Hardware industry: channel is king

There is an old saying in the shopping malls that people in the pipeline get the world, and the hardware industry is even more so. China's hardware companies have tens of millions, especially after the financial crisis, some foreign trade-oriented companies have turned to domestic sales, which has intensified competition in the domestic hardware market. The principle that the channel is king has become a competition. Especially when Superstar Technology is listed, this hardware company is the true practitioner of channel king.

Like China's hardware industry, due to the wide variety of domestic hardware products and increasing cost pressures, sales channels have become one of the key competition factors, and the competition for channels among the parties has become increasingly fierce. On the one hand, hardware companies have strengthened their control over retail terminals, striving to reduce sales, save on sales, and make sales channels more professional. The company's sales model has been able to adapt to a variety of markets at the same time. On the other hand, the development trend of the sales industry has made the hardware city's status continue to rise, and its ability to control the industry has increased. The participation has led to price competition that was previously dominated by manufacturers. With its vast market coverage, purchasing scale, and cost advantages, the hardware market will increasingly strengthen its control over production companies in terms of product pricing, payment, and delivery.

After the outbreak of the global economic crisis, in the face of the shrinking demand in the international market, many export hardware companies have started the "export to domestic sales" strategy. First, the economic crisis has caused a deadly impact on foreign-oriented enterprises. Many export-oriented hardware companies have fallen into a desperate situation in operations. Exporting to domestic sales has become the last “helping the grass” for hardware companies to become a crisis; the second is the huge potential customers in the domestic market. Demand has provided enough market cakes to not only allow enterprises to survive in the crisis, especially as the country promulgates a series of economic policies to expand domestic demand, it also provides enterprises with bigger and stronger market opportunities.

Modern manufacturing industry is a chain of interlocking value chains, including brand building, research and development, design, manufacturing, assembly, procurement, inventory, marketing, and transportation. Engaging in manufacturing is just one of the links in the entire manufacturing chain. It is the lowest end of the entire value chain. Only by establishing its own sales channels and owning its own brands can it occupy the highest end of the value chain. The economic crisis has even more demonstrated that hardware companies must stand invincible in the crisis and go against the trend and must establish independent sales channels.

Whoever controls the channel will control the terminal and become the market's master. If it is said that the supply of physical products in the market economy is in excess of demand, then the products used as channels are scarce resources that are in short supply. Channels are the bond between customers and manufacturers, communication tools, information feedback systems, and value exchange venues. Channel construction is actually a platform for the integration of information systems, logistics systems, design systems, service systems, and brand systems. It is a comprehensive trading platform.

In the face of the economic crisis, hardware export-oriented enterprises cannot withstand the impact of “storm”. The root cause lies in not having control over this trading platform. They are used to simply producing products and indulging in earning the lowest-end labor force profits of the manufacturing industry. Such enterprises are often labor-intensive enterprises with high energy consumption, low added value, heavy environmental pollution, and severely backward technology. It is very fragile, and it is unavoidable that it will collapse in a crisis.

In the face of today's "channel is king" rather than "manufacturer is king", the era of overcapacity, and the status quo that manufacturing industry is gradually shifting to the lower manufacturing cost, enterprises will only be simple OEM production, destined to become market competition. The next victim. To revitalize the productivity of enterprises, we should establish independent brands and independent marketing channels. Only in this way can companies become market leaders and have the right to speak.