Growth anxiety continues to "deepen", where will the second growth curve of building materials companies be?


In the current environment of uncertain effects such as the epidemic, building materials companies do not want to let go of every possible growth opportunity.From IP co-branded to peripheral product expansion, to category integration to create new explosive products, the difficulty is not only low in cost, but also many changes, and major construction materials companies frequently make strange moves.

Cross-border may go out of the circle, bringing a wave of increased sound volume and extending to the consumer side, which can help products extend to new consumption scenarios and bring consumers a more fresh experience.But looking at the essence through the phenomenon, we find that behind the frequent cross-border crossing of building materials is a deep growth anxiety.

Building materials cross-border itself is to find a new growth path

On the track of building materials, which has a huge capacity and a wide audience, cross-border and integration have never stopped. For example, the increasingly popular whole-house and whole-house customization industries in recent years are typical representatives. In essence, they are the connection and integration of different products and different industrial chains.

At the same time, cross-border CP, IP joint cooperation and other cooperation have also become a marketing style often used by building materials companies.The MIX AND MATCH OF BRANDS THAT HAVE NO COMPETITIVE RELATIONSHIP CAN COLLIDE WITH UNEXPECTED COMMUNICATION EFFECTS. For EXAMPLE, WE HAVE PAID ATTENTION TO THE CROSS-BORDER LINKAGE BETWEEN Dongpeng AND ELLE &ELLE DECO. On THE ONE HAND, IT CONVEYS THE UNBOUNDED CULTURAL VALUE OF DESIGN, AND ON THE OTHER HAND, IT ALSO CONVEYS Dongpeng'S BRAND IMAGE UPGRADE FROM MANUFACTURING TO CREATION; I HAVE ALSO CO-BRANDED WITH THE "Meet Raphael" ART EXHIBITION TO CREATE A HIGH-END CIRCLE-level HOME FURNISHING CULTURE, WHILE FURTHER CONVEYING MY "ORIGINAL ATTITUDE" TO THE PUBLIC; The Pearl of the palm and THE ARTIST Wang Xuetong jointly LAUNCHED the "Color Perception Life" ILLUSTRATION WORKS, AND APPLIED THE ILLUSTRATION TO THE HOME DECORATION SPACE, WITH ART AND DISTINCTIVE PERSONALITY. The dialogue of Generation Z.

The entire market environment is showing a youthful trend. Brands must break through the stereotypical perceptions of mass consumers based on the long-term. Co-branded products seem to be an efficient way to break the circle.

The cross-border combination of multiple brands is like cooperating to complete an innovative dish, packing it and delivering it to consumers to help customers change their appetites, but the reality is: sometimes consumers may not buy it, and new dishes may face a “short-lived” dilemma.

Even so, building materials companies are still happy with the strategy of strong cooperation and cross-border integration. Why?

Regardless of the market sales of co-branded products, judging from the reputation of the cross-border joint strategies of major brands alone, every cross-border joint venture can always attract a certain degree of attention to the topic, and the increase in brand voice is obvious.In this regard, we are concerned that in the first half of this year, many large residential companies have similar cross-border joint and cross-border cooperative marketing actions. For example, in the marketing deployment of 315 this year, Fusenmei launched the “Fusenmei+ Caramel box + Wild Luxury” cross-border market, linking wild luxury brands and rv brands across borders, causing huge volume.

In fact, the most direct purpose of building materials cross-border is still brand marketing.Especially for some relatively mature building materials companies, the brand impression they bring to consumers is already too deep, which has led to the formation of an inherent awareness of them by mass consumption, and it is difficult to form a new memory point no matter how the original product is promoted.Especially at the moment when the younger generation has become the mainstream consumer group, companies must break the stereotypical perceptions of consumers and subvert the old image. As a direct carrier, products must be fashionable and creative. At the same time, communication methods should be curious, catch the attention of consumers, and realize the dual product +brand out of the circle.

And if you delve deeper, the meaning of cross-border is much more than that.At present, due to the downward economic environment and repeated epidemics and other factors, the operating pressure of the building materials industry has increased exponentially.In the face of plummeting profits, most companies need to shrink costs, and at the same time hope to find a new growth path.

However, the heavier reality is that even without considering the epidemic factors, building materials companies generally have heavy growth anxiety.In the past 2021, most of the leading companies in the home building materials industry have actually maintained double-digit growth, and this growth rate is not low in the long development of the entire industry.However, the anxiety of these leading companies is greater than ever before. They are subject to uncertainties such as the epidemic and the economic environment. The old system, the old development model and the new development trend are mutually exclusive. Even if they have been exploring a new growth path, it is difficult to form a systematic competitive advantage in a short period of time. The corresponding original competitive advantage is lost a little bit, and the need to invest more energy and resources to find new breakthroughs means that the cost is higher, which will cause a sharp decline in profits.

Even large companies with strong strength and sufficient funds are also feeling difficult, and small and medium-sized enterprises are undoubtedly in a more dire situation.In this regard, Shi Zong, chairman of AIA, analyzed and said: “The current downward economic pressure has increased, and the company's business has been hit by multiple factors and its growth has stalled. In order to alleviate the negative impact of the stagnant growth of the main business on the development of the company, the company needs to consider cross-border search for new growth breakthroughs.”

