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In recent years, with the rising temperature, the air conditioning market has once again set off a boom, and market competition has once again become the focus. However, the domestic enterprise that once rose and once threatened the status of domestic air-conditioning giants, Xuxu, declined after the light dissipated.
Back in the 90s of last century, the competition for the domestic air conditioning market has long begun. An enterprise focusing on the enterprise market, with a strong marketing team and excellent after-sales service, has won the hearts of enterprise users.
This has also laid the foundation for its market dominance for more than 20 years. At the same time, another domestic air-conditioning company has risen rapidly in the individual user market, that is, Zhigo.
At that time, the price of domestic air-conditioning giants and Japanese air-conditioning companies was generally high, and even the price of an air conditioner could reach more than 5,000 yuan, or even close to 10,000 yuan. However, Chigo air conditioners embarked on the civilian route, significantly lowering the price of air conditioners to 2,980 yuan, breaking the price bottom line of 3,000 yuan. This low-price strategy has aroused a warm reception among individual users, and in just six years, Chigo's sales soared from 200,000 units in 1999 to 2.8 million units in 2004, becoming one of the leaders in the domestic air conditioning market.
Chigo has firmly captured the hearts of individual consumers with its civilian route, and its sales have continued to rise, which has caused a huge impact on the top three domestic air conditioners. At the same time, home appliance chain retailers such as Gome and Suning have gradually emerged. In contrast, a domestic air-conditioning company is unwilling to adapt to market changes and compromise with the cooperation requirements of home appliance retailers, which further fuels the rise of Zhigao enterprises. As of 2010, Chigo's annual revenue exceeded 10 billion yuan.
However, with the continuous expansion of sales scale, Chigo began to feel the pressure of air conditioning quality and after-sales service.
Limited by small profits, Chigo is difficult to build a strong after-sales service team like the other two air conditioning giants. The industry has always emphasized that the quality of air conditioning is important, but its use effect depends to a large extent on the correct installation. This has led to a sharp increase in the number of complaints and a growing negative impact.
At the same time, after China's accession to the WTO, China's exports have increased rapidly, and the improvement of people's living standards has also made consumers have higher requirements for the quality of air conditioners. Environmental protection, energy saving, comfort and other characteristics have gradually become the focus of consumers' attention.
Japanese air conditioning companies have finally got rid of the previous price war dilemma and focused on the development of core components of air conditioners, such as air conditioning compressors. They produce compressors through joint ventures with domestic air-conditioning companies, or develop and produce their own, thereby obtaining the most lucrative profits in the air-conditioning industry. Today, Japanese companies such as Panasonic, Toshiba, Hitachi, and Mitsubishi still occupy an important market share in the domestic air conditioning compressor market. These companies' high-end air conditioning products often also need to purchase their core components.
In addition, Japanese air-conditioning companies are also eyeing the more profitable and technically demanding central air-conditioning market.
With the rise of wealthy families in China, who live in large flats, single-family houses and villas, the requirements for air conditioning products have become more refined and comfortable. High-quality central air conditioning can better integrate into these residences and provide residents with a higher quality of living environment. This gives Japanese companies a clear advantage in the field of central air conditioning. Although Gree and Midea occupy the top two in the domestic central air-conditioning market, some analysts believe that Daikin is the world's largest central air-conditioning company.
In contrast, despite Chigo's rapid expansion, it has invested relatively little in technology research and development.
In 2013, for example, Chigo's R&D investment was only 85 million yuan, while Midea's was as high as 3 billion yuan. The lack of technology research and development caused Chigo to quickly lose its advantage after the market turned to technology competition. In recent years, there has been a steady stream of negative news such as frequent sales of shares and property sales, which is in stark contrast to Japanese companies.
Practice has proven that price wars are not a long-term solution. When market share gradually condenses among a few companies, competition in core technologies becomes the key. Although Japanese air conditioning companies lost to Chinese air conditioners in the price competition, they gained core technology
They can still make huge profits in the Chinese market.
In contrast, Chigo failed to quickly adjust its business philosophy and still tried to rely on price wars to maintain its position, which eventually led to its current predicament. This situation is worth pondering for Chinese enterprises.
Looking back on the past, the development process of China's air conditioning market is full of twists and turns. The rise and fall of Chigo is undoubtedly a vivid microcosm. In the context of increasingly competitive markets, companies cannot rely solely on low-price strategies to gain market share. Core technology, quality, service quality, these are the foundation of the long-term development of enterprises. Although price wars can bring temporary success in the short term, it is difficult to build the core competitiveness of enterprises.
As a Chinese enterprise, it is necessary to learn from the development path of Japanese air conditioning companies. After being frustrated in price competition, they actively sought technological innovation and set their sights on the development and production of core components. It is these technological innovations that have gradually found a foothold in the market competition and maintained a long-term competitive advantage.
At the same time, Chinese enterprises should also increase investment in technology research and development to cultivate their core competitiveness. The market is changing, the needs of consumers are changing, and only continuous innovation can meet the increasingly diverse market needs. More importantly, enterprises should establish a sense of continuous progress, not satisfied by short-term success, but constantly pursue excellence and move forward steadily.
Chigo's decline is also a reminder to recognize the nature of the market. Market competition is never a simple price comparison, but a comprehensive embodiment of many factors. Price wars are only one aspect of competition, not the only means for companies to win. When the market presents new changes and needs, enterprises should adjust their strategies in time, meet the challenges, and constantly explore ways to adapt to the market.
In the growth process of Chinese enterprises, Chigo's story will serve as a living case for future generations to learn from. From this, we can see that enterprises need to always adhere to core values, pursue technological innovation, and continuously improve quality and service.