifth, use upstream and downstream industry channels
In furniture stores and distributors, such a phenomenon has existed in recent years, and cooperation between different industries extends between upstream and downstream. For example, Red Star Macalline not only has furniture but also building materials. Even these stores have cooperated with Suning, Gome and other home appliance circulation giants to integrate into the same business district or jointly carry out some promotional activities, because consumers between them have a high degree of homogeneity. There are also many home appliance dealers who have begun to get involved in furniture distribution. They report that the share of home appliance sales in a certain area is already very high, and there is not much room for expansion, so they turn their attention to the related furniture industry because consumers are buying At the same time as home appliances, you may also need to buy furniture. Turning domestic furniture companies can find a breakthrough in these channels.
In addition, when exporting to domestic sales, the export market cannot be completely discarded. After all, it is an established bank and can use its experience in overseas markets to develop new export markets. In this process, we also need to recognize and pay attention to the following issues:
Recognize the reality: the fluctuation of export orders faces a second crisis
For export furniture companies, grasping the order quantity is a top priority in strategic planning. After three years ago, orders fell and orders recovered in 2009. By this year, orders have fallen sharply again. The second crisis has become a topic of concern. In the context of the complex and ever-changing macro environment, contracting strategies and reducing expenditures have become the consensus of all companies.
Taking Taisheng International Group as an example, as a leader in domestic furniture export enterprises, Taisheng International Group's every move has attracted much industry attention. According to the general manager of Taisheng, this year the export orders of Taisheng Group have been reduced by 40%, and the factory in Dalingshan, Dongguan, the largest export base of Chinese furniture, has dismantled a production line. It is understood that although the export orders of Taisheng are 40% less, the orders of export enterprises are still lower than others. Some enterprises have even reduced their orders by more than half.
Reasons for exploration: Why are export orders reduced?
On the one hand, rising prices have become an obstacle to Chinese furniture exports. "MadeinChina" has always been synonymous with low prices. Today, with the continuous rise of domestic labor costs and the continuous appreciation of the renminbi, the cost price of Chinese manufacturing continues to rise, while large foreign buyers strictly control the purchase price to ensure the price of their products. Advantage. In the face of the difficulty in raising purchase prices and the reality of rising manufacturing costs, some export companies dare not take orders. Because the profit of foreign orders is not high, generally only a profit rate of about 3%, and this profit rate is easily "swallowed" by the rising exchange rate.
On the other hand, the foreign economy has not really recovered. The unemployment rate in the United States has remained high, and the recent anti-Wall Street movement has expanded globally from the United States, making it difficult for foreign economies to recover in the short term. Therefore, in the face of the market status of continuous reduction of orders and rising manufacturing costs, Chinese furniture export companies must have sufficient cash reserves. Professor Guo Shiping believes that the current situation of manufacturing costs approaching the purchase price will force more and more export companies to find new markets to break through the price monopoly of large foreign buyers.
Putting it into action: opening up new markets for export and innovating new marketing methods
The export model with both ends makes the export enterprises lose their pricing power. The multiple pressures of rising labor costs, rising raw material prices, and the appreciation of the renminbi have caused most export enterprises to face life and death.
The first reaction of export companies after export is blocked is to look for emerging markets abroad. Some export companies "quench their thirst" with orders from developing countries such as the Middle East. In the search for emerging markets, the Middle East and Southeast Asia markets have become the focus of business development. Some resource-based countries and tourism economies in these regions are relatively less affected by the crisis, and the demand for civilian and office furniture is also greater.
In addition to looking for emerging markets, foreign furniture has also made changes in marketing methods. Two of these changes are worth noting:
One is to set up brand-operated stores abroad. Some enterprises recruit full-time staff locally, play their own brands, and open direct stores. This model directly gets rid of the control of large dealers and makes products meet consumers, but this model should cooperate with local personnel, such as the shareholding system or the agency model, otherwise the management cost is high and cultural differences are also difficult to overcome.
Work with some small dealers to spread the risk. If you only cooperate with a few large foreign buyers, the enterprise channel will be too single, making the risk too concentrated.
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