As one of the larger production bases in China's electrical industry, Zhejiang has greatly improved its overall competitiveness in recent years. It has made great breakthroughs in market network construction, product independent research and development, brand image construction and management level. It has become a new army of China's electrician industry, and has emerged as a group of independent electrician brands represented by Zhengtai Electric, Delixi International Electrician and Hongyan Electric. However, due to the positioning reasons, most of these companies are taking the middle and low-end routes. They are winning by large quantities, and their profits and brand added value are relatively low. They are in a difficult situation in the current competition in the electrical industry. To this end, our reporter interviewed Gao Xiang, the director and deputy general manager of Zhejiang Zhengtai Construction Electric Co., Ltd., and asked him to conduct an in-depth analysis of the Zhejiang electrician enterprise group and how Zhejiang Electric Group can seek breakthroughs in the competition.
Five factors restrict the development of Zhejiang electrician enterprises
Reporter: As we all know, Zhejiang is one of the main production bases of China's electricians, but most companies perform very well in the market. What challenges do you think Zhejiang electric utilities are facing?
Gao Xiang: There are several factors that cause the slow development of most electrical companies in Zhejiang. First, the brand operation is weak. Zhejiang's unique regional industrial clusters and the amazing imitation ability of Zhejiang enterprises have promoted many electrician enterprises. Some of them are small in scale. Due to the limitations of their own resources, they have not formed their own marketing channels. They only do OEM for other brands and have no independent brands. Or no brand image, no good positioning for their own brand, brand image aging, low-end.
Second, the industry chain is hollow. Since 2000, due to many reasons, some electrical companies in Zhejiang (especially Wenzhou) have moved out of Shanghai and Jiangsu. The main reason is to get rid of the impression that Zhejiang's electrical products are generally positioned lower, and to improve products from the perspective of regional brands. Profit margins, although the company's spare parts will be purchased in Zhejiang in the short term, but in the long run, the upstream of the Zhejiang electrical industry chain will be weakened.
Third, the cost is high. In recent years, the price of copper and other related raw materials has risen. Zhejiang's electrician enterprises are under tremendous pressure. The profitability of enterprises has plummeted. The development strategy and development space of enterprises have been severely challenged and restricted.
Fourth, the industry is reshuffled soon. In the next 3-5 years, the brand will start large-scale centralized cleaning, the market competition threshold will increase, and with the emergence of new brands, the old brands will disappear, the market will continue to enlarge, but the market is increasingly standardized and clear. The market began to mature.
Fifth, the ability to innovate is insufficient. The vast majority of electrician enterprises in Zhejiang are in the middle and low-end position, with weak influence in the domestic market, and the risk of developing and promoting new products is high. Therefore, most of the electrical enterprise products in Zhejiang are in the stage of imitation and improvement.
Grasp five breakthrough points
Reporter: At present, the status quo of the survival of Zhejiang electrician enterprises is not optimistic. What do you think is the way to crack?
Gao Xiang: To break the development path of Zhejiang Electric, the industry positioning should be broken first. In this business trend of combing the brand and competing for strength, who will be the ear of the electrician industry? Zhejiang Electrician is thinking about it, Zhengtai Electric is also exploring. In the next few years, China's electrician market competition will be extremely cruel, and like other industries, the situation of “leftovers are kingsâ€. Judging from the current pattern, China's electrician brands should only retain 20-30, and only those companies with strong technical advantages and capital advantages and adhere to the brand line will laugh at the end. Therefore, Zhejiang Electrician Enterprise must make a breakthrough, to upgrade, to win in the industry reshuffle. Only in this way can we stand on the ground.
Second, the brand positioning should be broken. Re-segment the market from the perspective of enterprise marketing 4P, position it, cross the gap with other enterprises, improve the profitability of the enterprise, and let the enterprise have enough profit space to support the survival and development of the brand. Due to historical reasons, Zhejiang Electrician brand has a widespread phenomenon of brand image aging, and the gap with foreign brands is huge. At present, many brands are aware of these problems and are gradually improving. We need to strategically combine the three elements of brand image, brand network and brand promotion speed, reshape the brand image and reposition the brand. Brand repositioning is a systematic project that requires careful market research and planning, and the company itself must define the long-term interests and short-term benefits.
