Shulou(Shulou.com)11/24 Report--

With the Singles' Day holiday in a year, a series of small household appliances such as air fryers, wall-breaking machines and electric hotpots have once again attracted the attention of the public.

Brands have also begun to rub their hands and prepare for the test from the consumer market. But the bad news is that the market's desire for small household appliances has been shrinking in the past two years. According to AVC's omni-channel data from January to September 2023, the overall retail sales of small kitchen appliances were 38.86 billion yuan, down 9.6% from a year earlier, including online retail sales down 9.9%, offline retail sales down 8.9%, and retail sales of 188.6 million units, down 0.5% from the same period last year.

Compared with the rapid development of the small home appliance market in 2021, the current market is quite "depressed".

During this period of time, many small household appliance brands have also released their third-quarter results one after another, and from the perspective of the financial report data, there are also several joys and sorrows, and a very important reason for the current situation is that the industry is gradually falling into an "impossible triangle."

Small household appliances are moving towards a new cycle, showing the truth under the change.

There is an "impossible triangle" in the fields of currency, investment, project management and even economic development. at first, it comes from Mundell, a well-known economist, about the dilemma of target choice faced by economic, social and fiscal policy, under specific backgrounds and conditions, no matter what the authorities do, it is difficult to achieve three goals at the same time.

After the rapid development of the small home appliance industry in the early two years, the impossible triangle of the small home appliance track is being formed by "profit, sales and quality". It has also become a "curse" that restricts the development of the industry: most of the time, sales growth depends on running volume at low prices, but what is brought about by low prices and more sales is obvious profit discounts, and the lack of profits makes brands inevitably have problems in product quality.

The reason why there is such a problem in the small home appliance industry is that consumer decisions or consumer use change faster than the industry expected.

In the past, the style of play pursued by the industry has always depended on marketing and the quantity of SKU. The overwhelming publicity, coupled with low prices and its "homogeneous innovation", may capture the consumer market in a short time, but once the time is lengthened, consumers can also find a series of problems such as less application scenarios and low frequency of use, which makes the reputation of small household appliances continue to decline, and eventually spread to the entire industry.

Of course, there are no exceptions in the industry, and Little Bear is one of them. The latest financial data show that in the first three quarters of 2023, the company's operating revenue was 3.318 billion yuan, an increase of 22.96% over the same period last year. The net profit belonging to shareholders of listed companies was 316 million yuan, an increase of 31.24% over the same period last year. Outperform the industry in terms of revenue, and achieve the rapid growth of rigid demand categories and the extensive growth of emerging categories.

One of the key factors why Little Bear has been able to "go against the market" for many years is that Little Bear insists on strengthening the rigid demand category and expanding the emerging category to meet the needs of users. launch products and scenarios that best suit users according to the times.

To put it more bluntly, in the current new cycle, Little Bear Electric Appliances is being used as a "consumer resistant product" thinking and a "fast consumer product". For example, Little Bear takes the boutique strategy as the traction, promotes the quality of products, actively optimizes the product structure, reduces the difficulty of enterprise category management by streamlining the number of category SKU, and at the same time enhances the competitive advantage of explosive products.

In addition, and more importantly, Little Bear Electric Appliances has broken the "impossible triangle" of the industry in its own way.

Why should Little Bear Appliance break the "impossible triangle"?

The current market is "blocked", but it is not that small household appliances are no longer needed, but that the demand has become more personalized and differentiated, so for enterprises, the only thing they need to do is to meet these "new needs".

1. Grasp "sales volume and quality" with "boutique strategy"

The market demand for small household appliances has always been changeable. What may be needed today is small household appliances, and tomorrow there will be a strong interest in outdoor small household appliances.

This is undoubtedly a huge challenge for the industry, how to keep up with consumer demand, and how to meet consumer demand, which requires the insight of enterprises in the first step.

For example, according to the 2022 China consumption trend report released by Zhimeng Consulting, according to Taobao's "lazy consumption classification", post-00s can be called "omnipotent lazybones", with 90% of them not cooking and 79.5% of post-995 "housekeeping experts".

