We are all reborn, who wants to be the richest man?

Chapter 677 Home Appliances Storm
“We don’t need to think about channels now, but we will have to face this problem sooner or later.

Unlike the island countries, separating production and sales is not a good option for Rabbit, and the future is an era where channels are king."

At the office of Matsushita Electric in the capital, Masaharu Matsushita, the son-in-law of the late Konosuke Matsushita, came to Rabbit for inspection as the new chairman of the Panasonic Group.

Masaharu Matsushita is talented, otherwise he would not have been recruited as a son-in-law, let alone inherited the position of chairman.

After Rabbit's investigation, he discovered the importance of channels. Often, the people who make the most money in the entire home appliance industry chain are those who control the channels.

Therefore, Masaharu Matsushita wanted to join forces with several other home appliance companies in the island country and Seibu Department Store to establish his own sales channel in Rabbit, but no one agreed. It could be said that they looked down on him as the newly appointed son-in-law.

In fact, Masaharu Matsushita had already guessed this result. First of all, the huge sales channel of Far East Mall was already available.

Another thing is that they are confident in their products and technologies, which can be seen from their market share.

The ultimate goal is to make up for the losses of the group and boost the stock price, not to build some unused sales channels.

With this money, they would rather build more factories and produce more televisions.

On March 3, Hitachi Home Appliances announced that it would officially withdraw from the low-end TV manufacturing field and focus on developing the mid-to-high-end market.

You should know that as early as 1985, the sales of televisions in Rabbit surpassed those of the United States and the Japanese, making it the world's largest TV sales country.

The TV ownership rate in the entire town has reached over 20%. Statistics show that every family is willing to spend % of their savings to buy a TV.

Hitachi has withdrawn from the low-end TV market, in which they had the largest share. Naturally, someone needs to fill the market vacancy of several million units this year.

Now is the best time. All island manufacturers are trying to increase their TV production capacity in order to take over the market share vacated by Hitachi.

I have to say that Masaharu Matsushita is far-sighted. In today's Rabbit world, without its own channels, a brand is destined not to go too far.

Of course, the island nation’s television collapse is not just a channel problem, it also has a lot to do with their own arrogance.

However, channels are definitely the most important. After 2000, the island's home appliances also attempted to return to the rabbit market by lowering prices, but they were unable to lower prices because the commissions taken by channel dealers were too high.

"Any developments from the Rabbit TV manufacturer?"

Hitachi would not withdraw from the low-end TV market for no reason. Masaharu Matsushita was well aware of this. There must have been something that forced them to make the decision.

Then the problem must lie with Rabbit's TV manufacturers. You know, many of these manufacturers are also from the Far East. From the Luo family's perspective, this is just transferring money from one hand to the other.

There must be something that makes them feel that the waste of resources is not worth it, otherwise they would not do this.

“Not yet, I don’t think the other side has any good strategy.

The other party has no other way to seize our market share except price war, which seems difficult at the moment.

You have to know that Hitachi’s TV motherboard factory has just started construction in Rabbit, and it will take at least half a year to start production.”

TV motherboard, core components, this is why domestic brands have no competition.

Because these parts need to be imported, unlike these TV brands in island countries that have all technical products from top to bottom.

Therefore, even though the manufacturers of Rabbit TVs have already pushed their profits very low, the selling price is still not much different from that of domestic brands, less than 20%.

Normally, this price difference is already quite large, but consumers in this era have different concepts.

They believe that a TV can be used for thirty to fifty years, and at this time, TV dramas from island countries are obviously more trustworthy.

Of course, there are exceptions, such as the home appliance brands invested by the Far East Group.

These brands that have entered overseas markets through the Honor Mall are also regarded by many Chinese people as domestic quality assurance, and their prices are also more affordable.

Masaharu Matsushita takes Hitachi's withdrawal from low-end home appliances very seriously, but for Panasonic as a whole and for the entire Japanese home appliance industry, there are too many people and too little work.

