Yesterday, my neighbor didn’t know where to buy a "Sakura Air Conditioner". I happened to ran into it after get off work. He jokingly said, "Summer is almost over. It’s too late to buy an air conditioner." The neighbor smiled and said, "Use this year." In a few days, it will be available next year."
At the time of heavy rain in Beijing these days, the importance of air-conditioning is obviously not as important as the previous few days. There are not many people like neighbors who buy new air-conditioners. But for the first half of the year, how did the air-conditioning market perform? What tricks did the air-conditioning manufacturers that "rely on the sky for food" play this year? Does inventory pressure still exist? A series of problems have plagued friends who are concerned about the development of the air-conditioning industry.
According to industry online data, from January to May 2018, the domestic sales of the air-conditioning industry totaled 41.39 million units (+22.5%), and the total export volume was 33.32 million units (+6.2%). In other words, the sales of air conditioners in the first five months of 2018 were still good, showing an increasing trend, and there was a 618 big promotion in June, and the performance should be good. Therefore, it can be inferred that the air-conditioning market developed normally in the first half of 2018.
But at the same time, after experiencing the huge impact of high inventories on industry sales in 2015, the market is more concerned about high inventories. As of mid-July, the most direct consequence of the tepid peak season market is huge inventory. Industry insiders predict that the domestic inventory of air conditioners has exceeded 40 million units.
The reason is that, on the one hand, there is no favorable conditions for explosive growth in market demand. In 2017, the air-conditioning market has overdrafted future demand ahead of schedule. On the other hand, related industries represented by real estate are also unable to provide enough room for growth in air-conditioning products, and weather has become a crucial factor in determining the ultimate market trend.
In this regard, many friends in the industry are worried that the inventory backlog of the entire air-conditioning industry channel is serious, and they are very worried that there will be a price war in the market in the future. That's right, the air conditioner, Gree, had previously announced the "5.20 City Grab Gree" campaign, which opened the prelude to the promotional price war. It is understood that during the two days from 5.19 to 5.20, the event launched a discount of 7.7 percent to purchase 200,000 sets of special air conditioners. Subsequently, Midea launched 500,000 sets of air conditioners from 5.18 to 5.20 on the grounds of Midea Group’s 50th Anniversary, with the price as low as 30%. Many air-conditioning companies such as Oaks and Haier have also followed up.
Why do businesses cut prices so hard to fight a price war, then because of the scary inventory pressure. It is understood that in 2000, there were more than 400 Chinese air-conditioning brands, which can be called the heyday, but the direct consequence at that time was serious overcapacity. In order to seize market share and digest inventory, Gree, Midea and other air-conditioning brands formally kicked off the price war in the "bloodwashing industry" in 2000. By 2003, the number of air-conditioning brands had dropped to about 140. In 2004, the number of major active brands in the market was only about 50. In 2009, this number was reduced to 29. After 2012, there are only more than 10 brands that can hear the voice. . In 10 years, the elimination rate of air-conditioning brands has reached more than 90%.
But what made the industry worry about when the contract happened was that by this year, 2018, the brands in the air-conditioning industry have returned to 10 years ago, and the number of brands has risen to 200. Home appliance observer Liu Buchen said, "The air-conditioning industry may become the second color TV industry. The price war, which is nearly 1,000 yuan, will make air-conditioning profits lower and lower. Some small and medium-sized manufacturers with weak strength may be eliminated."
Is it worth investing in the World Cup?The World Cup will come to an end this weekend, leaving a first and second contest. Who will be optimistic about the final between France and Croatia? In fact, the sports marketing that the World Cup brings to the air-conditioning industry has also become the industry’s talk. Among them, Changhong and Hisense are two bolder companies, especially Hisense, which has always been very keen on sports events, but this year is a bit embarrassing.
Hisense’s confidence in the World Cup should come from last year’s European Cup. Hisense has tasted the sweetness of sports marketing and the effect is good. So he resolutely spent nearly 100 million U.S. dollars to become the official sponsor of the 2018 FIFA World Cup again, and commissioned Hisense to develop event video technology to enhance the audience's viewing experience.
According to Liu Hongxin, President of Hisense Group, this is the largest sports marketing activity in Hisense history. Moreover, according to Liang Zhenpeng, a senior home appliance IT industry analyst, he judged that Hisense spent 1 billion yuan on World Cup marketing, which is equivalent to Hisense's net profit of 942 million yuan in 2017. So the question is, is Hisense’s investment in the World Cup worth it?
According to a statistic, every 1% increase in brand awareness will cost US$20 million in advertising. With the help of sports events, the same cost can increase visibility by 10%. After sponsoring the World Cup this time, Hisense’s LOGO will appear on venue advertisements, tickets, news background boards, and live score pop-ups during the event. More than 200 countries around the world will see Hisense again through live broadcast signals.
However, this year Hisense appeared to be extremely low-key, and did not take advantage of it. Instead, it was surrounded by home appliance companies such as Huawei, Wanhe, Changhong Meiling, and TCL. Vantage’s promise of “the French team wins the championship and Vantage refunds the full amount†has become a topic of much concern on social media, especially Vantage, who ran away from dealers and continued to break through the French pair, entered the quarter-finals, and entered the semi-finals. Competing for the championship with Croatia has become the focus of the World Cup.
In contrast, Hisense has hardly any voice or topic, and with huge investment, Hisense’s market stimulating effect and public opinion effect are the smallest. In addition, there are some differences from the French team sponsored by Vantage. Belgium stopped in due course and reached the highest level of marketing.
Therefore, it has to be said that when companies spend huge sums of money in World Cup marketing, they still need to consider the effects and methods of delivery. As a brand that has always been based on technology, Hisense's failed World Cup marketing will more or less affect the development of the company, which is a big mistake.
Write at the endThe air-conditioning industry will not go smoothly in 2018. High inventory pressure will inevitably cause companies to panic, and companies with high investment and low returns like Hisense must plan carefully for the second half of the year. Of course, for consumers, after entering the off-season in the second half of the year, air-conditioning prices will usher in a turnaround, which is also the main way for companies to release inventory. Of course, strong and capable brands will still hold their heads up and take great strides forward, leading the direction of industry development.
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