Countless Chinese who have been pinched have now been ridiculed and closed down, and the former washing machine king is making a fortune overseas
Author|Mu Jiujiu
Relying on the old routine, the king of Chinese washing machines is on fire.
In January this year, a Henan netizen posted on social platforms that he had used the Weili washing machine for 26 years, and the video said "What year is the washing machine! Subsequently, the official Weili appeared in the comment area to say that "it has not gone bankrupt, it is still persistent", and gave the netizen a new drum washing machine for free. Suddenly, this 26-year free replacement event appeared on the hot search of major platforms.
Time back to 17 years ago, also in the cold winter of January, in the Zhongshan Shandong Lingweili Electric Appliance Co., Ltd. held the "Challenge the International Age Standard" activity, the declining power because a washing machine has been used for 20 years and is still running normally has gained attention again.
It's just that with the current speed of Internet communication, the feedback that Weili has received this time is more "violent". It is understood that after the video became popular, the number of fans of the official account of Weili Douyin soared from hundreds to 400,000, and the scale of online sales increased by 10 times.
Of course, in response to this sudden explosion, there is no shortage of "deliberate" doubts from the outside world, but what we should really pay attention to is that as the "big brother" of the washing machine industry in the past, why was Weili ridiculed and went out of business, how it made a lot of money abroad in recent years, and how to win 3.5 billion yuan, and how to inherit this wealth in the future.
01 Defeat the enemy with one move and become the king of China's washing machines
In 1979, at the Shiqi Agricultural Machinery Factory in Zhongshan, Guangdong, a group of workers removed a washing machine from a scrapped foreign ship. Under the leadership of Xu Jihai, several blacksmiths knocked and studied, groped and studied, and successfully "reproduced" a washing machine.
At that time, domestic washing machines were still in the embryonic stage, and the national output was less than 10,000 units. Realizing the business opportunity, Xu Jihai led the workers to produce the first batch of "white brand" washing machines in the agricultural machinery factory, and they were quickly sold out.
The following year, the agricultural machinery factory was renamed "Weili", focusing on the research and development and production of washing machines, and Xu Jihai, who had outstanding contributions, was elected as the director of Weili washing machine factory.
After that, in just a few years, China's washing machines ushered in a rapid development. In 1984, the national output of washing machines has reached 5.78 million units, ranking among the major washing machine producers.
Photo source/Pixabay
During this period, WEINIG relied on its own two-cylinder washing machine to set off a wave of sales across the country. In 1986, the double-cylinder washing machine became the first product in the national washing machine industry to pass the national quality certification.
However, within a few years, the domestic washing machine market tasted the consequences of disorderly development, with overproduction and backlog that was difficult to sell. According to the information provided by the relevant state departments at that time, only computer-controlled automatic high-end washing machines had a national production capacity of more than 800,000 units by 1990, but the actual production was only more than 300,000 units, and the sales volume was only more than 100,000 units. In other words, 2/3 of the production capacity is not being used, and another 2/3 of the products are backlogged.
In this context, the WEINIG washing machine has sprung up. From 1989 to 1996, the production and sales of washing machines produced by Weili ranked first in the country for 7 consecutive years, accounting for 20% of the total output value of the industry in the country for 4 consecutive years, and ranking first in the country in various economic indicators for 5 consecutive years. In 1994, WEINIG's annual sales reached 1.636 million units, setting a record in the history of China's washing machine industry at that time.
When the whole industry is sluggish, and even foreign washing machine brands can't sell, Weili can stand out, and its charm can be seen. And all this is no longer limited to washing machine technology, but the guarantee of after-sales service, as well as the effective marketing and channel growth strategy of the enterprise.
In 1989, after a survey of the domestic market, WEINIG found that household washing machines in large and medium-sized cities were nearly popular, while the penetration rate in rural areas was less than 10%. Based on this, WEINIG initiated a major shift from urban to rural areas.
In order to successfully penetrate into rural areas, Weili seized the army of "new city people", and advertised on CCTV with "gifts for mothers" as the highlight, thus arousing the filial piety and love of this group of people, and sending tens of millions of units to farmhouses and mountain villages. To this day, the "fault" strategy of the Weinig washing machine is still regarded as an example in the history of Chinese marketing.
Image source/network
Of course, the support for the success of emotional marketing is the guarantee of product quality. For example, the automatic double-cylinder washing machine produced by WEINIG will have individual short circuits and burn-in due to different voltages across the country, even if it is not the quality of the product itself, WEINIG also insists on returning all sold and unsold products in stores and warehouses for refund.
On the basis of quality assurance and proper marketing strategy, Weinig washing machine was awarded the title of "China Washing Machine King" by the National Bureau of Statistics in 1995.
02 After several stumbles, the power "fades" the power
In 2005, Dongling Kaiqin acquired Weili at a price of 150 million yuan.
Judging from the status of the former power, this acquisition is purely a "marriage" move, but looking back, this is already a good ending for the ill-fated power.
In fact, since 1997, the washing machine has been in decline, and the following year it has been in full decline, and its leading position has not only been overtaken by its rivals, but also left far behind. At the turn of the century, the production of WEINIG washing machines was less than 800,000 units, half of which was at its peak.
