When an opportunity is presented to everyone, it can only be called a crisis. The decisive battle in the third- and fourth-tier cities has become a topic that paint company bosses, sales staff and dealers must mention in recent years. The third- and fourth-tier cities are at a relatively low stage of urbanization development, and the market space is extremely broad. Previous adjustments to electricity prices have failed to change the basic trend of PPI. Therefore, entering the third- and fourth-tier cities has almost become a consistent path for industries such as building materials, home furnishings, and electrical appliances.
In recent years, the purchase restrictions in large cities have reserved space for the development of third- and fourth-tier cities, and also provided a good opportunity for the paint industry to sink its channels. In just three or four years, the paint industry has vigorously expanded county and township channels, from first-tier cities to second-tier cities, and even to third- and fourth-tier cities. The speed of its sinking is amazing. This is of course the result of keeping up with the pace of real estate. The feast of the third- and fourth-tier markets has just begun, but the field of competition is already crowded with too many competitors. The supporting role of the third- and fourth-tier markets for the entire market has not yet been revealed, but it has already weakened. But many realities tell us that the beautiful imagination of the third- and fourth-tier markets must be broken, because channel sinking is the magic weapon for enterprises or businesses to cope with the current market weakness, but I am afraid that the third- and fourth-tier markets are not cakes for many enterprises, but chicken ribs, or even just pie in the sky to fill their stomachs.
The way to maintain the stable growth of China's economy depends on urbanization and expanding domestic demand, and third- and fourth-tier cities are the main force. But there are at least two risks here.
First, real estate overdraft.
There are not too few houses in China, but too many. Look at the high-rise buildings on the land of China, which are lined up one after another and are constantly involved. The editor believes that the blind and rapid development of urbanization has overdrawn China's real estate industry expectations. In essence, our urbanization process is the product of power and capital forcing the growth of seedlings under land finance. It is not a social law of natural growth. Its essence is the pursuit of real estate for huge profits. I think that the high inventory and vacancy rate may bring the real estate industry into a decade of depression.
Second, weak domestic demand.
We pin our hopes on boosting domestic demand on so-called urbanization. However, without a distribution strategy that is oriented towards common prosperity, can we increase the income of urban residents simply by relying on urbanization? Do the third- and fourth-tier markets really have as much consumption potential as we imagine? The wealthy pursue abnormally high consumption, while the huge number of low-income people consume low-end consumption on a large scale. The M-shaped social structure has been formed, and such a consumption structure does not really contribute enough to boosting domestic demand. Moreover, in the economic winter, people's consumption generally tends to be conservative, and their willingness to buy new houses or renovate old houses is bound to be greatly reduced. Based on this, the third- and fourth-tier real estate itself is difficult to protect, and it may not be able to save the coatings industry.
Of course, not all third- and fourth-tier markets are so bad. There are differences between regions and the market space is large or small. However, due to the general real estate bubble and sluggish domestic demand, the third- and fourth-tier markets can not only be reservoirs, but also unclear black holes. As an intermediary connecting production and consumption, channels have become the channel for enterprises to extend to the third- and fourth-tier cities. Channels often perform more drastically in market changes. After all, whoever controls the access can control the market. How to quickly take root in the third and fourth tier cities, enterprises and merchants can be said to have their own ways and tricks. Among them, some enterprises have cultivated channels intensively, invested a lot of manpower and material resources, and spent huge channel costs to improve the company's control over channels and enhance the dealers' operational capabilities; some enterprises have weak support for third and fourth tier dealers, and basic promotional materials are not available. In addition to urging dealers to pay and ship, the rest of the time is to let dealers fight alone and survive on their own; some companies' sales plans are basically based on past experience and numbers, and they lack the awareness of channel expansion and deep cultivation, let alone establish a mature marketing and promotion model.
How to win a share in the environment of weak third and fourth tier markets, congested channels, and fierce competition, enterprises and merchants need to think more about the fate of cost factors in the crisis, and look at the third and fourth tier markets calmly and rationally.
