Small And Medium Enterprises That Rely On Distributors Will Only Be Eliminated.

GREE plans to invest 1 billion in the medical industry! BYD is the world's top producer of masks. Foxconn has opened the mask production line. A series of news has broken out, making the masks which were not valued in the past become instant "hard currency" in the market.

Now, the new force of masks is not busy. Wuling, BYD, Foxconn, OPPO, vivo, Haier, Mei and GREE are coming in.

Knowing and taking notes from an industry data analysis shows that there are about 2000 manufacturers of masks in the country, but most of them are small and medium-sized enterprises, and 100 thousand masks of Nissan are big factories. Faced with the new force of a new mask in the market of medical consumables, do these enterprises own their own moat? Is this market like an undefended city, which is hard to stop the destruction of new forces?

The answer is obvious.

What brand is your respirator?

"What brand is your mask?" most people are afraid to answer this question except for a few people who buy brand masks such as 3M and Honeywell. Because there are so many brands and models of masks, they can be used well when there is a lack of market supply.

But with GREE's 5.5 yuan KN95 mask sold online, Dong Mingzhu called out "good mask, GREE made", a mask dealer knew to note that the real catfish came, and those traditional masks companies that were still ignoring the brand will pay their bills for their brands.

When you understand your notes, you communicate with the owner of a mask factory on brand power. You feel that both sides are not on one channel:

"What consumers are the masks sold to?"

"It's all dealers. Selling to individuals is not enough for me."

"Is the mask brand yours?"

"What brand, ah, now can work hard, every day overtime production."

"Have you done any brand marketing?"

"Putting the market on the market is very important. We should do well in the dealership, and now we need to sell the mask."

Chen Hongyan, Secretary General of the China Medical Supplies Association medical equipment branch, as a personage in the industry, is unable to do anything for the traditional mask enterprise. Because the scale of traditional masks is small and the quality of bosses is not high. When it comes to brand building, it seems to them that they spend money on buying and selling.

"This epidemic situation is a good image publicity for the mask enterprises. If the enterprise is committed to brand promotion, no matter which hospital you are going to provide full face masks to, or the centralized supply of courier brothers or community workers, it will always have some impact on the market, but none of them seems to have this awareness." Chen Hongyan said regretfully.

The brand limitation of this mask enterprise is that, under the highly homogenized competition, the manufacturers do not directly contact with consumers, but pass through layers of distributors, resulting in the brand of the mask is gone, and the enterprises have no intention to build a brand moat.

In contrast, the new force of masks, although these enterprises have built or reconstructed their own production lines in a short time, some have not even obtained the relevant medical licensing qualification, and can only produce the most common civilian respirators, but they have done enough work in corporate social responsibility and market publicity.

"What the people want, what Wuling makes!" SAIC GM Wuling's slogan was launched before the mask went off the line.

In terms of the size of the mask, Wuling chose a disposable respirator. The mask is relatively simple in production process, and it is also the largest demand. Every masks are clearly marked with Wuling logo.

The establishment of corporate brand has long been a bad story. However, in the mask industry, it seems that no one wants to drink this bowl of chicken soup. China produces more than 50% of the global mask, but there are few Chinese companies in the global masks list.

It is for this reason that the new force of the masks will find that the market acceptance is very high after they bring the brand power into the market, and the market and the channel can be opened quickly when the demand is high. BYD even launched its own mask on its official mall. Only the certified car owners used integral exchange, and hit a beautiful brand marketing card.

On the one hand is the dealer mode, which makes the traditional mask manufacturers lack the power of brand building. On the other hand, the supply and demand of the market are balanced for many years. As long as we do well in the channel relationship, whether they are their own products or OEM production, they can make the enterprise earn money. Who is willing to do the unknown brand investment?

"Mask companies have been in the warm water for too long." Chen Hongyan thinks that at present, the most traditional mask business is still thinking about how to expand production to earn money, not how to expand the social and brand impact of enterprises.

New force of masks encroach on upstream and downstream

When the moat of the brand is nominal, the only way to stop the new market entrants is the product technology and the upstream and downstream industry chain. However, for mask production, its technical content is close to zero in the eyes of household appliances and car companies.

Wuling uses 10 days to complete the transformation of mask production capacity. It is estimated that Nissan will be able to produce 1 million units, and BYD will use less time. It only takes 9 days, and it is estimated that Nissan will reach 5 million.

The disposable respirator consists of three layers of cloth: the outer layer is the non-woven fabric which isolates the external liquid; the middle layer is the melt blown fabric for isolating and filtering the virus; the inner layer is the non-woven fabric with skin care and sweat absorption. In addition, the accessories of the respirator are the hangers and metal layers. Compared with the large industrial products such as automobiles made up of thousands of components, it is not difficult for them to produce masks.

With machine equipment and a clean standard workshop, it is possible to produce masks at full capacity. It is an important upstream raw material meltblown mask, which hinder the productivity explosion of new masks.

It is precisely because of the large scale of the downstream masks manufacturing enterprises to resume work and expand production capacity, resulting in the price of melt blown cloth rising or rising, and even requiring the government to intervene in market prices and crack down on scalping up prices.

There are also traditional masks manufacturing enterprises to understand the notes and complain, some new masks force their suppliers of melted spray cloth, breaking their way of financing, not only disrupt the market, but also play a more competitive role in the market.

The complaint is not out of thin air. Because of the insufficient supply of melt spraying cloth, BYD launched all the staff to find the source of melted cloth. In this case, only the high price can win the supplier.

