Traditional Enterprises: A Realistic Opportunity To Break The Door To Upgrade Consumption

For China's traditional enterprises, it has missed the first express train of modern production.

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For example, in the prime of life, the Huajian shoe industry in Dongguan, Guangdong, once had 30 thousand employees, producing nearly 1000 products.

In the 10 kilometers around Huajian, there are more than ten thousand people.

There are also a large number of about 1000 people, so that Dongguan has become the manufacturing center of the global footwear industry.

There is no doubt that information technology, intelligence and industry 4 are the second express trains for Chinese enterprises. However, the price of this train ticket is not bad.

For most enterprises, export difficulties and weak domestic market make enterprises lack confidence in the modernization and intelligent pformation of huge capital investment. More enterprises are more willing and less capable to raise such huge funds, and it is more difficult to bear such a high cost of financing.

Against this background, for tens of millions of traditional enterprises, especially small and medium-sized enterprises, how to live well and live well under the background of economic slowdown and industrial restructuring has become the most concerned issue of traditional enterprises.

The author believes that for most enterprises, a more pragmatic opportunity to break the door is on the upgrading of consumption.

The so-called consumption escalation, as the name implies, is a higher level and more personalized demand for consumer products and services with the increase of consumers' ability to pay.

In fact, the above demand has been gradually squeezed off the shelves of scale, standardized and homogenized products.

Washing products

For example, in the past, Procter & Gamble, Unilever and several other brands dominate the world. Massive advertising is overwhelming, blocking consumers' vision and hearing and blocking all possible terminals.

From the consumers themselves, there is no money, no energy, no desire to choose more personalized products, so the mass washing products are popular. No matter what the most high-end shopping malls in Beijing or Shanghai, or the grocery stores in the countryside, we see the same Head and Shoulders and rejoice.

In recent years, with the upgrading of consumption, the situation is undergoing significant changes.

The latest report shows that P & G sales in China are declining at a higher percentage point.

Is there a problem with P & G's products or marketing? The answer is negative. Procter & Gamble CEO Lei Fu Li gave the reason: P & G misread the consumption pformation of the middle class in China, and was trapped in the middle of the market. As consumer demand became more and more high-end, the constant Procter and gamble was going downhill.

Such a large brand has been working in the Chinese market for decades, and faced with such an awkward situation.

In contrast, several new Korean brands (such as Laneige), which have been recognized in the Chinese market, have not entered the Chinese market for a long time. However, due to their precise positioning, they have been well matched with the personalized needs of Chinese consumers. Although the market has not invested much, their performance is against the trend and is very conspicuous.

Such a realistic case deserves our deep consideration.

As a result, we can take a look at the Swiss watch industry. Over the past several hundred years, the Swiss watch industry has maintained a good development.

In 2015, under the background of the global economic difficulties and the overall decline in the performance of the watch industry, the Swiss watch industry was not only stable but also growing.

The reason is that its unique positioning is its ability to satisfy high-end consumer demand.

The more than 30 mainstream brands of Swiss watches contain almost all the demand bands from the entry level of US $1000 to tens of thousands of dollars of high-end watches. This part of the consumer accounts for a small proportion of the total consumption of watches, but its consumption power is very strong. It is not affected by the economic environment. It will continue to replace, add and update higher level products with the increase of economic income. Although it is a niche market, it is a stable, high value-added and sustainable market.

It is a good grasp of the needs of this group and the trend of consumption upgrading. Swiss watches are likely to occupy a prominent position in the global watch market for a long time. Although they have experienced the impact of quartz watches, fashion watches, high-end electronic watches (such as iWatch, etc.), they can still sit on the bridge and admire the group.

In China, there are many traditional companies that have good reputation, unique technology and brand characteristics, such as: Wang Ma Zi scissors, rice village cake, and so on.

However, under the impact of industrialization, these enterprises once expanded rapidly, pursuing the scale effect, replacing the differentiated "workshop mode" with modern mass production, and also rushing to a higher level in a certain period of time.

However, the individuation of products disappeared, Seiko's work disappeared, and the perception of consumer experience disappeared.

Take a famous brand cake as an example. It was once an honorable gift that Beijing people had to bring to all parts of the country. It was also a hand letter bought by foreigners in Beijing. With the recall of it 40 years ago, the author bought a box of boutique as a refreshment for the Spring Festival. After opening it, he found that the outer bark of the pastry was hard to swallow and the filling was not fresh. It seemed to be the return of the old dim sum, and finally reluctantly eaten 1/3 and threw away 2/3.

For such an enterprise, the elimination of the market is probably a matter of time.

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With the upgrading of consumption, for these enterprises, it is time to calm down and think about their own direction of development. It is time to forget how many billions of people in the whole country and concentrate on catching hundreds of thousands, tens of thousands and thousands of customers.

China's King pock seems to be the king of the one billion people, but no one of the one billion people will spend thousands of yuan to buy a Wang Mazi. Zwilling does not serve every consumer, but its unique brand and quality attract a large number of Chinese consumers, and it costs thousands of yuan for the scissors kitchenware from Germany.

In this sense, the problem of supply side reform needs to be solved. It is precisely the problem that the upgrading of consumption can not be synchronized with the upgrading of production capacity.

Of course, to achieve this, a large number of enterprises need to abandon the strategy of scale and take the quality mode, and work hard in terms of technology, quality, customer experience and services, and take the development route of "century old shop". For a large number of Chinese enterprises, the economy has been developing rapidly for more than 30 years, and the market has been starving. The task of the enterprise has been to expand production capacity and fight concepts. Now it is not easy to make everyone calm down, slow down and concentrate on it.

However, the market tells us that your product is gradually being abandoned by high-end consumers just like the brilliant Procter and gamble of that year. For 90% of enterprises, it is the opportunity and the only choice to narrow the front line and focus on serving a specific market and customer group in an upgrading process.