Third, product quality should be broken. The manufacturing technology level of Zhejiang Electrician Industry can be basically integrated with foreign countries. As long as the Zhejiang Electrician brand invests more in the mold manufacturing and injection molding equipment, and strictly controls the process and quality, it can make homogenous products with foreign brands. At present, many well-known foreign electrician brands are manufactured in Zhejiang ODM, which shows that Zhejiang Electrician has no technical problems. It is gratifying to note that at present, Zhejiang Electrician Company pays close attention to the functionality, safety and aesthetics of its products. Enterprises no longer reside in the low-end market, but continue to move closer to the high-end market and move closer to the brand.
Fourth, the development speed must be broken. In the next 3-5 years, it will be a key year for the electrician market. This industry will enter the stage of monopoly competition, and only those enterprises that can quickly adapt to market changes can survive and develop. To this end, Zhejiang Electrician Enterprises can give full play to its unique flexibility to rapidly develop the gap with the scale, market share and brand building of international electrician brands. It has won time and stage for the brand to fully participate in the more intense market competition in the next stage.
Fifth, the depth of the channel must be broken. With the continued development of China's economy, the capacity of the second and third-tier markets will gradually increase. Siemens, Tianji and other brands continue to increase investment in this market, engulf the second and third-tier markets, and domestic electrician brands are in the second level. The third-tier market is fierce, is it more concerned about the fourth-tier market? It can be predicted that in the next five years, it is unlikely that foreign brands will enter the fourth-tier market. In the next five years, the main goal of foreign brands is to compete with national brands in the second and third-tier cities. With the reduction of profits and the increase of marketing costs, Zhejiang electrician enterprises have shifted overseas. For example, some small and medium-sized electric enterprises in Wenzhou have begun to do some OEM production in Africa and Eastern Europe.
The development of the electrical industry has become increasingly standardized and rational today. The era of heroic heroes has ended. Instead, system marketing under the premise of long-term strategic planning requires our Zhejiang electrician enterprises to make a decision. The challenges facing the electrical industry in Zhejiang are enormous, but the challenges and opportunities coexist, the competition is unparalleled, the competition is natural, and the fittest survives. We believe that a number of outstanding Zhejiang electrician companies such as Zhengtai Electric will stand out.
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Five factors restrict the development of Zhejiang electrician enterprises
Reporter: As we all know, Zhejiang is one of the main production bases of China's electricians, but most companies perform very well in the market. What challenges do you think Zhejiang electric utilities are facing?
Gao Xiang: There are several factors that cause the slow development of most electrical companies in Zhejiang. First, the brand operation is weak. Zhejiang's unique regional industrial clusters and the amazing imitation ability of Zhejiang enterprises have promoted many electrician enterprises. Some of them are small in scale. Due to the limitations of their own resources, they have not formed their own marketing channels. They only do OEM for other brands and have no independent brands. Or no brand image, no good positioning for their own brand, brand image aging, low-end.
Second, the industry chain is hollow. Since 2000, due to many reasons, some electrical companies in Zhejiang (especially Wenzhou) have moved out of Shanghai and Jiangsu. The main reason is to get rid of the impression that Zhejiang's electrical products are generally positioned lower, and to improve products from the perspective of regional brands. Profit margins, although the company's spare parts will be purchased in Zhejiang in the short term, but in the long run, the upstream of the Zhejiang electrical industry chain will be weakened.
Third, the cost is high. In recent years, the price of copper and other related raw materials has risen. Zhejiang's electrician enterprises are under tremendous pressure. The profitability of enterprises has plummeted. The development strategy and development space of enterprises have been severely challenged and restricted.
Fourth, the industry is reshuffled soon. In the next 3-5 years, the brand will start large-scale centralized cleaning, the market competition threshold will increase, and with the emergence of new brands, the old brands will disappear, the market will continue to enlarge, but the market is increasingly standardized and clear. The market began to mature.
