The demand for large-capacity, large-size, and new-trend home appliances is strong, and the sales of refrigerators, washing machines, and air conditioners are rising, with a growth rate of more than 150%. Since March, Suning Tesco's home appliance replacement consumption has continued to heat up, becoming the epitome of a new round of trade-in policy to activate the potential of "home consumption".
In the past quarter, the national and local policies on trade-in have been intensively introduced, and they have become the key words of "swiping screens". According to data from the National Bureau of Statistics, by the end of 2023, the number of major categories of household appliances in the mainland will exceed 3 billion units, of which a considerable number have been "overdue for service" and have been used for 8-10 years. The home appliance market has entered the era of "equal emphasis on stock and increment" from the "incremental era". The market predicts that this round of consumer goods replacement will release trillions of yuan of market space, and how to effectively activate the demand for replacement has become an important topic for the home appliance industry to tap potential and expand new ones.
Under the new opportunity, Suning Tesco took the lead. On March 26, Suning Tesco joined more than 30 brand manufacturers such as Midea, Haier, Hisense, BSH, Samsung, TCL, Skyworth, Panasonic, Boss, Fotile, A.O. Smith, Little Swan, Beko, Daikin, Konka, Sharp, Fujitsu, Meiling, Changhong, Nengsu, Shuaikang, Vantage, Wanhe, Wanjiale, Fadeo, Emmet, Pioneer, Zhigao, Joyoung, Supor, Aucma and other more than 30 brand manufacturers signed the "Joint Announcement on the Trade-in Action", launching a 10% discount on the trade-in payment of home appliances Under the new policy, it has become the first batch of pioneers in the industry to open up marketing links and upgrade and renew services through retail supply cooperation. Driven by the trade-in initiative, Suning's sales of green smart home appliances achieved a year-on-year increase of 107%, the sales of multi-brand and multi-category home appliances doubled, and the main channel effect of home appliance consumption accelerated.
With rapid response, efficient action and scale increase, why can Suning Tesco seize the first-mover advantage and work with brand manufacturers to achieve rapid growth in this round of trade-in?
Industry analysts pointed out that the focus of the new round of home appliance trade-in has shifted from "whether there is" to "whether it is good or not", which puts forward higher requirements for product structure, consumption scenarios and service links. By optimizing supply, upgrading scenarios, and consolidating services, Suning Tesco has established a complete trade-in system, and can provide additional subsidies on the basis of national policies with ecological enterprises, forming a more in-depth and lasting renewal influence, which is expected to better play the head demonstration effect and open up new space for development in this round of policy cycle.
Hand in hand with big brands to intensively launch new customized products to create "new and explosive models"
According to the data of Aowei Cloud Network, the sales scale of household appliances in China will reach 849.8 billion yuan in 2023, a year-on-year increase of 3.6%, of which the sales of green intelligent and quality upgraded household appliances have increased significantly. One of the major features of this round of trade-in is that intelligent, personalized, green and healthy household appliances have become the mainstream of replacement.
With more than 30 years of experience in home appliance retail, Suning.com has always maintained close strategic partnerships with leading brands, based on industry trends and consumer demand, and consolidated its supply chain advantages. According to the financial report data, the sales scale of Suning's home appliance business will increase by about 11.9% year-on-year in 2023. Behind the growth rate outperforming the industry market in the same period, it is due to Suning.com's accurate grasp of new market demand and the optimization and adjustment of commodity sales structure.
Since 2024, Suning.com has joined hands with home appliance brands to intensively launch new products, accelerate the co-creation of products with manufacturers, and provide users with richer and more cutting-edge product choices for new consumption. Taking emerging kitchen and bathroom products as an example, in March alone, dozens of new big-name products were launched on Suning Tesco, including Midea's S66 Pro dishwasher, Casarte Nebula kitchen appliance set, A.O. Smith smoke machine Q2NWi, Fotile Integrated Cooking Center J series, etc.
The relevant person in charge of Suning Tesco said that the trade-in of the old is focused on the "new", green smart and new trend home appliances can meet the needs of the family scene in one step, and the user's experience is stronger after the upgrade. Only by continuously increasing the supply of new products can we effectively attract users to carry out functional renewal and help popularize quality lifestyles.
In addition to the intensive new products of big brands, the customized products launched by Suning Tesco and other manufacturers have also become the "traffic password" for new consumption. Since February, Suning Tesco has successively joined hands with Midea, Haier, Hisense and other leading brands to launch a variety of new air conditioners such as KKC second generation, Ningmeng second generation, Hisense Spring Breeze second generation and "fresh and clean" air machine. During the National Rejuvenation Festival launched in March, the KKC air conditioners launched by Suning Tesco and Haier sold more than 50,000 units in the county market alone, becoming a popular product for air conditioner trade-in.
By strengthening supply chain integration, large-scale procurement and joint customization, Suning.com not only ensures the rapid launch and stable supply of new products, but also reduces operating costs and improves market competitiveness. It not only helps to meet the diversified needs of consumers, but also can introduce more "quality-price ratio" top-notch goods to the market at a lower cost, help brand manufacturers expand their sales scale, and help trade in the old to form a positive cycle of supply and consumption.
Open a big store, open a good store, and become the main position of quality replacement offline
In the past year, the trend of consumption stratification and grading in the home appliance market has been significant, and quality upgrades, whole-house intelligence, and scene experience have become the keywords for the advancement of "home consumption". Under the new trend, brick-and-mortar stores have increasingly become the main channel for consumers to purchase mid-to-high-end and packaged products and customize home scenes with immersive experiences and WYSIWYG quality assurance.
