Two weeks after the Spring Festival holiday, it should be the peak season for mobile phone sales. Thousands of mobile phone channels and retailers across the country are rubbing their hands and waiting to start work, but the outbreak of the outbreak has poured cold water on the market. In the face of the spreading epidemic, large and small mobile phone brand stores have announced delays in opening after the festival. On February 1st Apple officials announced that it would temporarily close all direct stores in mainland China until February 9.
Journalists . . . Lu Keyan
Edited . . . Song Jianan
Shortly thereafter, Samsung China’s largest flagship store in Shanghai announced it was closed until February 9.
Domestic brands also had to close stores to avoid the outbreak. Previously, including OPPO, vivo, Xiaomi and other brands have announced the extension of some areas of the opening, currently in the serious areas, many brand stores to resume opening time is still not fixed. In addition to the above-mentioned brands, as of February 14, although a small number of stores have opened, but the vast majority are in a state of suspension.
This has undoubtedly caused a considerable impact on mobile phone manufacturers. Offline has been an important battleground for both, as has Huawei, which emerged online last year. Brands that started on the Internet earlier also accelerated offline layout in 2019: Xiaomi opened more than 100 new stores late last year, and now has more than 6,000 stores;
Even if the new crown is brought under control in late February or March, Chinese smartphone shipments will fall 30 percent in the first quarter and 5 percent lower than expected for the full year 2020, according to a new report from Strategy Analytics. Guo Mingyu, an analyst at Tianfeng Securities, is more pessimistic, saying that shipments from the domestic mobile phone market will fall nearly 60 percent year-on-year during the spring and drop 15 percent for the full year.
The entire mobile phone industry chain has been shrouded in the haze of the epidemic, once laid a large line down the river as thin ice.
Manufacturers lose money, channels out of stock
Channel merchants first sniffed the crisis.
Chen Jinwang in China Qiangbei for five years of mobile phone channel business, his stall opened in the Longsheng communications market. According to the previous year’s market, the Spring Festival holiday is the hottest time of the year, but affected by the outbreak, Huaqiang North mall announced after February 18, Longsheng was directly postponed to March 6.
Not opening means no money to make. Although Chen Jinwang’s goods are mainly online channels, but this year’s Spring Festival sales still make him feel not optimistic. “Basically cut my business in half. He said.
Compared with the business cold, now more let Huaqiang North many channels are anxious about the lack of supply. On the one hand, the mall closed, the store for the next high season hoarding inventory can not be raised. On the other hand, the Hong Kong Government announced the closure of the four major ports to Shenzhen, which is an important purchase channel for many channels in North China, and the “sealing” has led to no goods to enter and “one less”.
The domestic mobile phone market will also face shortages in the first quarter as the upstream supply chain delays the resumption of work. Correspondingly, the price of machines in the hands of channel providers also ushered in a small increase in the overall. Chen Jinwang is currently stepping up from the hands of peers to find goods, hoping to temporarily make up for the shortage of supplies. And Chen Jinwang the same channel business there are many, he added more than a dozen Huaqiang North WeChat group from time to time pop up looking for goods news.
“Very few people now specialize in offline, basically most of the line, a small part of the line off the line. “A channel vendor in the group told The Interface News that although the overall consumption of the Spring Festival has become less, but online income is enough to keep him through the epidemic.” What he is most looking forward to now is the opening of Huaqiang North so that he can clear the hundreds of units he has in the store.
Daniel Lves, an analyst at Wedbush Securities, said the outbreak in China has limited traffic in major cities and significantly declined in traffic in cities such as Guangshen, north of the country, delaying sales of 1 million iPhones in major cities from the first quarter to the second quarter. Guo Mingyu analysis, the current market has nearly 60 million mobile phones out of stock.
Zhang Hang, marketing director of a district in east China, told The Interface News that in his jurisdiction, the Spring Festival was a net profit of 500,000 in previous years, and sales of the Spring Festival fell 75% from last year, plus the cost of rent and personnel, directly led to a loss of 200,000 yuan.
Zhang Hang is responsible for the jurisdiction has nearly half of the foreigners, generally during the New Year has two consumer flashpoints: before the festival home and after rework. Zhang Hang revealed that pre-festival sales are basically unaffected, but the post-festival flashpoint is far from the end. “Based on the current outbreak, there will be no significant aggregate consumption even if returning to work. This node is basically obsolete. “
Store traffic plummets, fear of closing stores
Losing a node can essentially drag down the store’s full-year performance.
“The impact is limited for our manufacturers, after all, our operating costs are not particularly high, but it is a blow to our stores. Zhang Hang helped the store calculate an account: “according to a slightly better business couple shop to calculate, compared to previous years, this year’s Spring Festival mobile phone sales business on the profit of nearly 40,000, in addition to bear the loss of operator business and rent, can be considered as a loss of 560,000, which is close to one-fifth of their annual income.” “
Zhang estimates that the damage is still within the reach of many shopkeepers, but for some smaller retailers, a further month is the limit of life and death – they not only bear tens of thousands of dollars in store rent, but also bear hidden losses. Because of the large inventory backlog, once the first quarter of new products are released, the existing old machines will be more difficult to sell.