Fifth, the ability to innovate is insufficient. The vast majority of electrician enterprises in Zhejiang are in the middle and low-end position, with weak influence in the domestic market, and the risk of developing and promoting new products is high. Therefore, most of the electrical enterprise products in Zhejiang are in the stage of imitation and improvement.
Grasp five breakthrough points
Reporter: At present, the status quo of the survival of Zhejiang electrician enterprises is not optimistic. What do you think is the way to crack?
Gao Xiang: To break the development path of Zhejiang Electric, the industry positioning should be broken first. In this business trend of combing the brand and competing for strength, who will be the ear of the electrician industry? Zhejiang Electrician is thinking about it, Zhengtai Electric is also exploring. In the next few years, China's electrician market competition will be extremely cruel, and like other industries, the situation of “leftovers are kingsâ€. Judging from the current pattern, China's electrician brands should only retain 20-30, and only those companies with strong technical advantages and capital advantages and adhere to the brand line will laugh at the end. Therefore, Zhejiang Electrician Enterprise must make a breakthrough, to upgrade, to win in the industry reshuffle. Only in this way can we stand on the ground.
Second, the brand positioning should be broken. Re-segment the market from the perspective of enterprise marketing 4P, position it, cross the gap with other enterprises, improve the profitability of the enterprise, and let the enterprise have enough profit space to support the survival and development of the brand. Due to historical reasons, Zhejiang Electrician brand has a widespread phenomenon of brand image aging, and the gap with foreign brands is huge. At present, many brands are aware of these problems and are gradually improving. We need to strategically combine the three elements of brand image, brand network and brand promotion speed, reshape the brand image and reposition the brand. Brand repositioning is a systematic project that requires careful market research and planning, and the company itself must define the long-term interests and short-term benefits.
Third, product quality should be broken. The manufacturing technology level of Zhejiang Electrician Industry can be basically integrated with foreign countries. As long as the Zhejiang Electrician brand invests more in the mold manufacturing and injection molding equipment, and strictly controls the process and quality, it can make homogenous products with foreign brands. At present, many well-known foreign electrician brands are manufactured in Zhejiang ODM, which shows that Zhejiang Electrician has no technical problems. It is gratifying to note that at present, Zhejiang Electrician Company pays close attention to the functionality, safety and aesthetics of its products. Enterprises no longer reside in the low-end market, but continue to move closer to the high-end market and move closer to the brand.
Fourth, the development speed must be broken. In the next 3-5 years, it will be a key year for the electrician market. This industry will enter the stage of monopoly competition, and only those enterprises that can quickly adapt to market changes can survive and develop. To this end, Zhejiang Electrician Enterprises can give full play to its unique flexibility to rapidly develop the gap with the scale, market share and brand building of international electrician brands. It has won time and stage for the brand to fully participate in the more intense market competition in the next stage.
Fifth, the depth of the channel must be broken. With the continued development of China's economy, the capacity of the second and third-tier markets will gradually increase. Siemens, Tianji and other brands continue to increase investment in this market, engulf the second and third-tier markets, and domestic electrician brands are in the second level. The third-tier market is fierce, is it more concerned about the fourth-tier market? It can be predicted that in the next five years, it is unlikely that foreign brands will enter the fourth-tier market. In the next five years, the main goal of foreign brands is to compete with national brands in the second and third-tier cities. With the reduction of profits and the increase of marketing costs, Zhejiang electrician enterprises have shifted overseas. For example, some small and medium-sized electric enterprises in Wenzhou have begun to do some OEM production in Africa and Eastern Europe.
The development of the electrical industry has become increasingly standardized and rational today. The era of heroic heroes has ended. Instead, system marketing under the premise of long-term strategic planning requires our Zhejiang electrician enterprises to make a decision. The challenges facing the electrical industry in Zhejiang are enormous, but the challenges and opportunities coexist, the competition is unparalleled, the competition is natural, and the fittest survives. We believe that a number of outstanding Zhejiang electrician companies such as Zhengtai Electric will stand out.
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