Race With IKEA -- Reflection On The Development Of Shenzhen'S Home Business

In April 16, 2008, Sweden's IKEA Shenzhen store, the world's largest home chain brand, was officially opened.

A "wolf come" in the sound of the cry of 2007, golden seahorse, a hundred years of ambition to seek an ambitious listing, a bright future, this year, suddenly cold - the macro aspect, the April CPI index up to 8.1, the government strictly controlled investment behavior; hard demand, the high related property market into the adjustment channel, 08 years 1 to April the city's residential area of only 2 million 299 thousand and 100 square meters, the total 23162 sets.

High cost, high financing threshold, tight market demand, and IKEA's attack, Shenzhen's home market is facing a shuffle.

There are two kinds of arguments among the people: one is "the wolf is really coming," and the other is a "B&Q".

(when B&Q entered Shenzhen in the same year, it also caused panic in the industry. But it turned out that the local enterprises had the advantage of localization and could not be replaced easily. Then, how should we view this disparity?

First of all, from the perspective of competition law, only by running with the strong can the strength be improved.

IKEA is a terrible opponent, and also a good "escort runner".

Choose the starting point, re establish or strengthen their own positioning, competitive edge will also be eliminated in the invisible.

Xinghe third space is located in the middle stage above the high income group, lock the villa owners, greatly opened up the gap with IKEA customers, not only avoided the confrontation with the strong opponent, but also rely on the combination of scarce treasure, freehand space and other scarce brands, firmly occupy the high-end position of the industry jungle.

The third space is far sighted positioning operation is worth learning from the industry.

Second, the local marketing awareness of all aspects of baptism.

Traced back to the logic of the rise of Shenzhen's old home retail brand, "good hundred years" and "golden seahorse", like other retail brands in Shenzhen, have caught the strategic opportunities of childishness in the development of cities and industries.

Shenzhen is a city built on a deserted village. The history of the 25 years of the special administrative region is a history of building a great deal of land. This gives the home retail brand a golden opportunity for development.

In order to fight for market share, businesses are rapidly increasing in terms of "scale plus price", and "good hundred years" and "golden seahorse".

With the saturation of the industry, especially the entry of strong brands such as IKEA, this original competition mode will be replaced by the competition mode of "four combinations of design, price, scale and efficiency".

Under the new rules of the game, it will be a very tough challenge for the low end home retail brands which are hard to compete with scale and efficiency for brand and design deficiencies.

It will force domestic retail brands to pform marketing thinking and reshape the competitiveness of enterprises.

Third, it raises the thinking about the profit model.

As mentioned before, Shenzhen's home retail business has grown up in a special historical environment. It can be said that "success is too easy", and the whole industry is permeated with impetuous breath.

The cake in the home market continues to grow and profits are constantly thinning. Many people are looking for new profit growth points.

2005 can be regarded as a watershed. During this period, a number of enterprises sniffed the business opportunities of high-end home, so the US X savors home, MYHOME and Bailey X.

It is confusing that no matter how much advertising is spent and how much publicity costs it costs, the management is not ideal.

Where is the blue ocean in the home market?

In contrast, IKEA, despite its first arrival, has been selling more than its local brand for a week.

Many years of painstaking old customers switch to IKEA, so that local brands can not help worrying.

A reporter from Shenzhen Commercial Daily has summarized IKEA's profit pattern as follows: first, self built shop profit.

Where IKEA has arrived, the value of its property has increased continuously, and the value of IKEA property has increased. This is the most concealed and very substantial income.

Local enterprises often make "two landlords" to earn rent differentials; second, reverse the control of production enterprises by retailer's channel advantage. The pricing model starts with "price tag design", which compresses the profits of upstream suppliers to the maximum extent.

This is an invisible profit.

Shenzhen's local brands also want to go upstream, but they do not have the strength of IKEA.

Third, profit from terminal sales.

This is the most obvious profit.

IKEA adopts the strategy of parity competition, "creating a better life for most people".

Parity is the sharpest market butcher knife. Although its profit is small and strategically significant, Carrefour and WAL-MART have reached the top of the world wealth list.

Unfortunately, local enterprises have not yet jumped out of price competition.

Profit model is the foundation of making money.

Apart from Xinghe third space, how many properties do you own in the local home retail brand?

More worried about the upstream integration strength of the home retail brand giant.

But challenges are accompanied by opportunities.

In the era of diversified consumption, Star River Third Space in the local home camp seems to have found its own competitive mode, and other retail brands should also find their place.

The important thing is to race with IKEA from now on!