Under the influence and squeeze of multiple factors, the downturn in China's flooring market has continued for quite some time. In this process, more and more small and medium-sized floor companies began to realize that almost every enterprise is faced with obstacles such as cost, exchange rate, capital, technology, brand, etc. These levels are also currently The weaknesses of many small and medium-sized flooring companies exist.
From another perspective, the survival of the fittest should be a good thing for the entire floor market. However, many small and medium-sized floor companies have been shaken out of the game will also bring many problems, such as after-sales, there is no commitment to the consumer warranty service, which will greatly damage the interests of consumers.
A small and medium-sized floor business owner sighed that it is really not easy for small and medium-sized floor companies to develop. It also needs to pass five levels and six levels.
First Pass: Costs Since the first half of this year, due to the substantial increase in costs of raw materials, labor, rent, and funds, a large number of small and medium-sized flooring companies have chosen to shut down under the pressure of rising raw material prices and poor terminal sales. There is a lack of bargaining power in the industry chain, and it is impossible to transfer costs through pricing, and the profit margins have been compressed and are on the verge of losses.
Due to the lack of scale support, under the pressure of rising raw material prices and poor terminal sales, many of the floor companies' operations were more difficult and began to shrink strategically.
The second level: the exchange rate is closed.
Due to the continuous appreciation of ***, foreign trade small and medium-sized flooring companies are still subject to the "exchange rate off" impact.
Many foreign trade export-oriented small and medium-sized floor companies have low added value and low profits. If the dollar-denominated sales revenue is converted into ***, a large proportion of *** will rise, and it will be difficult for the company to make a profit or even lose money.
An industry source said that due to the relatively high impact of raw material price increases on companies, coupled with the pressure of *** appreciation, we want to increase export prices. However, customers in Europe also want to reduce quotas with us because of the market downturn. In this case, it is impossible to raise the price.
The third level: funding.
At present, many flooring companies are faced with the problem of shortage of funds, and capital is the lifeline of the company. Its shortage will lead to insufficient promotion costs; it will be difficult to attract investment, the cultivation of dealer teams falls short; and the construction of its own marketing team is not perfect.
At the same time, bank credit growth has slowed this year and social mobility has become tighter. Flooring companies have faced "financing" and financing costs have risen. At the same time, enterprises are affected by factors such as rising costs and slowing down of capital turnover. The demand for financing has increased significantly, and the contradiction between supply and demand for small companies' funds has intensified.
The fourth pass: technical clearance.
In the market economy, when the individual labor productivity is greater than the social labor productivity, the profit space will increase. Under the current situation that the floor cost is generally increasing, it is one of the important ways to realize the technological upgrading to seek the profit space.
The fifth pass: brand off.
As the flooring industry hits the winter, more and more companies are recognizing the strength of the brand. The price can impress consumers and get a chance to trade, but the brand can seize the trust of consumers and gain long-term business opportunities.
At present, market resources and capital are moving closer to companies with brand influence and competitiveness, and branding is one of the trends in the future.
How much water a bucket can hold depends on the shortest planks and the famous bucket effect, which is also applicable to flooring companies. The insufficiency of promotion expenses has caused distributors to have no confidence in the products and increased the difficulty of attracting businesses. Enterprises cannot recruit business people, and it is difficult to return funds for the construction of the next step, resulting in a vicious circle and even facing the risk of being eliminated.
A floor company official said that it is really painful to do business now. In the financial crisis, we received more orders and made less profits. But now there is a single dare to pick up, and the money cannot be earned. In particular, *** appreciation and labor costs have the greatest impact. This year's labor costs have risen by 20% over last year. The exchange rate of the *** has also been rising. 95% of the company's products are exported, and these have directly reduced profits.
A brand flooring dealer said that we actively took engineering channels in the city and changed the sales situation of past specialty stores. In fact, this change is also helpless, because the retail volume is too small, if you rent a place to open the store is not worthwhile. However, the current sales situation is still struggling. The developers are not active and unwilling to combine the floor with the building and restrict the development of the floor.
There is such a very good saying. Whoever wins the end is the winner.