The above-mentioned analysts pointed out that the iteration of new technologies and new functions has deepened the dependence of household appliance consumption decisions on physical experience. The visual experience of 8K TV, the actual touch of a slate refrigerator, and the decontamination effect of a floor scrubber...... The product features and functional performance of new trend home appliances cannot be effectively presented simply through the graphic parameters of e-commerce platforms, and the value of offline stores is accelerating its return. "These high-end home appliances and new categories of home appliances are not isolated under the industrial trend of whole-house intelligence, and they must not only be integrated into the family space, but also realize functional linkage. This requires the construction of immersive scenes that are real and landed to stimulate user needs. ”
Since last year, Suning Tesco has focused on the strategy of "opening big stores and opening good stores", accelerated the layout of core stores such as Suning Yijia in the first- and second-tier markets, strengthened the integration of home furnishing and home decoration, and further refined the scene layout of balconies, kitchens, bathrooms and other renovations, so as to enhance the user's sense of scene experience. In the county and town markets, Suning Tesco Retail Cloud also maintained rapid growth, opening 2,686 new stores throughout the year. By the end of 2023, Suning Tesco has more than 10,000 smart stores across the country, covering the city's core business districts, communities, and counties and towns, which can meet users' needs for home appliances, home decoration, and home furnishing renewal in one stop, and has formed a scenario-based sales advantage of "pushing high and selling new".
Taking Hangzhou Suning Tesco Plaza store as an example, the store manager introduced that since the opening of Suning Tesco's trade-in subsidy, 70% to 80% of the stores are trade-in users. Consumers prefer smart home appliances with large capacity, large size, and thinner and lighter. For example, refrigerators with single doors instead of double doors, air conditioners with fixed frequency for frequency conversion, TVs for thinner and thinner stoves, less smoke from stoves, and consumers are more inclined to buy products and complete sets of home appliances in the middle and high-end price segments. According to Suning Tesco's first round of trade-in data, the sales of large-capacity cross-door refrigerators increased by 164%, the sales of large-screen color TVs above 85 inches increased by 185%, and the sales of Casarte built-in refrigerators increased by more than 159% year-on-year.
In the context of the accelerated recovery of physical consumption, Suning.com continued to consolidate its store network by expanding its self-operated stores and retail cloud stores, which not only greatly improved user service capabilities and marketing coverage, but also provided a more professional and efficient channel platform for user consumption upgrading and brand sales structure optimization. In the new round of trade-in, differentiated channel advantages are becoming increasingly prominent.
Focus on user value, one-stop replacement and activate service-oriented consumption
In addition to product price and shopping scenarios, service experience is also an important factor influencing consumers' trade-in decisions. China Household Appliance Service and Maintenance Association pointed out that at present, the consumption of household appliances is jumping from "food and clothing" to "quality", from the pursuit of "product quality" to the pursuit of "service quality", and the era of "service-oriented consumption" is accelerating.
Since the beginning of this year, Suning Tesco has further enhanced its strategic position in user service. At the annual work deployment meeting held in January, Suning Tesco proposed to take user experience construction as the top priority in the core work of the year, and increase investment in "business projects related to long-term brand mentality and service experience". Since then, Suning Tesco has upgraded its service frequently, and during the National Rejuvenation Festival, Suning Tesco upgraded the rights and interests of Super members to visit the store. During the 315 period, nine service commitments were launched, including "7-day no-reason return and exchange in all scenarios" and "30-day price guarantee service".
Under the trade-in policy, Suning.com has further upgraded the "worry-free trade-in" service, and set up a special trade-in area for home appliances in the Suning.com APP and mini program, providing free door-to-door, free disassembly, free handling and other services, and supporting the integration of sending new and dragging the old to provide consumers with a more convenient trade-in experience. At the same time, Suning Tesco has also set up trade-in convenience service points in communities, communities and residential areas across the country. Taking Fujian as an example, Suning Tesco will build 500 trade-in authorized service points covering urban and rural areas, and invest more than 100 mobile vehicles to help consumers replace their products nearby.
In terms of fulfillment timeliness, Suning Tesco has also made its services run out of "acceleration", taking the lead in launching standardized service products such as home delivery, integrated delivery and installation, and next-day delivery, and cooperating with instant retail platforms such as Meituan to provide consumers with a fast delivery experience of mobile phones, computers and other products in as fast as 30 minutes.
"Suning Tesco continues to polish and upgrade service products from the perspective of differentiation, value-added and scenario-based to meet the service needs of users in the whole life cycle of family scenarios", the relevant person in charge of Suning Tesco said that Suning Tesco will accelerate the innovation of consumer experience with the improvement of service quality, so that users "It is easier to go to the old and more willing to replace the new".
At the annual work deployment meeting, Zhang Jindong, chairman of Suning Group, called on all employees of Suning to continue to strengthen the company's adjustment ability and growth momentum, and fight a turnaround battle to the industry and society in 2024.
In 2024, home appliances will become a key category to boost consumption, and the trade-in will inject new vitality into the trillion-level consumer market. Analysts pointed out that Suning Tesco focuses on the strategy of retail service providers, deeply cultivates the main track of home appliances, and continues to improve the ability of commodity portfolio, subdivision scenario operation and logistics fulfillment.