White electricity is a classification relative to black electricity. It refers to household appliances with white appearance such as refrigerators, air conditioners, and washing machines. The white electricity industry has a distinctive feature, which is high gross profit rate. For example, Gree, Midea, and Haier are the three largest companies. Giants, the overall gross profit rate exceeded 30%. Among them, Gree air-conditioning business had a gross margin of 38% in 2017, which is the holder of many years of records. What is curious is that at present, no one Internet company seems to be able to break the high level of white electricity. Gross profit. Even Xiaomi, who will soon be listed in Hong Kong, has not succeeded in stunting the white power industry. What is the reason?
Since 2009, due to favorable policies such as 'home appliances going to the countryside' and real estate booming, the white power industry has entered a golden age. After the tragic reshuffle of the industry, Gree, Midea, and Haier’s three major brands have taken the leading position in traffic development. The remote small townships can see the offline stores of these three brands. The white power industry has formed a mature system from product research and development to supply chain to sales channels. For any internet company that may be struggling across borders , The traditional giants will not easily cut the weight of life and death.
In December 2014, Xiaomi Rice Co., Ltd., which had a stake of 1.2 billion shares and 1.2% shares, launched a smart air-conditioner. It can achieve 'one button operation' and 'one-hand control' functions. It can also connect millet bracelets. After the home is set up, it is automatically turned on, and after sleep, it sleeps automatically and is priced at RMB 3,099. In the inverter air conditioner of the same configuration standard, compared with other American products, it does not reflect the cost-effectiveness advantage, and it is even more expensive than other brands. In the end, the market’s response was almost flat. Dong Mingzhu and Dai Mei were “two liars” at the time. It should not be for the sake of eyeballs, but because the understanding of the industry was too thorough.
In August, 2017, Xiaomi Eco Chain Enterprise Zhimi introduced air-conditioning products. The arc evaporator was a technology that was eliminated several years ago. It was priced at 4,399 yuan. Apart from the MUJI-style design, there was no competitive advantage. Lei Jun did not The product platform is not even allowed to enter the Xiaomi Mall. This is because it does not meet Xiaomi's pricing strategy.
The root cause of the two failures is actually that Xiaomi cannot independently participate in the procurement and production of components. There is no right to speak on the supply chain, and the industry’s technological black box cannot be removed. The core technology of air conditioning is mastered in the foundry industry. In Changhong's hands, Xiaomi had difficulty in pricing in front of the traditional giants.
The high gross profit rate of the white electricity industry essentially comes from the asymmetry of information at both ends of the supply and demand, especially the technical parameters of the compressors of the core components. Manufacturers can produce products of various models and make it impossible for users who do not know.
In fact, the white electricity industry has its own unique technical barriers, which ensure that the high gross profit margin of the industry can not be easily broken. Although the working principle of white electricity products is very simple, component assembly and production are relatively easy, but some core components, the domestic and world leader There is still a certain gap in level, especially the compressors of refrigeration systems.
The compressor is equivalent to the CPU of the mobile phone, the engine of the car, and is called the 'heart' of the white electricity product. The larger the value, the better the performance. At present Gree's self-developed compressor has the highest rated performance ratio of 6.3. Japan's market entry standard is that the energy efficiency ratio of the compressor reaches 5 or more. In 1983, China began to introduce compressor production technology and equipment from Japan. This is also the soft underbelly of China's entire white electricity industry, and it is still the direction in which national industries are working.
In recent years, white electricity companies have also tried to provide services through the Internet to upgrade their products. Taking smart refrigerators as an example, they can analyze food data, provide e-commerce services, or participate in the medical and health field through 'nutrition analysis'. However, the capabilities needed behind this are Regardless of user operations or artificial intelligence, white power companies are far from possessing. The major manufacturers are nothing but the development of a mobile phone terminal. The effect is very poor. Ultimately, white power companies cannot transform the Internet from traditional manufacturing.
Actually, the best hardware currently on the market is still the traditional hardware that does not have any smart features. This, in turn, has a lot to do with the usage scenarios of white goods. The main consumption scenario for white goods is the renovation of new homes, and Household consumption for the unit, the distinctive feature is the frequency of replacement is particularly low. White product design life is mostly in about 10 years. Low-frequency purchase, high-cost replacement, determines that white electricity products can not be like the mobile phone industry, small profits but quick turnover .
At the same time, China’s consumption structure is changing. According to data from the Ministry of Civil Affairs, China currently has at least 200 million single people. While white electricity products are generally home users, single people, especially those from large cities, are not in the rented house. In order to purchase high-end home appliances, white goods can guarantee high gross profit margins by raising brand premiums, so as to achieve 'three years without opening, and open for three years'.
Therefore, the development of the white power industry is mature, the market structure is stable, and the intelligent transformation of the industry is still difficult. Internet spoilers are also difficult to penetrate the supply chain. They cannot break the technical barriers in a short period of time and naturally cannot grasp the pricing power. Plus users of white power products Scene, to some extent, attached to the home improvement industry, the characteristics of the purchase of low-frequency companies also require companies to make enough money at one time. These have determined that Internet companies can not successfully transform the white electricity industry, even if millet can not enter.