Cabinet industry competition enters white-hot stage

The market competition in the cabinet industry has entered a stage of intense development. Although all commercial enterprises have introduced various strategies and measures, they still cannot change the status quo of losses. Even in this case, it did not stop the cabinets from expanding their sales.

At the moment of the collapse, the cabinets and building materials stores have begun to break through multiple channels such as sales promotion, rent reduction and e-commerce, but they still cannot cover the dismal status of the industry. Gome's former flagship store of the Gome Electrical Appliances Co., Ltd.’s former director Chen Xiao Investment’s Shanghai flagship store closed just six months after its opening.

Foreign-funded building materials manufacturers have even lost China. Take the case of Home Depot (HD), the world’s largest home improvement retailer, for example, a number of stores have been closed. B&Q also failed to "forgive." At the peak, it had opened more than 60 stores in China. After two years, it shut down more than 20 stores. The remaining stores have also been reduced in area and have also suffered losses for many years in the Chinese market. The poor profitability is the biggest reason for the shrinking of B & Q.

The surplus of stores is worth pondering is that, in the off-season, the pace of expansion of cabinet building materials stores has not diminished.

Red Star Magellan is the well-deserved "expansion king" in the industry. Today, it has reached the scale of 100 MALL, and has released a grand saying that it will reach 200 MALL nationwide by 2020.

In recent years, the pace of expansion of cabinet building materials stores has been unprecedented. The total area of ​​the national cabinet stores has exceeded 40 million square meters. Statistics show that in Shanghai alone, there are about 120 cabinet store outlets. Calculated at 10,000 square meters of annual sales of 100 million yuan, the current domestic market sales of 200 billion yuan, that is to say, only 20 million square meters of the store is sufficient, which means that there are nearly 50% of the store surplus.

An insider of a local building materials store told the reporter: "Losing money also has to be expanded because only a shop can raise the rent."

The market demand behind the expansion has weakened, and the efficiency of stores has plummeted. Why do these chain stores still have to brazenly expand?

“Making money from rent is a shortcut to kidnapping businesses at the current store.” Executives at a well-known building material company in Shanghai broke through the “hidden rules”.

According to industry sources, in Shanghai, there are nearly 300 yuan per square meter of rent for stores. In Beijing, some stores have a 100-square-meter store that has an annual rental of nearly 600,000 yuan.

At present, the rent for stores has become an unbearable burden for building materials dealers. Previously, cities such as Chongqing, Nanjing, and Zhengzhou had manufacturers or agents evacuated from the Red Star Macalline. Actually, there are some cases of brand evacuation. It is reported that about 60% of dealers in these cabinet stores are at a loss. The above-mentioned executives of the building materials company told the reporter that “60% may still be a conservative saying that the actual loss of dealers should be far more than this ratio.”

"In fact, a single store rental growth for us is that big business can afford, but the past few years, the number of store cupboard boom, all of a sudden our total rent will go up." The source said.

The executives told reporters, when stores and flooring company signed a cooperation agreement, often requires companies brands to enter the store chain in the country, if businesses do not want to enter a new store opened, then later also miss enter the chain stores Other opportunities. For example, if the store is reopened, the brand will not be able to enter the market. Even if it enters, the brand will not be given priority in placing the right. Author: Yi Shi Sheng Xiang Group Marketing Director Wang Xiaoyu told reporters, especially for big brands, have to bite the bullet into the store, and the more advanced the more he went into the store, but the senior does not mean you can make money, but it may be more Hard to make money. "This is also the helplessness of big brands, and the more channels, the better. E-commerce is a low-cost model that should be expanded. This high-cost model of building materials stores cannot be lost."