Abstract In just two years, the "Internet thinking" and "online channels" that were once regarded as creed in the mobile phone industry have now been completely overthrown. Xiaomi founder Lei Jun is silent than before. In addition to Xiaomi's own press conference, he rarely made a speech in other public places. Even if...
In just two years, the "Internet thinking" and "e-commerce online channels" that were once regarded as creed in the mobile phone industry have now been completely overthrown. Xiaomi founder Lei Jun is silent than before. In addition to Xiaomi's own press conference, he rarely made a speech in other public places. Even if it is a public speech, I have never mentioned the Xiaomi mobile phone.
In the second quarter of 2016, IDC data showed that millet shipments fell by 38% compared to the same period last year, a drop of 38%. However, I have always been marketing in China's third- and fourth-tier cities, and I have implanted variety shows. I have never mentioned Internet thinking. OPPO and VIVO, which are not trendy enough in the industry, have surpassed Xiaomi and become the second and third largest smartphone shipments in China. Mobile phone manufacturers.
Whether it is Huawei, Meizu, or other mobile phone manufacturers, they are studying the OPPO and VIVO models, including offline channels, brand marketing, and even what kind of celebrity spokespersons, and what variety shows.
Why is this dramatic change happening? In the past few years, have you been wrong with the "internet thinking" and "online channels" that everyone believes in?
Awkward "Internet mode"
Beginning in 2015, the entire smartphone industry has begun to enter the speed bump. According to IDC data, China's smartphone shipments reached 434.1 million units in 2015, up 2.5% year-on-year. In 2014, this figure was 21.9%, and the growth rate slowed down noticeably. IDC also expects that China's mobile phone shipment growth this year may be a cliff-like decline.
More critical is a data from research firm GFK: China's smartphone sales accounted for 20% to 25% of total e-commerce sales between 2015 and 2016, and this figure was stable at around 22% in the first quarter of 2016. In other words, the growth of online channels has stabilized, and 80% of offline channels will become the mainstream sales channel.
This makes Xiaomi's "Internet model", which emphasizes online sales and goes to the middle of the channel, is in an extremely embarrassing position.
"Offline channel"
The important reason why OPPO and VIVO are successful is the huge offline network. When Xiaomi talked about the Internet model and went to the middle of the channel, OPPO and VIVO were using their huge agent model to penetrate the 3rd, 4th and 5th tier cities. The person in charge of the VIVO market said that VIVO has a higher proportion of offline channels. Liu Lei, OPPO's public relations director, said that OPPO handsets sold on the Internet channel accounted for only 5% of total shipments.
After using Samsung and Nokia to make good use of state agents to buy goods, the form of downward distribution is different. OPPO adopts “separation systemâ€: it has 36 exclusive provincial agents in the country, and manufacturers only supply these agents. Then, the first-level agent will sink to the second-level and third-level agents. "How to sell after the goods are finished is their business, and the training and salary of the store guides are all responsible by the agents themselves, and they are responsible for their own profits," said Liu Lei, OPPO's public relations director.
The multi-layered agent distribution system needs to leave enough profit margin for each level of dealers, and the other party has the power to sell mobile phones. A mobile phone manufacturer made an estimate for the reporter: OPPO R9's material cost is about 1,500 yuan to 1,600 yuan, but the final price is 2,799 yuan, of which profit margin is enough.
The rebates given to agents by OPPO and VIVO are indeed high in the industry, between 5% and 10%. Many mobile phone industry people told reporters that OPPO shopping guides are the most active in the store, the reward for selling a mobile phone is very high, and the sales champion will reward the car. A mobile phone channel told reporters, "If you can be an agent of OPPO, you are lying down and making money."
Of the 200,000 sales outlets under the OPPO line, 10% are attributed to the operator channel, and the remaining 90% are agent channel outlets. "For more than ten years, the long-term trust relationship and OPPO have a solid foundation." Liu Lei said that some provincial agents were the earliest OPPO suppliers and early employees, so they also enjoyed OPPO shares. Trust relationships are difficult for other vendors to imitate in a short time.
When online sales growth slowed down, OPPO and VIVO established an offline sales network for more than ten years, which provided them with strong follow-up support. After Xiaomi Weiwei, shipments surpassed Xiaomi in one fell swoop, and forced Huawei.
China's abrasives industry industry channel dispute
Although the scale and output value of China's abrasives industry are very different from those of the smartphone industry, the problems faced by the two are similar.
Since 2013, the development of China's abrasives industry has entered the speed bump belt, and the homogenization of products has been serious. Enterprises have begun to compete to open low-price competition models. In order to further reduce the price of the products, some enterprises began to play the "Internet thinking" and "e-commerce online channels" and other ideas. The most radical concept is: like Xiaomi, through the Internet e-commerce platform, completely eliminate the traditional dealer offline channels, remove all advertising expenses such as advertising and marketing, and enter a low-cost sales model close to cost.
The negative effect of this low-cost sales model close to the cost price is obvious. Enterprises approaching cost-selling products and lacking sufficient profit margins make it difficult for companies to enter a benign development channel: there is not enough money to develop new products, open up new fields, and hire no more advanced talents. The rapid rise and decline of Xiaomi Company in less than two years just proves the unsustainability of this model.
China's superhard materials network Xiaobian believes: In order to develop with the trend, it is important for abrasives and abrasives companies to develop their own e-commerce platform and online channels, but strive to improve product quality and technical level, increase the added value of products, and be traditional offline. Injecting new vitality into the channel is the safer and more solid choice for the abrasives industry. And those companies that want to use the "Internet model" to dump low-quality products and compete for vicious prices are more like a sand, do not use the wind, and they will not be able to walk two steps.
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