According to media reports, at that time, Weili was in debt of more than 1.6 billion yuan in just a few years and had to lay off employees to "save itself". Around 2000, the number of employees of Weili has been reduced from more than 4,000 to more than 1,400, and the number of middle-level cadres has been reduced from more than 120 to 40, and the number of layoffs is as high as 65%.
Although the washing machine market was close to saturation and the competition among major brands was fierce, in the eyes of the outside world, the power of the industry giant had certain advantages, and its performance took a sharp turn in a short period of time and fell off the altar, which is not in line with market logic.
Volkswagen then tried to analyze it, believing that the decline in its performance was the result of two missed growth opportunities. For example, when the automatic washing machine was rising in the 90s, Power did not take advantage of the victory and stuck to its own two-cylinder washing machine, thus missing the opportunity.
At the beginning of the 21st century, Weili missed the drum washing machine for the same reason, and since then it has completely lost its voice in the field of washing machines.
However, for the decay of the Weili washing machine, Xu Jihai himself, including the internal high-level of Weili, has always claimed that it was brought by air conditioning.
In the face of the air conditioning boom in China in the early 90s, Weili invested 260 million yuan to build a large-scale air conditioner factory in 1993. The senior management of Weinig Group later reflected that at that time, the production line and a large number of accessories of Weinig air conditioner had to be imported from Japan, which was costly, and on the other hand, due to the lack of introduction of core technology, Weinig's air conditioner had quality problems and became a heavy burden.
But according to later media reports, WEINIG's air conditioning business was stranded as early as 1994, when WEINIG washing machines were also on the rise, which is hard to believe. As for other specific reasons, most people familiar with the matter at the time avoided mentioning them.
Photo source/Pixabay
In 2001, in order to get out of the predicament, Weili Group was restructured into a private enterprise, and Xu Jihai served as the chairman and general manager of Jintai Washing Machine Co., Ltd., which leased all the plants, equipment and brands of the original Weili Group at a monthly cost of 2.5 million yuan.
After that, Xu Jihai, who was full of confidence, started the exploration of new business lines, trying to create another "power" on the mop washing machine. It's a pity that in the end, there is no trace of water.
At the same time, the business legend Deng Miaoke entered Jintai and "revitalized" the air conditioning business of that year in just one year. In 2002, WEINIG achieved sales of 300,000 units. In that year, at the Weili air conditioning distribution meeting, it also won 100,000 air conditioners and 450 million overseas orders in the second year.
In addition to this, Dunmiko also brought in international funding. A Singapore-listed company dealing in home appliances injected US$2 million in start-up capital into Weinig Air Conditioner, and the other party promised to continue to inject a total of RMB 200 million into Weinig Air Conditioning in the next three years.
Seeing that everything is improving, there are remarks of "Xu Deng discord" within Power, and Deng Migaard's resignation has put the brand in turmoil.
It wasn't until 2004 that the power washing machine appeared in the public eye again, that is, "married" Kelon.
In October 2004, Kelon Electric announced that Kelon planned to inject 160 million yuan into a joint venture with Zhongshan to establish "Guangdong Kelon Weili Electric Appliance Co., Ltd.", but unfortunately in the end, Gu Xiaojun failed to inject capital as agreed, resulting in the acquisition of the real name.
Until the next year, Guangdong Dongling Kaiqin Group acquired Weili for 150 million yuan.
03 The power is still "mighty", and overseas makes a lot of money
Prior to the acquisition of Weinig, Dongling mainly focused on the small household appliance market in Europe and the United States, and its products included electric kettles, bread machines, microwave ovens, electric irons, coffee machines, etc. In 2004, Dongling's exports reached 2.5 billion yuan.
In comparison, its domestic sales were less than 200 million yuan that year. Therefore, Dongling won the power, and the outside world speculated that it may intend to attack the domestic market.
It's a pity that the market direction has changed too quickly, and the home appliance industry has long been full of competitors, Dongling Power has never been as desired, but faded out of sight in China.
In fact, since the acquisition, Dongling Weili has also followed and opened up the track of small household appliances, including the R&D and production of Western-style small household appliances such as ice machines and ice cream machines. At the same time, it also increased the kitchen appliance business to balance the pattern of large and small household appliances.
At present, Dongling Weili has formed three major industries: washing machines, microwave ovens, and kitchen refrigeration appliances, and at the same time brought domestic head microwave oven brand OEM.
In 2021, Dongling Weili began to try cross-border e-commerce business and founded its own overseas brand Kumio. Today, it has 40% of its cross-border business in Europe, 25% in the Americas, and also in Asia, the Middle East and Africa. According to 36Kr, the company's export revenue alone will reach 3.5 billion yuan in 2021.
For this popularity, it may be a powerful tool for Weili to re-establish brand awareness and open up the domestic market.
Of course, there are also doubts among them, such as the "coincidence" that some netizens are located in Henan according to the official Douyin IP of Weili, and the netizens who broke the news are also from Henan, speculating that this is a marketing campaign under the slogan of "revival of domestic products".
But it is also undeniable that for the old domestic brands that cannot keep up with the times and are declining, they do need a chance to stand in front of the stage again. And this, in addition to waiting for the occasional "splashing wealth", can only be more marketing.
However, after the traffic, how to undertake domestic brands and maintain stable growth is a problem. For example, it can be seen with the naked eye that after a few months, the official popularity of Weili Douyin is obviously not as hot as it was in January.
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