What is even worse is that the production capacity of traditional mask manufacturers is generally around 100 thousand Nissan, and only a few such as green shield and robust enterprises have scale advantages. The new force of masks is the Nissan million mask, regardless of the upstream bargaining power or the enterprise's own strength, which is far more powerful than the traditional mask business.

A medical device dealer told us to understand notes. Currently, masks on the market are mainly the supply sources of traditional enterprises, and those emerging masks have less supply. Because the dealer channels of traditional mask enterprises are relatively stable, and the new power of the mask has not yet come up. The channel is also mainly internal digestion and online sales. At present, the two sides still do not make river water.

However, this balance is very fragile. The Jiangxi 3L company, which understands the notes and understands the qualification of KN95 medical masks, is in IPO. Its prospectus shows that the gross profit margin of Jiangxi 3L's mask is only 9 cents, but its gross margin is 35%.

While BYD's gross profit margin in 2018 was 16.4%, GREE's gross margin was relatively high, but it was only 30.2%.

Whether it's production capacity or the strength of the enterprise itself, the new force of masks has the strength to occupy the upstream and downstream of masks, but their masks are focused on social responsibility, and they often go over distributors to demand units, rather than selling profits.

　　 Straw that overwhelms the mask industry: quality

It is not just large manufacturing enterprises that see the business opportunities of masks. There are more small businesses and individuals who want to get a share. A business minded person will consider a mask factory. Policy encourages the approval of relevant certificates. It is very convenient to buy and sell raw materials and machines.

As for sales, now that you have goods on the market, can you not worry about it?

Such small workshop type mask production enterprises are not few, but their capacity is only tens of thousands per day, which has little impact on the market. With the rising price of raw materials and the tight use of masks, some small and medium-sized enterprises have found that they only need to sell the machines and materials they bought, so that they can earn a lot of money.

Such a phenomenon also proves the confusion of the mask market. Although the mask has its own quality national standard, this standard is only limited to the identification of counterfeit and shoddy masks after a variety of mask styles and various OEM production.

Li Chen, who has been engaged in medical device distribution for many years, understands and understands notes. Currently, there are distributors, personal relations networks, electric providers, etc. in the sales channels of masks. Everyone is in the state of taking money and other goods. In the end, whether the mask provided by the enterprise is produced or OEM is difficult to distinguish. Even some production enterprises purchase goods from abroad, sell them out and make dealers themselves.

Friends who know how to take notes have bought suspected foreign masks and fake products. He bought them through a micro dealer called Korean brand masks, but they feel very depressed after wearing them, and their respirations are very poor. He searched the Internet for a long time, and could not find out the authenticity of the mask. He could only admit his bad luck.

It is precisely because of the interests of the first, so that the mask and the flow of masks into the market rushing to the market, but also let people buy the mask quality has deep doubts. And this worry is broken, on the one hand is the supervision department's anti-counterfeiting, on the other hand is the enterprise carries on the guard against false to the mask.

Unfortunately, in addition to a few enterprises such as 3M, it will enable consumers to quickly distinguish the authenticity of masks by means of computer laser marking. Most domestic mask manufacturers do not carry out relevant anti-counterfeiting and labeling products, or even their own brands are just a representative factory. After all, even the traditional mask companies that save LOGO on masks don't care about others' counterfeiting.

But is this really going on? With the demand for masks and the productivity of new masks, the supply of masks will not be far enough to meet demand or even oversupply. At this time, people will not be hungry for the mask market, and the quality of masks will eventually become the watershed of the industry.

When the slogan "good mask, GREE made" was put forward, it indicated that the new force of the mask would use the reputation of the word of mouth, stirring the mask water.

Brand competition, however, is only a matter of competition in scale of production, but not in the quality of products. It is hard to imagine the future of traditional masks. They can only hope that the new motivation of masks will be motivated by social responsibility, rather than focusing on the mosquito meat.

Although the gross margin of masks is not low, the overall size of the industry is not large. AI media consulting statistics show that in 2019, China's mask industry output value reached 10 billion 200 million yuan, while GREE Electric's net profit in the first half of 2019 reached 13 billion 700 million yuan.

Dong Mingzhu dabbled in a wide range, before investing heavily in the new energy industry, but also investing in the chip industry. As a low tech industry, masks are really small for GREE. But if the mask is used as an opportunity to cut into the medical supplies and medical devices industry, the mask that is closely related to the people's livelihood is a good touchstone.

[concluding remarks]

During the epidemic this year, a large number of upstream and downstream enterprises in the masks industry increased production and output, and the newly entered manufacturing enterprises also stimulated the development of China's mask industry. With the control of the epidemic situation, the excess mask production capacity will be faced with a big adjustment, and the pattern of small and medium-sized enterprises will soon be broken.

Dong Mingzhu can only see the sale of masks, the production costs of the current mask, GREE masks do not make money, but "Dong Mingzhu shop" has just started 500 thousand people a day appointment, even now the number of appointments per day more than 300 thousand people, the "mask marketing" brought exposure and influence, to ensure that Dong Mingzhu and GREE brand can earn a full pot.

Compared with the large manufacturing enterprises, such as automobiles, home appliances and so on, who know brand marketing and word of mouth, the traditional mask enterprises have not come out of the small workshop production in the past, and they earn all the hard money of each mask. When more manufacturing bigwigs think of the Internet, they can get involved in masks and other medical products related to people's livelihood. These are still alive in the last century, and the small and medium enterprises that rely on distributors will only be eliminated.