White electricity is a classification relative to black electricity, referring to household appliances such as refrigerators, air conditioners, and washing machines. A distinctive feature of the white electricity industry is its high gross profit margin. For example, on behalf of the company Gree, the United States, Haier three giants, the overall gross profit margin has exceeded 30%. Among them, Gree air-conditioning business has a gross profit margin of 38% in 2017, which is the holder of many years of records. What is curious is that there seems to be no Internet company that can break the high gross profit margin of white electricity. Even Xiaomi, who is about to go public in Hong Kong, has not successfully disrupted the white power industry. What is the actual cause?
Beginning in 2009, due to favorable policies such as “home appliances going to the countryside†and the booming development of real estate, the white electricity industry entered the golden age. After the industry shuffled, the three brands of Gree, Midea and Haier took the leading position and were underdeveloped. In the remote towns and towns, you can see the offline stores of these three brands. The white electricity industry has formed a mature system from product development to supply chain to sales channels. For any Internet company that may be struggling across borders, the traditional giants will not easily cede the power of life and death.
In December 2014, Xiaomi, who was in the middle of the day, invested 1.2 billion yuan in the United States, accounting for 1.2% of the shares, jointly launched a smart air conditioner. It can realize functions such as "one-button operation" and "one-hand control". Can also connect the millet bracelet, set the home automatically after the start, sleep after the automatic sleep mode, priced at 3099 yuan. In the inverter air conditioner of the same configuration standard, compared with other series products of the United States, it does not reflect the cost performance advantage, even more expensive than other brands for hundreds of dollars, and the final market response is flat. At that time, Dong Mingzhu and Xiaomi and Mei were "two swindlers". It should not be for the eyes, but because the industry is too thorough.
In August 2017, Xiaomi Eco-chain Enterprise Zhimi launched air-conditioning products. The curved evaporator was also eliminated from technology a few years ago. It is priced at 4,399 yuan. It has no competitive advantage except for the MUJI-style design. Lei Jun did not stand for this product, or even allowed to enter Xiaomi Mall, the high probability is because it does not meet Xiaomi's pricing strategy.
The root cause of the two losses is that Xiaomi cannot participate in the procurement and production of components independently. There is no right to speak in the supply chain, and the technical black box of the industry cannot be opened. The core technology of air-conditioning is in the hands of the beautiful factory and Changhong, and it is difficult for Xiaomi to have pricing power in front of the traditional giants.
The high gross profit margin of the white electricity industry is essentially due to the information asymmetry between the supply and demand sides, especially the technical parameters of the core component compressor. Manufacturers can produce a variety of models, so that users who do not know how to understand can not be distinguished.
In fact, the white power industry has its own unique technical barriers to ensure that the industry's high gross profit margin cannot be easily broken. Although the working principle of white goods is very simple, component assembly and production is relatively easy, but there are still some gaps between domestic and world leading level in some core components, especially the compressors of refrigeration systems.
The compressor is equivalent to the CPU of the mobile phone. The engine of the car is called the "heart" of the white electric product. The larger the value, the better the performance. At present, Gree independently developed a compressor with a maximum rated efficiency ratio of 6.3. The Japanese entry standard ten years ago was that the compressor's energy efficiency ratio reached 5 or more. In 1983, China began to introduce compressor production technology and equipment from Japan. This is also the weakness of China's entire white power industry, and it is still the direction that the national industry is working hard.
In recent years, white power companies have also tried to upgrade their products to provide services through the Internet. Taking smart refrigerators as an example, you can analyze food data, provide e-commerce services, or intervene in the health care field through “nutrition analysisâ€. But the ability behind this, regardless of user operations or artificial intelligence, white power companies are far from available. All major manufacturers have developed a mobile phone terminal, and the effect is very poor. Ultimately, white power companies are unlikely to transform the Internet from traditional manufacturing.
In fact, the best-selling products on the market today are traditional hardware that does not have any intelligent features. This is closely related to the usage scenarios of white goods. The main consumption scene of white goods is the renovation of new homes and consumption on a household basis. The distinguishing feature is that the frequency of replacement is particularly low. The design life of white goods is mostly around ten years. Low frequency purchase and high cost replacement have determined that white goods cannot be as small and profitable as the mobile phone industry.
At the same time, China's consumption structure is changing. According to data from the Ministry of Civil Affairs, there are at least 200 million single people in China. The white goods are generally home users, and the single population, especially the large population in the big cities, will not buy large household appliances in rented houses. By raising the brand premium to ensure high gross profit margin, Baidian products can achieve “three years without opening, opening for three yearsâ€.
Therefore, the development of the white electricity industry is mature, the market structure is stable, and the intelligent transformation of the industry is still difficult. It is also difficult for Internet spoilers to go deep into the supply chain and not be able to break down technical barriers in a short period of time. Naturally, they cannot grasp the pricing power. Coupled with the user scene of white goods, to some extent attached to the home improvement industry, the characteristics of buying low frequency require the enterprise to earn enough at one time. All of these have determined that Internet companies cannot successfully transform the white electricity industry, even if Xiaomi cannot enter.
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