Bathroom market faces more severe development difficulties

Controversy over the form of sanitary enterprise terminals, there have been fierce contradictions between stores and sanitary companies. On the one hand, bathroom distributors have to bear the cost pressures of manufacturers, and on the other hand, they must also face the skyrocketing rents behind the frantic expansion of the stores. This makes the slumping sanitary ware market face more severe development difficulties.

High rental prices in stores are now several thousand in China. There are three or five brands in a company, or even more than a dozen brands. These brands must set up stores all over the country. In the past few years, the number of stores has been relatively stable, causing the situation that stores are in short supply.

The hot real estate in previous years has stimulated bathroom consumption. Since the home store has a chain model, some stores hope to get out of the region and go to the country.

If so, taking advantage of the booming real estate situation and staking all over the country, the pattern of stores across the country has quickly been broken by these foreign predators. And those local stores are not willing to lose their market share, but also use the scale to deal with the impact of foreign predators.

The expansion of the sales scale will inevitably lead to a substantial increase in costs. For the stores to make a profit, they can only increase the rent, which will sacrifice the interests of the bathroom distributors. It can be said that in the process of dominating overlords in supermarkets, the interests of dealers are neglected, and dealers have become the biggest victims of this hegemony.

It is profitable for the seller to operate the store. In this environment of increasing labor costs and propaganda costs, their expansion is accompanied by financial pressure. Rent is its main liquidity, so the rents for stores have remained high for these years. Even if the market environment is not good, stores are not willing to reduce rents easily, hoping to maintain rents and contribute to their hegemony.

Rent reduction calls and reform of rent collection methods existed last year. The head of a well-known brand stated: “We obviously feel that the people’s willingness to consume is weakening, and the dealer’s operating costs are still high, especially the rental of stores. At the same time, the hypermarket opened more and more disorderly expansion, and even four-store, five-store, and six-store shops have been in a state of recklessness, making the majority of manufacturers struggling, and the output of dealers' units has reached a record low, and profits have dropped sharply. Large-scale losses, and some urban dealers have a loss rate of more than 80%."

To this end, the responsible person put forward three suggestions for the store: First, slow down the pace of expansion. Secondly, a hypermarket management committee was set up to allow dealers to participate in the store opening demonstration, rental price demonstration, and marketing effectiveness evaluation while doing business well. Third, take advantage of the situation in the international situation is not good, reduce the pressure on the rent of the dealers.

This point of view is absolutely the current status of the bathroom dealers in the past two years and their aspirations, because following the home industry in 2008 "landlords" after the wave of 2011, bathroom dealers and stores conflict more years, the majority of dealers have Either withdraw or reduce the scale to survive.

Rent reduction: the status quo of a temporary solution to a bathroom dealer is indeed sad, but the reduction of rent is only a temporary solution to the problem, the most important thing is that the store should be based on market demand to open stores, do not blindly open stores, should try to improve the single-store output rate.

It is understood that in 2008, first-tier cities such as Shenzhen, the monthly rental of home stores are mostly around 100 yuan per square meter. Today, monthly rents of RMB 200 per square meter are numerous. Although there are reasons for the increase in land prices, such expensive rents can indeed quickly overwhelm the dealers who have just accumulated capital.

The consequences of the double pincers caused by the expansion of the store and the willingness of consumers to consume cannot be borne solely by the distributor, and the store must also pay for their own crazy expansion. For example, several stores in Hangzhou closed down last year. In the first-tier cities in China, there are also many operational difficulties in the stores currently operating, and they are barely supported.

According to industry insiders, “Today, there are too many new stores and the competition is fierce. If the stores only pay attention to quantity construction and ignore soft services, they will eventually lose consumer support.” The boiling of the soup does not fundamentally solve the problem. Only a relatively balanced market area and market demand can fundamentally solve the problem of dealers' survival.

The flow of people is the determinant of rent The rent of commercial real estate is the result of the joint action of various related factors, and is influenced by various environments such as business environment, geographical environment, traffic environment, industry environment, and the country’s macroeconomic policies. The charm of commercial real estate is also here. Because of its comprehensive nature and its wide range of related industries, this feature makes this area challenging. In general, the rent of commercial real estate is affected by the following factors.

Macro environment: National macro-control policies, bank credit policies, government commercial network planning, land policies, etc.

External factors: people flow, lots, historical business districts, development trends, income and expenditure of local residents, and surrounding business environment.

Intrinsic factors of the project: construction cycle, scale, business model, investment promotion, operation, and positioning.

Although the level of rent for commercial real estate is affected by the above factors, the most direct influence is on the flow of people, because only the flow of people can bring consumers to settled businesses and achieve the purpose of investors investing in shops. Therefore, the large flow of people is a prerequisite for high-priced sales of commercial real estate shops.

With the above factors unchanged, the Marxist economic theory holds that the supply-demand relationship also affects prices. Similarly, the level of rental of shops is also related to the area available in stores and the demand for the entry of companies and dealers.

In short, the rent level of sanitary ware stores should be linked with the flow of stores and the supply and demand of stores. Otherwise, it will certainly cause conflicts.