Gu Hua, director of a Huawei authorized experience store in Guangxi, shares the same anxiety.
Gu Hua’s shop is open in a well-known shopping mall in Guangxi, the shop in the past, the flow of visitors mainly rely on surrounding residents and shopping mall customers. Since the local control measures became more stringent, the flow of visitors to the mall plummeted by 90%. In the past, the store sold 15-20 units a day, but this time it slipped to just a few units, and even one day the turnover was 0. She estimates that she earned at least 30,000 fewer this Spring Festival.
All along, Huawei has a certain standard of assessment of stores, and monthly sales of the number of library is also part of the assessment, Gu Hua has also worried that stores in the haze of the epidemic difficult to meet the standards. Fortunately, in view of the impact of the outbreak, Huawei has made some changes to the standard of the store’s assessment: in the past, under the prescribed number of pick-up, the store must reach a certain amount of sales, but now the store can according to the sales situation, the number of pick-up, to a certain extent to ease the pressure on the store.
In fact, as more and more people develop online consumption habits, mobile phone line brick-and-mortar business is becoming more difficult to do. A few years ago, operator subsidies and manufacturer subsidies were important sources of profit for stores. However, due to the declining revenue and profits of operators, can only further compress marketing costs, coupled with the mobile phone market is also accelerating the reshuffle, in order to protect themselves, manufacturers of channel subsidies are also decreasing.
In such a situation, stores can only sell mobile phones to earn the difference, but the market as a whole is not depressed. According to Canalys, china’s smartphone market shipped 85.3 million units in the fourth quarter of 2019, down 15 percent from a year earlier, but also contributed to the 11th consecutive quarter of declines in the chinese smartphone market.
The market expects 5G to bring a wave of change, with many retailers pinning their hopes on 2020, but if it is delayed, Zhang is concerned that the industry will see a wave of closures.
Looking for a way out, WeChat sells
In response to the difficulties of specialty stores under the influence of the epidemic, major mobile phone brands have introduced subsidies to help downline brick-and-mortar stores through the difficulties. It is reported that vivo in some areas also began to according to the past sales of store staff and the length of service to give wage subsidies, additional red envelopes and so on. According to the interface news understand, individuals can get the cumulative subsidy of hundreds of dollars.
“It’s a little bit harder, but we’re also finding our way. Gu Hua said that in addition to waiting for the outbreak to pass, brick-and-mortar stores are also opening up Huawei’s resources with the mall side, hoping to implement some online and offline sales programs. For example, on the mall side, with Vientiane City’s online members to carry out bundled drainage, and on the Huawei side, consider using the company’s resources for live delivery, near the store delivery, thus speeding up turnover inventory.
Gu Hua said that under the impact of e-commerce, even if there is no outbreak, this combination of online and offline marketing exploration will be the inevitable trend of physical store development. In her view, if these resources can be actively accessed, the store is enough to survive the outbreak. But in more remote counties and towns, many small and medium-sized retail stores can get little resource support, only self-help.
In Xinhua County, Yandi City, Hunan Province, Yang Wei, a mobile phone guide, is worried about business. Her hometown was closed because of the outbreak, so she has not been able to return to the county to start work.
Helplessly, she can only rely on the usual accumulation of customer contacts, on WeChat to sell mobile phones. From the Spring Festival to now, she has been online to organize product information, do WeChat guide. Yang Wei told the interface news, because the county circle is small, by virtue of the word-of-mouth recommendation between customers, there are also people willing to place orders directly from WeChat. Although the business is not comparable to last year’s Spring Festival, but one or two a day can deal, coupled with the recent emergence of some customers anxious to buy tablets, to a certain extent to make up for some business gaps.
“The biggest lesson of this outbreak is that I can no longer sit in the store and wait for customers to come in. Ms. Yang says she and her peers are starting to build a personal customer database, ready to maintain relationships on WeChat from time to time. At the same time, the store further increased the promotion of the short video platform, the store manager’s own planning, shooting content, but also accumulated a small few hundred fans.
IDC issued the outbreak on the Impact of the New Year mobile phone industry report analysis, because in the short term, some users of online purchase machine shopping in the original habit of offline purchase, but “forced” to turn to the online crowd, if this part of the population can obtain a relatively good experience in online shopping machine, the future will be expected to spread and continue online consumption habits. As a result, offline brick-and-mortar stores can only improve competitiveness by strengthening services and operations.
For offline brick-and-mortar stores, the Spring Festival, May Day, 11th, winter and summer vacations are small peaks, lost a peak season retailers can only put all their hopes on the next flashpoint. “We’re watching the news of the outbreak every day and waiting to get better. As long as it lasts until May Day, there is still a rescue in this year’s business. Yang said.