While Masanobu Matsushita was thinking about the foreseeable reaction of Rabbit Home Appliances, Rabbit did not give him any extra time to think.

At the Sichuan Changhong headquarters, Mr. Ni, who had just returned from studying in Hong Kong, gathered all the company's senior executives.

"Now our inventory exceeds 20 billion. How can we quickly recover the funds? This is very simple. I am not in a hurry at all.

Price war is our advantage. No matter how profitable a product is, it is useless without a market. So I plan to follow the old routine and reduce the price of all brands by 15% first.

Changhong is no stranger to price wars, and it is also Mr. Ni’s proudest work.

At that time, Changhong TV had an inventory backlog of more than 20 units and could not repay a bank loan of 3.2 million yuan. At the worst time, there was not even a thousand yuan in the company's account.

So in 1989, Changhong reduced the price of its entire product series by 350 yuan.

Surprisingly, Changhong was not only not hurt by the price cut, but also seized a large market share through the price cut and became the leading domestic color TV manufacturer.

This incident has made all domestic brands realize that if they just lie down they will only die, but if they go out they can not only survive but also make a lot of money.

This was the first price war for color TVs. However, at that time, the prices of domestic home appliances were still very high, and the price-performance ratio of island brands was also very high.

This led to consumers who gradually realized the situation starting to choose domestic products, but the market share was still dominated by foreign brands.

But things are different now. In recent years, the prices of domestic color TV brands have been falling again and again. Now with another 15% price reduction, the gap with foreign brands has suddenly widened.

“Mr. Ni, if we reduce the price by 15%, our profit will become very thin.

Once we lower our prices, other domestic brands will certainly follow suit. What should we do then? Should we continue to lower our prices?

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“I have considered this issue, but as our product output increases, costs will be further reduced and profits will be able to make up for some of it.

This price reduction is not for making money. Clearing inventory and collecting payments is one aspect, but further increasing brand awareness is the key, especially overseas.

I’m ready to move up to the high end, which is where the real money is made.”

Mr. Ni gained a lot of insights from his study in Hong Kong this time. What caught his attention most was how the prices of cheap products have become higher.

It still remembers the examples given to them by the teachers from the HKUST Business School, which was very impressive.

“What I’m holding in my hand now is Voss, a drinking water brand under Watsons.

Do you know how much this bottle of water costs in Hong Kong Island? 12 Hong Kong dollars a bottle."

The teacher's words surprised many mainland students, and some even exclaimed.

They really couldn’t understand why a bottle of water could be sold so expensively. Would anyone really drink water at 12 Hong Kong dollars a bottle?
"You think no one will buy it, right? But I want to tell you that VOSS is often out of stock in Hong Kong Island."

Shaking the water bottle in his hand, the teacher continued his lecture.

"Why is it so expensive? Do you know how much the bottle costs? Two or three dollars?
Do you know how much advertising took up? Maybe four or five.

Labor, transportation, warehousing, etc. all require money.

But what about the water we really drink? It’s worthless.”

Putting down the water bottle, the teacher asked, "What if you want to sell a toothpick for 10,000 yuan?
It's very simple, just make a box of pure gold and put the toothpicks in it.

So how do we increase the added value of cheap goods? It’s nothing more than branding and packaging.”

This class opened the door to a new world in Mr. Ni’s heart, and he couldn’t calm down for a long time.

Brand, as long as Changhong’s market share is increased, it will be a brand.

Packaging? That’s even simpler, just a better-looking appearance and more advanced technology.

"But what about the Glory Group?"

Hitachi has given up the low-end TV industry. Isn't it a waste of internal resources for Changhong to attack the high-end market at this time?

Mr. Ni didn't think so and waved his hand, not caring at all.

"Above the Glory Group is the Luo family. For the Far East Group, it doesn't matter who rises and who falls, as long as the overall market share increases.

But these are not what we should consider now, let’s fight the battle at hand first.”

(End of this chapter)