However, there has also been a new change in this kind of "laziness", that is, from the "laziness" that was simply avoided in the past to the "quality laziness" now in order to better enjoy life.

A large part of the reason why Xiao Xiong is able to take the lead in the industry is to take the lead in seizing these consumer demand. After perceiving the demand of young people to enjoy laziness and pursue a "refined life", Little Bear Electric egg boilers, health pots, hot water dispensers and other products have grown from scratch, from existence to excellence; after seeing the multi-scene needs of users with different needs, such as Bao Ma, office workers, camping parties, etc., Little Bear Electric Appliances began to create an exquisite lifestyle covering home, office, outdoor and other scenes with a full scene layout.

And not only in the product, but also in the channel, compared with the traditional small household appliance brand winding on the play, Little Bear Electric Appliance builds a channel matrix including offline shelf + social + interest e-commerce and so on.

To put it bluntly, compared with the industry's "build a hammer before looking for a nail", Little Bear sees the nail first and then customizes the hammer, the result is of course more accurate and approachable, which is the underlying logic that Little Bear has been able to create countless popular styles over the years.

And all these are the success of Little Bear based on its "boutique strategy". Through the "boutique strategy" to solve the sales problems of Little Bear from personality and market segmentation, at the same time, rely on the process of brand boutique, R & D boutique, manufacturing boutique and other processes to build their own "quality matrix". For example, Xiao Xiong removable bass wall-breaking machine combines new technology, new design, new materials, etc., to quickly break away from homogenization competition in the same category, with innovative experiences such as detachable knife 360 °easy to clean, bass does not disturb users, and quickly get positive feedback from the market. This also shows that Little Bear Electric Appliance makes its products really different from the industry and continues to form its own core competitiveness through "R & D boutique", "design boutique" and other ways.

Furthermore, Little Bear's "boutique strategy" is actually to grasp the needs of users and give them whatever the market wants, which will become the greatest guarantee for Little Bear to determine the future market.

2. Use "mathematical intelligence manufacturing" to solve the problem of "efficiency" and improve the overall profit-making ability.

Profit is the common pursuit of enterprises, but how to pursue profit is a technical activity. In the face of increasingly fierce market competition and rising raw material prices and other environmental factors, many brands are very embarrassed in product pricing, too low without profit, too high without a market.

Through the financial data, we can see that the profits of the leading players in the industry have been difficult to improve, and even Ren Zhengfei has repeatedly stressed that "if Huawei wants to be an engineering businessman, the most important thing is to make money." The reason is very simple. If there is no profit, there will be no product quality and no product innovation.

In the small home appliance race track, subject to the characteristics of the product, the way of making a profit at a high price is obviously unable to run in today's competitive environment, so what should be done? Improving efficiency may be the best way.

For example, Xiao Bear Electric Appliances is constantly improving its production efficiency and operational efficiency by relying on "digital intelligence manufacturing".

Small household electrical appliance enterprises have many characteristics, such as many SKU, many channels, long commercial chain and so on. These characteristics bring many challenges to the management of enterprises.

By improving its "digital" capability, Xiao Xiong continues to expand the boundaries of the digital platform, and actively and orderly promote the transformation of enterprises to digital and intelligent operation in a "three-wheel" drive of process, data and system. It has greatly improved its response speed, cost control and profitability.

In turn, these efficiency improvements save a lot of management costs for Little Bear, which can be fed back to various links such as research and development. According to the latest financial report of Little Bear, R & D investment in the first three quarters reached 106 million yuan, an increase of 11.74% over the same period last year, leading the industry.

Therefore, when the vast majority of brand strategies are still "running volume at price", profit, sales and quality can only be chosen one or two, and always have to give up at least one or two. With "boutique strategy" and "mathematical intelligence manufacturing", Little Bear Electric has constructed three channels of "profit, sales volume and quality".

In retrospect, the reason why Little Bear Electric Appliance is under pressure in the industry, it is reasonable to continue to maintain rapid growth.

Summary

In the face of the new cycle of the current small home appliance track, it may also be "accompanied by crisis" for players in the industry, and it is clear that under this round of change, Little Bear Electric Appliances is in the forefront armed.

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