Talking from Zhoushan Croaker
For many years, the Chinese like to eat yellow croaker, especially wild yellow croaker, which is the most delicious memory on the table when we were young. In order to capture more wild yellow croaker and earn more money, Chinese fishermen have adopted a savage "cropping operation" in which dozens of boats knocked together bamboo planks to produce two otoliths in the yellow fish skull. Resonance, big fish, and small fish were dead together and they were all gone. This type of extinct fishing caused the catch of yellow croaker to reach a record 197,000 tons in 1974, and it also caused devastating blows to wild yellow croakers. In 1994, the catch of yellow croaker dropped to 20,000 tons. Since entering the 21st century, there have been almost no fishes in China’s coastal areas. China’s top ten fishing grounds all exist in name only, and wild large yellow croaker has almost disappeared.
Not only the fishery resources, China's forest resources also experienced devastating deforestation. When traveling to countries such as Sweden and Norway, I often ask myself one question: Why did the ancestors of the family left behind the green mountains that covered the forest, and our ancestors left bare barren hills? Later I learned that these countries have strict legislation. After harvesting trees, they must plant the same number of small trees to keep the forest going.
So, the question is not what our ancestors left us, but whether we have enough wisdom to maintain a good ecological balance, not only to turn these resources into wealth in our hands, to benefit mankind, but also to protect these. Resources leave behind sustainable capital for future generations.
"Industry ecology" is at stake
The same is true for the development of the Chinese compressor industry. Taking the screw machine as an example, from 2001 to 2011, the development of twin-screw compressors in the Chinese market went through a decade of gold, with a compound growth rate exceeding 30%. However, due to the eagerness of the industry for quick success, the frenzied expansion of production capacity has caused a serious imbalance between supply and demand. According to statistics in 2014, there are a total of about 500 compressor companies in the country, and more than 200 host production enterprises, of which the production capacity of screw compressors has reached 400,000 units and the stocks have reached 150,000 units. In 2015, the domestic market demand was only 150,000 units, which means that the entire industry can meet demand without producing inventory for a year, and the demand in the international market is only comparable to that in the domestic market. To make the situation even more complicated, foreign brands continue to enter China, and new domestic brands are also increasing. Taking Shanghai, a representative manufacturer of compressors, as an example, there were 65 certified manufacturing enterprises in Shanghai in 2014, which is an increase of 10 compared with the certified production enterprises in 2013. Each compressor supplier can only reduce prices by lowering prices, lowering down payments and aggressive credit sales to sell more equipment.
However, the real demand of the market does not depend on the production capacity of the manufacturers. The short-term prosperity brought about by the economic stimulus is only to fulfill the demand in the future in advance. The “artificial bull market†created through a variety of various promotional methods cannot last long and break the supply and demand. The balance of relations will only bring increasingly serious financial risks to manufacturers, agents, banks and users. When the market retention far exceeds the market demand, the investment rate of return on equipment will also be reduced. This will directly affect the ability of customers to repay their loans. As a result, the creditor's rights of the dealers will increase, and the risk of credit sales will increase sharply.
The pursuit of excessive market and sales disrupts the eco-environment of the industry. The end result is damage to everyone in the industry: manufacturers, agents and users.
According to industry association statistics, according to the data reported by 76 member companies, the entire compressor industry showed sales revenue of 1,690.25 million yuan in 2014, a year-on-year decrease of 3.3%, and the growth rate was down by 6 percentage points from the same period of last year. The main business cost was 13,067.8 million yuan, a year-on-year decrease of 2.62%, and the overall operating efficiency of the company decreased. Among the 76 companies, 37 companies grew in comparison with the same period of last year, of which 13 companies grew by 20%; 39 companies decreased compared with the same period of last year, of which 19 companies decreased by 20%. .
In the past 10 years, screw machine manufacturers have constantly refreshed the bottom line of the price, and even a "innovative" marketing strategy such as "zero down payment" and a reduction in the number of sales, but few people have seriously evaluated the risk and harm caused by these aggressive practices to agents.
Rule reconstruction: it is not too late to make up for the dead?
The Chinese compressor market has experienced a deceleration in growth rates for the fourth consecutive year. Perhaps this crisis will continue. Faced with the severe market situation, have we considered: What caused the depression in the compressor market? It is not too late to make up for the dead. If we do not learn a lesson, even if we are lucky enough to have passed this crisis, we will still make the same mistake in the next crisis.
China's economic growth rate has just fallen to 7%, and the compressor industry feels the coldness of the harsh winter. However, this growth rate is a kind of extravagance for Western developed countries. In fact, China’s sales volume still accounts for the largest in the world in 2014. Compressor market. Why can foreign compressor companies still survive and develop under the economic growth environment of less than 2%, but we cannot survive in the 7% economic growth environment? The reason for the current crisis is not that the speed of development has slowed down, but that we have broken the ecological balance of the compressor market just as we once destroyed fisheries and forest resources. Not only did we not rationally invest in a large amount of excess capacity, we chose an aggressive credit sales model. When the market fell, we even sold a large number of parts to the accessory market at a low price, cashing in on food, and killing the aftermarket of the compressor!
Mature foreign compressor mature markets will also use credit sales models, but those countries have a sound credit control system, and loans are purely commercial behaviors between banks and customers. Banks have professional staff to evaluate and audit customer qualifications and assets. , There appears to be overdue repayment will be bank to collect or take legal proceedings. China's business environment is different from that of foreign mature markets. In a country that lacks a sound credit system, it chooses a radical credit sales model. Excessive use of financial leverage will inevitably result in painful costs. If we do not sum up experiences and lessons and do not analyze the root causes of the crisis and not give up wrong practices, we may repeat the mistakes of history.
When the fishermen at Zhoushan Fisheries “kicked and fishedâ€, if someone did not do this, the yellow croaker was caught by others! When someone in the compressor industry made a mad marketing initiative such as a zero down payment, there are always other companies that follow suit. It's not that they don't know the risks, but they are afraid of being taken away by others! This irrationality, with the trend of marketing does not change, the future of the industry will also become bleak. Therefore, rebuilding the ecological environment and development rules of the compressor industry is a top priority for the industry.
Joey Lehman pointed out in the book “The Story of Purpose†that the best companies in the world are those with lofty purpose and hope that everything the company does will make the world better. At this stage, the biggest problem for the compressor industry companies is to use profits as the sole pursuit of the company and evolve the industry into a contest that is quick to gain instant profit, unscrupulous, and profitable. The lack of a sense of social responsibility does not fully consider the ecological balance and healthy development of the industry. This is precisely the crux of the development of the Chinese compressor industry.
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