How does Hisense control the future when he builds a car with his left hand and goes to sea with his right hand?

If Hisense can get out of the sea, what should he trade for the user’s “trust”?

How does Hisense control the future when he builds a car with his left hand and goes to sea with his right hand?

In overseas markets, Hisense uses sports marketing to “build ships to sea”, which not only stirs the pool water and promotes the development of the domestic home appliance industry, but also step by step toward the ranks of world-class brands.

In the domestic market, under the correct consensus of the industry, while Hisense has invested in scene-based deepening of home IoT, it is also actively deploying in the field of new energy vehicles and exploring the second growth curve.

In the context of the home appliance market entering the era of stock, in the face of growth pressure, Hisense is seeking new growth space in various fields. New opportunities also mean new challenges. It is more hard power to take the wind and rise to the test. Can the catfish of Hisense home appliances go deep into the pool and stir the industry?

Hisense’s entry into car manufacturing can’t solve the development anxiety in the era of stock competition?

When the home appliance industry enters the stock market, insufficient domestic demand leads to slow growth. Enterprises continue to seek new growth engines, and making cars is a good choice. 

New energy vehicles have become a prospective consensus, which not only contains huge commercial value, but can also quickly increase the market value. For example, the market value of Evergrande, which does not have mass-produced vehicles, far exceeds its main business, Evergrande Real Estate. For the home appliance industry, the new energy automobile industry chain has been quite complete under the efforts of Tesla and the “Three Musketeers”, and it is a good time to cut in. 

Hisense’s entry point for making cars is to be a supplier of automobiles, mainly deploying vehicle-road coordination, intelligent cockpit, and vehicle thermal management. Instead of building a car but choosing to be a supplier, it is in line with the positioning of home appliance companies that it is better to be second. 

Having an independent and complete supply chain system is the core advantage of traditional home appliance companies against Internet companies. The concept of “concepts first and light assets” of Internet companies is difficult to penetrate too much in areas involving heavy assets. 

Small profits but quick turnover, creating new concepts, and “touching porcelain” are the three cross-border axes of Internet companies. However, in the home appliance industry, small profits but quick turnover will eventually encounter a situation where the more they sell, the greater the loss. At the same time, the price of a single product is too high. Gao also makes consumers choose traditional home appliances with visible strength instead of Internet companies with a pioneering concept. 

However, heavy assets are good, but their own genes also restrict development. In terms of corporate culture and corporate management concepts, it is difficult for traditional home appliance companies to keep up with the thinking of Internet companies. For example, in the field of new energy vehicles, home appliance companies are tacitly aiming at the automotive supply chain, taking advantage of their own supply chain to become suppliers of the “car-making” industry chain, instead of building cars in person, like Skyworth did. Very few. 

Choosing to become a service provider also means losing the dominance in car manufacturing, and a series of measures are subject to major car manufacturers. Therefore, if cross-border home appliance companies want to gain more voice, they must have a more mature supply chain than their peers.

Midea also has a layout in “making cars”, and the fields involved are highly overlapped with Hisense. Midea, which focuses on small home appliances, has a more flexible supply chain system than Hisense in terms of transformation, and Midea’s strength is higher than Hisense. Hisense does not seem to have much advantage in supply chain or funding. 

In addition to Midea, Haier has cooperated with Chery and SAIC to enter the field of “car making”, Gree and Zhuhai Yinlong also have a more in-depth cooperation, and home appliance companies have coincidentally cross-border “car making”. 

In essence, home appliance companies that obtain car-making tickets with the supply chain system are “translations” of the supply chain. Regardless of the influence of different external factors, the market pattern of cross-border “car-making” home appliance companies in the car-making field is likely to be a repetition of the market pattern of home appliance companies. 

Therefore, Hisense’s entry into the game to “build cars” may be just a conventional strategic defense, following the development of the industry. Under the wave of big-name companies such as Midea and Gree devoting themselves to car manufacturing, we will do what you have, and we will also plan for the interconnection of smart cars and smart homes. It is not easy for Hisense to build a second growth curve through “car building” to achieve full overtaking, or even very difficult.

Different from the home appliance industry, complete products can “conquer” consumers to gain a certain market share through differentiated features such as concepts and corporate culture. For example, in the air-conditioning field, although Gree is the big brother, Hisense has also opened up some markets through fresh air air-conditioning. 

But in the field of new energy repairer, service providers do not need to be that consumers know the brand name of the word “parts.” Suppliers of more mature “parts” in the industrial chain tend to quickly emerge as the leading enterprises, and the Matthew effect in the industry is obvious. 

Moreover, crossover also means that the industry advantage has been lost, and there are already a large number of mature companies in the field of auto service providers. For example, in the automotive air-conditioning market, Denso and Halla have long occupied a certain market share. 

The home appliance industry has come across borders, and it is still unknown whether it can run out. Hisense’s “car building” may be severely squeezed by new and old forces, and may even risk being eliminated.

With family scenes, what should Hisense do under the “birdcage effect”?

Compared with the deployment of new energy vehicles, Hisense’s layout in the home appliance industry is more feasible. 

The domestic market is under pressure and turned to overseas to seek new growth points. Domestic companies have tried unsuccessfully. Sponsoring world events such as the World Cup for sports marketing has been Hisense’s main marketing method in recent years. 

