Since the beginning of this year, domestic e-commerce platforms have generally set off a price war. In the consumption downturnPanfishIn the environment, low prices are more likely to attract consumers, but for businesses, it is a different picture.
A reporter from the interface recently visited Luoyang, Henan Province.PanfishIn the steel office furniture industry belt, a number of factory leaders who are undergoing e-commerce transformation gave their views.
One of the factories is currently operating on Taobao, pinduoduo and other domestic e-commerce platforms, as well as opening stores on cross-border e-commerce platforms such as Amazon. Due to the different competitive environment in different markets, they also feel many differences. The person in charge of the factory told Interface News that domestic e-commerce merchants mainly compete around "low prices", which is based on the platform's lack of attention to the protection of knowledge products.
The official said, for example, that a large number of imitations appeared on the platform soon after a newly developed product was launched in the store of his factory. These knockoffs can keep prices lower, or they will force their own products to lower prices.
"everyone blindly rolls at low prices, resulting in extremely compressed profit margins for merchants, and factories do not have the ability to invest in innovation in brands and products, so it is difficult to really complete the brand transformation." He said.
At present, with the decline of traditional foreign trade business, domestic clothing, furniture, daily necessities and other fields of OEM factories in the process of transformation to e-commerce, are facing similar problems. Due to overcapacity, the operation strategy of the platform is more inclined to please consumers, and there is a hidden rule in the operation of merchants: you don't want to do it, and there are plenty of people who are willing to do it. But behind this idea of "either you or he", there are also some crises lurking. In the long run, it is the consumers who will always be hurt.
The popularity of this awareness is directly related to the current situation of OEM factories, and Luoyang Shuangbin Office Furniture Company visited by Interface News is a typical representative.
Shuangbin previously mainly engaged in traditional foreign trade business, OEM production of steel office furniture. Since a few years ago, business has been very difficult, the factory does not have its own brand, product research and development capabilities are general, and need to go through the three-tier distributor network to get in touch with consumers, can not directly grasp the market and consumer information.
Around 2020, the factory decided to move towards branding and e-commerce, but they were faced with the question of "whether to roll low prices". After operating for a period of time, they realized that blindly low prices will not get the factory out of the difficult situation, and may eventually lead to a vicious circle of reducing the quality of products for the sake of low prices.
In the view of Zhao Liang, secretary-general of Zhengzhou Electronic Commerce Association, OEM factories, whether they are transforming domestic or cross-border e-commerce, must adhere to differentiation and branding, which will eventually bring value.
However, the OEM factory, which is already beset with difficulties, needs a more benign competitive environment to complete the value transformation.
In the difficult period of transformation, Shuangbin finally chose to get rid of the predicament of homogeneous competition and low price through branding and original product design and development. Yao Ting, vice president of marketing at Shuangbin, said that in this process, what businesses need most is to find a more inclusive market, and there is no cross-border e-commerce platform as overly inward as in China, which provides them with opportunities.
Yao Ting told Interface News that Shuangbin never applied for patents before becoming a cross-border e-commerce business in 2021, but he has applied for dozens of patents in recent years. Because of the better protection of intellectual property rights, the factory has also cooperated with foreign designers this year, and the newly designed products are expected to arrive in July.
Another factory, Xingdu, seeks differentiation competition with its own characteristics and advantages. In the Luoyang steel furniture industry belt, most factories start from steel lockers, and their products are more or less the same, while Xing all specializes in strong security steel furniture such as safes after the transformation, trying to find a breakthrough.
This kind of transformation also needs a good competitive environment and sufficient profit space. Before the transformation, many factories were still based on the mode of production and marketing, that is, they sold what they produced without taking into account the real needs of customers. But after the transformation, they put more resources and energy into tapping the needs of users and redesigning products. If the roll price is blindly low, the factory basically does not have the ability to invest in these two aspects.
Mao Xiangnan, vice president of marketing at Xindu, said that betting on the safe is also a bold attempt at the beginning of these years.
"three or five years ago, consumers generally bought safes to store valuables, but after joining Amazon, we learned from consumers that safes are gradually becoming more storage-oriented, so a whole new product has been developed." Mao Xiangnan said.
The new products developed by Xingdu have received positive feedback from the market and currently have an advantage in Amazon's related categories. In Mao Xiangnan's view, the transformation of OEM factories cannot be followed just because they see which products are selling well in the market. It takes three or four months from making a product to receiving feedback from users to mass production, and sometimes the dividend period for a product is over. The factory should make itself a "gust of wind" by improving its R & D capability and change the market situation.
Various attempts have also made positive progress in the transformation of Luoyang steel furniture industry belt. According to Amazon, the sales of Luoyang steel furniture industry belt on the platform have accounted for 80% of the national share, breaking the stereotype that the industrial belt is concentrated in eastern and southern China.
"it's not that our products don't work, but we need a more suitable competitive environment. Only when the competitive environment becomes better, can R & D have sustainability, vitality, and go further. " Hu Yunliang, chairman of Kefeiya, told Interface News that although the road to independent innovation is difficult, it cannot be stopped.
Kefia has designed a lot of good products before, but because of the small number of customers, there are a lot of problems in factory production efficiency and quality control. After entering the cross-border e-commerce platform last year, they re-sold many of the products designed five years ago and achieved very good results.
After opening up the market with original design products, the company also has a new direction: expanding steel office furniture from the office scene to the family scene. In the exhibition hall of the Kefeiya factory, the interface news reporter saw that the design style of its family scene products is more in line with the modern minimalist style that young people like, while emphasizing zero formaldehyde.
With the blessing of product design ability, the market competitiveness of these OEM factories is also improving rapidly. Interface News learned from Amazon that the proportion of brands and factories in Amazon continues to increase, especially in the top 100 sellers.
With enough profits, Kefia plans to invest more money in infrastructure. According to Hu Yunliang's plan, Kefeiya will also build a 100-mu intelligent factory, which will meet the standards suitable for young people's life and entertainment and attract more high-end talents to the factory.
The heads of a number of factories visited by Interface News also expressed the hope that domestic e-commerce platforms can gradually respect and protect the intellectual property rights of merchants, so that merchants will be able to develop new products only if they have greater profit margins.
