The development of Houlang is inseparable from the wave potential.
Editor’s note: This article comes from the WeChat public account “New Business Essentials” (ID: xinshangye2016) , author Huang Xiaojun.
The growth of R & D, products, users, and Xiong Electrical Appliances has a sample significance in the entire home appliance market. But under the rush of the commercial wave, the development of the latter wave is inseparable from the wave’s potential.
The impact of the epidemic on the home appliance industry is not over.
According to AVC statistics, the retail sales of all categories of home appliances in Q1 in 2020 will be 105.7 billion yuan, a year-on-year decrease of 37.6%.
Subdivided into monthly data, the decline in sales from January to March showed a gradual expansion trend, reaching 25.6%, 38.9% and 47.8% respectively. [1]
Rare negative growth, even the three leading household electrical appliances companies have not been entangled. According to the Q1 financial report, the net profit of the three companies, Midea, Haier and Gree, fell by 22%, 73% and 50% respectively.
The worst is Changhong Meiling, with Q1 net profit falling by 546% and a loss of 270 million.
With the decline of the whole industry, the data of Xiao Xiong Electric is eye-catching. According to its Q1 financial report: revenue was 739 million, an increase of 17.31% year-on-year; net profit was 103 million, an increase of 83.66% year-on-year.
During the release of the financial report, Xiao Xiong ’s share price rose to 128.88 yuan / share, with a market value of more than 15 billion yuan. And 8 months ago, the market value of the little bear electric appliance just listed was only 5 billion.
In less than a year, this small Internet appliance brand has grown by 10 billion in market value.
We often say that all success does not happen overnight. Then. Is there any growth logic that other small and medium-sized enterprises can learn from the beautiful data of Xiao Xiong Electric?
OEM brand forced by partners to touch the net
The founder of Xiao Xiong Electric is Li Yifeng, a technical man who graduated from the electrical major.
After serving as an engineer, quality manager and deputy general manager of a home appliance company, he put down nearly 10 years of work experience and planned to start a business.
At that time, Li Yifeng did not see any business opportunities. In his own words, the choice to start a business is only because of a complete walk through the last companyThe career cycle has already touched the ceiling. [2]
In 2006, the first product developed by Li Yifeng was the yogurt machine. He said that this market is not big, just for production and making money.
At that time, the first batch of yogurt machines was only 1,000.
Later, through some big brand gift orders, Li Yifeng set up an assembly line of more than 800 square meters to do OEM for small appliances such as yogurt machines and stew pots, taking into account the production of his own brand.
In the first year of business, the total sales of Xiao Xiong Electric reached 6 million yuan, but more than 70% was OEM revenue.
In early 2007, Li Yifeng discovered that several offline agents were selling Xiao Xiong’s products through online channels.
At that time, the online sales method was the industry red line. If the low-cost sales on the Internet are understood by the OEM brand, it will definitely put pressure on Xiao Xiong Electric to reduce the ex-factory price of the OEM products.
Immediately, Li Yifeng cut off the supply to nearly half of the agents. It’s just that there is no deterrent to agents, and online sales are still going on.
No way, in 2008, Xiao Xiong Electric fully opened up its online channels.
Li Yifeng selected a group of Taobao sellers to become Xiaoxiong ’s agents, requiring that the total monthly order should not be less than 30,000 yuan, and that Xiaoxiong Electric will provide an “online authorization anti-counterfeiting certificate”.
▨Xiao Xiong Electric ’s product display in JD. Screenshot taken from Xiao Xiong JD ’s flagship store
The growth of online distribution channels is unexpectedly fast.
Xiao Xiong Electric, which sold less than 17 million in 2007, achieved 80 million sales in 2009, of which about 70% came from online.
But after the first Taobao Double Eleven in 2009, such growth began to slow down.
The foundry has settled in Taobao, and large enterprises have come to “spend the soup.” According to Li Yifeng, dozens of traditional home appliance companies such as Midea, Jiuyang, Supor, and Langlu were producing yogurt machines alone.
In 2011, the performance growth rate of Xiao Xiong Electric decreased from 100% to 30%.
Making the product into a social currency for young people
In order to prevent the decline, the small yoghurt maker and egg cooker