The scale of revenue has increased, but the year-on-year growth rate has continued to decline. This is Hisense’s current predicament. In 2020, Hisense’s net profit for home appliances will decline by 11.97%. The domestic market is weak. It is a good thing to seek foreign growth through the sports marketing of international events, but this year Hisense’s sports marketing may have some effect, which may be a big question mark. 

The foreign epidemic situation has not been well controlled, and the impact of the epidemic situation in foreign markets will only become more severe. According to AVC data, the scale of China’s home appliance retail market in 2020 will drop by 11.3% year-on-year. Among the traditional large appliances, the scale of air-conditioning has the largest decline, reaching 14.8%. Except for the factors that the domestic home appliance industry is moving towards stock competition, the impact of the epidemic on the home appliance industry is very obvious. 

With reference to China, according to the latest financial report, Hisense’s net profit in the first quarter of 2021 reached 218 million, a year-on-year increase of 400.66%, and the net profit growth rate exceeded 4 times. Although the 4x strike is not accurate, it can also be used as a reference. 

The core of sports marketing is to enhance brand image and increase brand exposure, which is not a direct conversion marketing method. Although the popularity of international events such as the World Cup can be greatly improved, the foreign epidemic has not yet been controlled, and the shopping needs of overseas consumers are suppressed, and the conversion rate will naturally decline. 

Moreover, moving overseas through sports marketing is not a long-term solution, nor can it be a moat. After other brands exert their power, Hisense’s advantages may no longer be obvious. For example, Vantage’s stealing the limelight incident, home IoT is the consensus and correctness of the home appliance industry. 

In the context of the stock competition in the home appliance market, the success of a single explosive product has been unable to drive the overall growth of the enterprise, and only the scenario with the “carrying” effect of the birdcage effect can provide a large amount of growth for the enterprise.

The birdcage effect is a well-known psychological phenomenon. Generally speaking, when a person obtains an item, he will add more things that were previously closed around the item. This effect is also applicable in the home appliance industry. 

Home appliances are closely related to home furnishings, and the tone of appearance greatly affects the decoration style of a family. At the same time able to communicate with each other furniture to meet the consumer about the future of smart home living life Imagine the scene of further reducing the cost to consumers to consider with respect appliances. 

For enterprises, the overall structure paradigm can be effectively increased through the single product. For example, if you buy a refrigerator of a certain brand, under the consideration of sunk costs, although other products are not attractive, you may choose the whole set of products of the brand.

From a long-term perspective, home appliance companies are not only able to grab more consumers in the stock market, but also passively defend. The manufacturing industry has gradually matured, and the technical barriers between industries have been greatly reduced, which is very beneficial to Internet companies with increasingly blurred boundaries. When the independent and complete industrial chain advantage of traditional home appliance companies no longer exists, the outcome of Internet companies entering the home appliance industry may be another. 

However, although the prospect of a single product driving the overall situation is attractive, in the highly competitive home appliance industry, involution makes a single explosive product attract users, and multiple explosive products can maximize the reduction of consumers’ consideration costs. And a single explosive product itself has the risk of affecting the whole body, and consumers are likely to abandon the entire scene-based product because of dissatisfaction with it. 

Therefore, for home appliance companies. Obtaining user awareness through full category coverage, and creating a variety of explosive products to increase the bond between products may be the ultimate way out. Otherwise, they can only become a module provider under the scene of Internet companies and lose industry leadership.

Ideals are beautiful, and reality is cruel. Gree, Midea, Haier and Hisense are all committed to developing full-category coverage, but the status quo is that everyone is partial to major students. At present, the domestic appliance market is still relatively fragmented, and the advantages are usually only concentrated in a certain category. To achieve full product coverage, it will not only test its own R&D capabilities and industrial chain deployment capabilities, but also face dimensionality reduction attacks from other giants in a certain segment. The difficulty of multi-explosive products can be imagined. 

In the various subdivisions of home appliances, Hisense’s ace products seem to be less glamorous, and it may be more difficult for Hisense to create explosive products to complement the shortcomings. 

TV is Hisense’s old business, but Skyworth has ranked first in the domestic TV sales list for many years. Refrigerators have Haier, air conditioners have Gree, and Midea is a representative of small household appliances. In terms of consumer perception of products, Hisense has not achieved the ultimate. 

According to data from China Business Intelligence Network, Midea Group (185.710 billion), Haier Zhijia (209.726 billion) and Gree Electric (170.497 billion) rank among the top three listed companies in China’s home appliance industry in terms of revenue in 2020, while Hisense and Hisense Video is ranked 7th and 8th. Revenue reflects consumer preference to a certain extent, and the combined revenue of the two listed companies of Hisense is only 87.708 billion yuan. Consumers’ awareness is weak, and they cannot be trusted, which is not conducive to Hisense’s scene creation. 

Although Hisense’s “1×3×N” smart life strategy is more in line with the future, smart life is embodied in the word “wisdom”, which requires a lot of data accumulation. 

The data generated by home appliances is inherently limited. Under the premise that scene-based products cannot be popularized on a large scale, it is difficult to talk about the “wisdom” under the big data algorithm. As for outside the smart home smart community area and smart cities, the moment still in its infancy construction, for the moment Hisense not seem to have much substantive help. 

How to gain the trust of users to build a smart life, Hisense still needs to actively explore and tell new stories.

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