How Hardware Companies Develop Small Town Markets

China's hardware industry grows at an annual rate of 20%, and the total annual output value reaches 400 billion yuan, which is higher than that of the household appliance industry. China's total light industry exports account for about 25% of the country's total exports, and the hardware industry's exports ranked first in the light industry. China's hardware products are almost everywhere in the world, and China is becoming a veritable hardware industry power.

It is very difficult for hardware tools to enter the market of small cities and towns in China. In the face of the development of hardware enterprises in China entering the market of small towns, it is also necessary to see clearly the problems existing in several industry markets. In the future development, the hardware tool industry will explore new ways to create a rural market. The huge market development space will make the industry very optimistic.

First of all, logistics costs are extremely high: Because the population is highly fragmented, the transportation facilities are backward, and the sales network is not perfect. The population of the potentially affluent population in small towns is 135 million, which is equivalent to the total population of 137 million in the first and second tier cities.

The average income of the two families is also the opposite, but the former is scattered among the 12,000 small towns and 2000 villages and counties in the country. The difficulty in market development and costs are high. This is also the reason for the failure of Changhong Home Appliances to the countryside in the 1990s. Therefore, it is necessary to have sufficient understanding and preparation for the development of the small town market. The development of small cities and towns by enterprises is an inevitable trend of China’s economic development, and is also the direction in which the central government develops strategic planning for county economies. Therefore, enterprises must abandon short-term behavior and must adjust their strategic direction, organizational structure, and operating model to overcome difficulties and achieve success. .

Because the rural market is highly fragmented, the cultural differences are large and the living habits and natural environments are very different. Therefore, the requirements for home decoration vary greatly. Not only are they different from cities, but also between rural areas, Luo Baihui recommends hardware companies. First, study their living habits and develop products that suit them based on their characteristics. For example, they need stacking rooms to place production tools, miscellaneous items, and food items. Due to differences in the use environment, The wear resistance and other characteristics of the tiles will have special requirements. Only by understanding them and designing their favorite products will they be welcomed by the market.

The second is to establish a sales network: hardware tools for the city's sales model certainly can not apply to the rural market, due to the vast area of ​​rural areas, it is necessary to develop a flat sales network, and companies need to set up a dedicated leadership organization, organize force research The market, the development of rural market development strategies, and the training of sales staff, is a long-term activity that concerns the survival of an enterprise. Any short-term behavior is doomed to failure.

The third is to reduce logistics costs: In the early days of the United States, the world-famous Sears company delivered products to the countryside through mail-order channels, and through this channel, mail-order manuals designed specifically for farmers were sent to farmers through the post office. This is the market. Synergy, that is, configuring the delivery of items through the post office.

Therefore, our current approach to reducing logistics costs can only be achieved through synergies. Especially in the current home appliances to the countryside, car-to-country has become a major trend. Hardware tool companies must study how to use these existing channels and share resources to share Reduce logistics costs. The building materials industry must truly go to the countryside and reduce logistics costs. This requires the concerted efforts of the industry and even the industry to develop a new model to achieve the reduction of logistics costs.

Developing a township market with great potential is a major trend and a fertile ground for brand cultivation. However, opportunities and challenges coexist. Only companies that use hardware to the countryside as a development strategy are not expedient measures to survive the crisis, and are organized in enterprises. Changes in architecture, investing resources in research, formulating new operating models, cultivating talents, and organizing strengths to implement, can seize opportunities and be successful.