", what" let consumers enjoy low prices "and so on. These things are unreliable. Improving product quality requires huge investment and determination, and it takes decades of accumulation.

You blindly low price, there is no good product. The root demand of consumers is a good product and a high quality product. Enterprises can't meet their needs, so they are forced out of China and go to Japan and other countries to buy wildly ".

In recent years, companies in various industries"closure", "shutdown", "bankruptcy", "wage arrears", "performance decline", "loss"Waiting for news to shake people's hearts. Due to the serious overcapacity in China, many enterprises either have no business or rely on low profits to survive.

In addition to the external environment, the internal vicious competition is also swallowing the good times of the manufacturing industry. In order to maintain customers and ensure that there is business to do, some enterprises do not hesitate to sell goods in a "capital preservation" attitude, which increases the risk of more small and medium-sized factories closing down.

"People do businesses with low prices!" Now it seems that the "low price competition" is more terrible than the "collapse tide".

In the buying and selling market, when buying things, of course, you have to choose the cheap ones, but the key problem is that when customers cannot identify the quality of the products, the seller's bottomless operation eventually disrupts the market, resulting in the wrong phenomenon of starving to death peers, exhausting themselves and killing enterprises.

 

starve to death peers

For example, in the same area, there are 50 manufacturers of the same type, and there are 50 dealers in need in the same area. If one factory takes care of 10 dealers at a low price, the remaining 49 will have only 40 opportunities, and those who fail to receive orders will starve to death. In the long run, the market is disrupted.

 

 

dead tired myself

The gross profit margin of manufacturers is controlled at about 20%, which is within the normal range, but in fact, some manufacturers are taking over 5% of the gross profit margin in order to do business, and some are 2% or even lower. After receiving the order, of course, I am happy. The small workshop is in full swing day and night to catch up with the construction period. The marketing department is busy issuing orders and arranging delivery every day.

Behind this seemingly prosperity, manufacturers are really better off? By the end of the year, a reckoning, remove workers' wages, rent, utilities, marketing, logistics, health, network, telephone, all kinds of fines, alas, a year of hard work, in the end there are three melons and two dates, it is better to work for others to earn more, why bother?

Recently, more and more business leaders complain that low-price competition has disrupted the normal order of the industry. "No matter what kind of product, there will always be a lower price product. No matter how low the price given by the downstream user, someone will always take the order. From a production point of view, such a price does not guarantee profit margins at all, and if they can do it, it must be cutting corners on raw materials and processes." In the long run, the healthy development of the industry is bound to be threatened, and the influence of made in China will certainly decline.

 

 

Pit dead downstream customers

There is a jargon called "buy never sell fine", not insiders never know how deep this industry this water.Buyers think they have taken a big advantage, but they don't know that they should cry most. I often hear all kinds of customers complain about problems, but I don't know that the cost of raw materials has risen seriously and the cost of all aspects remains high. What kind of high-quality products can be bought at such a low price? What is ultimately damaging to one's own interests is the greed for cheap prices.

The customer thought that he took a big advantage, but he did not know that the owner himself should cry most. Two months ago, a guest came to the small editor's shop and said: The toilet I bought last year has been blocked three times in just four months from the beginning of the year to the present. It cost 180 yuan to ask the repairman to unblock it. I went to help see what the problem was.

I went there and saw that the quality of this toilet was not generally poor. The surface was still in the past, but the key places where the water tank and sewage outlet looked like garbage. After less than a year of use, the water tank was leaking. The sewage outlet was not only a 200mm small-diameter sewage outlet but also not glazed. Finally, we removed the toilet and found three sewage outlets.

It is strange that such a toilet is not blocked! I asked him: How much did you buy this toilet for? He told me and asked me if it was expensive. I said, you have taken advantage of it. The price you made is based on the standard. Even the raw materials and labor costs are not enough, not to mention advertising, sales and installation costs, let alone profits. Finally, we removed and reinstalled one for him at the normal price.

Chinese business will lose the future

-Consumption upgrade, China's pan-middle class is on the rise, good quality and low price lose the future

Chinese consumers are upgrading. China is no longer in a state where the overall income and consumption power were relatively low at the beginning of reform and opening up. After more than 30 years of development, China has become the world's second largest economy, and its per capita income is even higher. The Chinese even bought 46% of the world's luxury goods in 2014. In 2014, Chinese citizens traveled abroad more than 0.1 billion times, and overseas consumption exceeded 1 trillion, chinese people have become a consumer group that can not be ignored in foreign countries, and even some shopping malls have launched policies and even special service guides for Chinese consumers.

All of these show that,China's consumption is no longer the state of consumption in the past, it has been greatly upgraded, and China's pan-middle class is emerging.

 

 

Chinese consumption in the international market is amazing

In the face of this impact, if Chinese enterprises do not improve the competitiveness of products and brands and increase the added value, they will lose the Chinese market. The overseas purchasing power of Chinese consumers proves that China does not lack consumption power, but "Chinese products do not meet the growth and promotion needs of Chinese consumers". If they cannot be promoted, they will lose the Chinese market. If they cannot launch high-quality and competitive products,As Ren Zhengfei said, it will lose its future strategic competitiveness.

Low price competition means that enterprises will not have sufficient funds to invest in R & D, design and manufacturing. Without R & D and design, enterprises will lose their competitiveness in the key links of the industrial chain, which will affect the quality and quality of products, form a bad impression in consumers' minds, and will continue to lower the image of made in China and force consumers to buy products abroad.

In the past two years, as a Chinese private enterprise and a leading Chinese technology company, Huawei has continued to be a great success because Huawei has come to this day and is dedicated to providing good products. For this reason, for decades, huge amounts of money have been spent on research and development every year. In the past ten years, Huawei has invested 240 billion yuan in research and development, and the proportion of research and development personnel among 170000 employees is as high as 45%.

Huawei has set up 16 R & D centers, 31 joint innovation centers, and joined more than 170 other quasi-organizations and open source organizations around the world. As of December 3, 2015, Huawei has obtained 50337 patents. The world's first-class mathematicians, physicists, chemists have gathered in Huawei.

 

The "supply-side" adjustment frequently mentioned in 2016 to strengthen the supply-side efforts is also a far-sighted countermeasure against this trend. The Ministry of Industry and Information Technology will make efforts in the supply-side reform to increase varieties, improve quality and create brands as the main line, carry out special actions to improve the supply of consumer goods, and promote the innovative development of light industry, textile, food, medicine, intelligent hardware and other industries.

 

 

To Dear Customers

Story one:

A friend went to buy a rougamo and said to the boss, "Give me one, no chili, give me more meat, put it, put it again, put it again, put it more...", the boss looked up at him, "I'll roll your head, right?"

 

Story two:

Once there was a salesman asked the boss:"There is a small factory in the market. The price is very low and it is difficult to deal with. What should I do?"

The boss asked:"Since this factory is so powerful, why has it always been a small factory while we are a big factory?"

 

In fact, low prices usually only play the role of "spoiler" in the market, with insufficient success and more than failure. In confrontational competition, high prices are often upset or even frightened by low prices, but low prices are always difficult to beat high prices in the end, and even fail in the face of high prices.

Without the support of profits, which comes from after-sales service and continuous innovation!

The customer has always felt that it is expensive. The mission is to reduce the price. After calculating the material cost with me, I would like to ask him very much:

Have you increased the R & D cost? Have you increased the labor cost? Have you increased the store cost? Have you increased the management cost? Do you need after-sales service? Do you need quality assurance?

The premise of service is profit. Profit space can be squeezed, but it cannot disappear. Otherwise, service will disappear together with profit.