In fact, the competition in the flooring industry is also playing a "protracted war." The market capacity is still so great that it will not change because of which floor company failed. It is also impossible to decide the outcome in a year or two, but a gradual adjustment and phase-out process.
From another perspective, the survival of the fittest should be a good thing for the entire floor market. However, many small and medium-sized floor companies have been shaken out of the game will also bring many problems, such as after-sales, there is no commitment to the consumer warranty service, which will greatly damage the interests of consumers.
A small and medium-sized floor business owner sighed that it is really not easy for small and medium-sized floor companies to develop. It also needs to pass five levels and six levels.
First Pass: Costs Since the first half of this year, due to the substantial increase in costs of raw materials, labor, rent, and funds, a large number of small and medium-sized flooring companies have chosen to shut down under the pressure of rising raw material prices and poor terminal sales. There is a lack of bargaining power in the industry chain, and it is impossible to transfer costs through pricing, and the profit margins have been compressed and are on the verge of losses.
Due to the lack of scale support, under the pressure of rising raw material prices and poor terminal sales, many of the floor companies' operations were more difficult and began to shrink strategically.
The second level: the exchange rate is closed.
Due to the continuous appreciation of ***, foreign trade small and medium-sized flooring companies are still subject to the "exchange rate off" impact.
Many foreign trade export-oriented small and medium-sized floor companies have low added value and low profits. If the dollar-denominated sales revenue is converted into ***, a large proportion of *** will rise, and it will be difficult for the company to make a profit or even lose money.
An industry source said that due to the relatively high impact of raw material price increases on companies, coupled with the pressure of *** appreciation, we want to increase export prices. However, customers in Europe also want to reduce quotas with us because of the market downturn. In this case, it is impossible to raise the price.
The third level: funding.
At present, many flooring companies are faced with the problem of shortage of funds, and capital is the lifeline of the company. Its shortage will lead to insufficient promotion costs; it will be difficult to attract investment, the cultivation of dealer teams falls short; and the construction of its own marketing team is not perfect.
At the same time, bank credit growth has slowed this year and social mobility has become tighter. Flooring companies have faced "financing" and financing costs have risen. At the same time, enterprises are affected by factors such as rising costs and slowing down of capital turnover. The demand for financing has increased significantly, and the contradiction between supply and demand for small companies' funds has intensified.
The fourth pass: technical clearance.
In the market economy, when the individual labor productivity is greater than the social labor productivity, the profit space will increase. Under the current situation that the floor cost is generally increasing, it is one of the important ways to realize the technological upgrading to seek the profit space.
The fifth pass: brand off.
As the flooring industry hits the winter, more and more companies are recognizing the strength of the brand. The price can impress consumers and get a chance to trade, but the brand can seize the trust of consumers and gain long-term business opportunities.
At present, market resources and capital are moving closer to companies with brand influence and competitiveness, and branding is one of the trends in the future.
How much water a bucket can hold depends on the shortest planks and the famous bucket effect, which is also applicable to flooring companies. The insufficiency of promotion expenses has caused distributors to have no confidence in the products and increased the difficulty of attracting businesses. Enterprises cannot recruit business people, and it is difficult to return funds for the construction of the next step, resulting in a vicious circle and even facing the risk of being eliminated.
A floor company official said that it is really painful to do business now. In the financial crisis, we received more orders and made less profits. But now there is a single dare to pick up, and the money cannot be earned. In particular, *** appreciation and labor costs have the greatest impact. This year's labor costs have risen by 20% over last year. The exchange rate of the *** has also been rising. 95% of the company's products are exported, and these have directly reduced profits.
A brand flooring dealer said that we actively took engineering channels in the city and changed the sales situation of past specialty stores. In fact, this change is also helpless, because the retail volume is too small, if you rent a place to open the store is not worthwhile. However, the current sales situation is still struggling. The developers are not active and unwilling to combine the floor with the building and restrict the development of the floor.
There is such a very good saying. Whoever wins the end is the winner.
In fact, the competition in the flooring industry is also playing a "protracted war." The market capacity is still so great that it will not change because of which floor company failed. It is also impossible to decide the outcome in a year or two, but a gradual adjustment and phase-out process.
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