In addition, terminal distributors have a harder time.There has been a saying in the industry that the average life span of a building materials store is about 2.7 years.The brand is aging, the profit model is single, the innovation is insufficient, and the competitiveness is declining......They are always vigilant and urge building materials dealers to continue to innovate if they want to move forward.

Whether it is the stable development stage before the epidemic or the complex and uncertain development period under the epidemic, building materials companies and building materials distributors urgently need to find new growth channels to achieve sustainable growth.

The underlying logic behind the new growth path of building materials brands

How to find a new growth path?Before discussing this issue, it is necessary to take a look at the main channels of performance growth of building materials companies.Referring to the investment conclusion of Guoxin Securities, the building materials growth formula = same store growth + new store expansion + new brand incubation (second growth curve).

Same-store growth means the growth of stock store performance, and the tastes of building materials consumers will not change drastically in the short term, so once the potential energy of building materials brands is established, the growth certainty in the next 3-5 years is very strong.At the same time, building materials brands will also accelerate their expansion and open new stores during such a strong development period.

Through a large number of store openings, the consumer experience can be improved, and rapid expansion will also allow companies to gain a large-scale competitive advantage and promote brands to occupy more market share in a wider region.Like Sophia and Opai, they are typical of building moats on a large scale.

However, in the prosperous building materials consumer market, users have many choices and prefer to taste “new”, and their loyalty to the brand is not high, so the growth of the same store can easily touch the ceiling. As for the opening of new stores, with the expansion of the scale, it may also face dilution of passenger flow, increased competition between different stores of the same brand, declining single-store profits, and store management/risk control capabilities that cannot keep up.

Based on these, companies have naturally focused more on the incubation of new brands, and by incubating new brands, they have brought about the second or even third growth curve. There have long been water testers in the building materials industry.For example, Midea established Tianniu in the sinking market; Shangpin home delivery made efforts to complete the package and launched the Christmas bird package; Gold Medal Cabinet invested in the establishment of a subsidiary Gold Medal Jujiayun package; Haier launched brands such as Casadi and Commander for different market segments; Midea has also released or activated a number of brands including Bugu and Hualing in recent years.…

Looking at these initiatives, it is not difficult for us to find a trend-home furnishing companies have moved from the past road, crowded with bees, and imitation to a new pattern of multi-category and multi-brand operations with blooming flowers.This is actually determined by the market. The speed of change in the consumer market is too fast, and the choices on the consumer side are more diverse, while the supply-side market has many participants and the market is becoming more dispersed. Therefore, after reaching a certain stage of development, enterprises need to achieve a large-scale increase in overall revenue through multi-brand intervention in a multi-business form.

However, overall, the building materials industry has successfully incubated new brands, and there are still relatively few successful cases where new brands have brought strong revenue increases.

The incubation of a new brand is more like a medium- and long-term goal. The ultimate foothold of the brand still belongs to the product. Therefore, instead of incubating a new brand, it is better to try the innovation and reshaping of products and categories first, and take the first step to create a new growth curve.There is a typical Opai home furnishing here. It started with cabinets and continued to extend to the doors, windows, and bathroom wall decoration business. Before multiple categories became the mainstream, Opai can be said to have taken the lead early.

On the one hand, product reshaping and innovation are based on the product parent body and carry out product innovation by themselves, on the other hand, through cross-border cooperation and cross-border integration, new products and categories that meet new consumer needs are formed.

It is worth noting that different products have different expansion ceilings. “High frequency, just demand, and massive volume” are typical characteristics of good products and categories.Only with good products and categories can it be possible to establish a brand image and help companies run out of new increments.

In the sufficiently decentralized market of building materials, consumer needs are always diversified.When you play a game with a competitor, he only has one hole card, but you have a deck of cards in your hand. Although these cards may not be useful, the chance of winning is always much greater.

There are new ideas for the growth path of building materials

In fact, in addition to products, there are still many directions that building materials companies can explore and think about in different dimensions such as channels, models, and scenarios.

For example, in terms of channels, the expansion of new media social channels under the epidemic has become a new battle for building materials brands to seize traffic.

In terms of models, individual powerful building materials have already tried their luck in the field of outbound investment.

In terms of scenarios, it is not impossible for brand concepts and lifestyles to be attached to products and sold to consumers.Integrate into a variety of life-oriented themes such as trends, drunkenness, and reading, and stimulate product growth through the diversification of scenes.

Wu Xiaobo said: "If an enterprise can maintain rapid development for decades, its development path must not be under the same logic, but continuous self-transcendence.”Today, we are in a complex environment, and no one can predict and make judgments and choices through predictions.Some people choose to repeatedly dig deep into their own "growth bottom line”, hoping that “old trees will sprout new shoots”; some people tend to cooperate with other people across borders to leverage their strength to achieve terminal lightweight and expand the target circle; some people try to extend categories and channels, seeking a wider range of application scenarios.....Where will the ending of the building materials growth story go?We hope that through time and practical demonstration, we can make our building materials brand see more clearly and clearly, and find a second growth curve that really suits us.

Text: Doors and Windows Online-Maru Wanwan

飞龙门窗

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