“Our goal is to account for more than 30% of online sales within three years.†To achieve this goal, Zhongtailong does not only bet on third-party e-commerce platforms, but integrates more than 2,000 franchisees across the country through O2O. Your own e-commerce platform.
Furniture companies are generally suspicious of e-commerce
After more than 20 years of development, Zhongshan office furniture industry has become increasingly mature, and well-known enterprises such as Zhongtailong, Huasheng, Donggang and Fubon have emerged, and a mature industrial cluster has been formed in Dongsheng and West District. In Dongsheng Town, where the office furniture industry is the most concentrated, in 2013, the office furniture industry in the town achieved an industrial output value of more than 5 billion yuan.
Unlike light industrial products such as home appliances and clothing, e-commerce is “beautiful†for office furniture for a long time. In the view of Xu Fei, general manager of the administrative division of Zhongtailong Group, the office furniture industry embraces two major “hard injuries†and three “soft spotsâ€.
"One of the hard injuries is that online sales are difficult to bring to the consumer's physical experience; another hard injury is that the 'last mile' cannot be opened. After the product is sold, it still faces difficulties in delivery, installation, and after-sales service." Xu Fei said: "The first weakness is the lack of talent, the furniture does not understand e-commerce, the e-commerce does not understand furniture; the second weakness is that the initial investment is too large; the third weakness is online sales and physical shopping malls The interests are difficult to balance, and the two channels are prone to conflicts."
Although Zhongtailong established the strategic direction of “entering e-commerce†as early as 2013, it has not been put into practice due to the above-mentioned hardships and weaknesses. Not only Zhongtailong, but other office furniture companies in Zhongshan are also uncertain about whether to embrace e-commerce.
However, in Shaji Town, Suining County, Jiangsu Province, an e-commerce village with a strong wooden furniture industry has already quietly emerged. From 2009 to 2014, this small village with family workshops as the base and Taobao as the platform and products with similar products has become the famous Taobao Village in China. According to reports, in 2014, there were nearly 10,000 online stores in Suining County, and online sales were close to 4.3 billion yuan.
Can O2O help "Zhongshan" furniture fly?
The grassroots network merchants have grown wildly, but the traditional furniture enterprises have not moved. This situation has been in the Zhongshan office furniture industry for many years. However, under the background of slowing macroeconomic growth and sluggish real estate, office furniture companies are increasingly feeling the bottleneck of the development of traditional models.
According to a research report, the total size of the national furniture industry market in 2014 exceeded 70 billion yuan, and the annual growth rate exceeded 10%. In the national office furniture industry, Zhongtailong is a dazzling leader, but the front runners also feel the crisis. “The total output value of Zhongtailong in 2013 was 1.38 billion yuan. The target for 2014 is to increase by 10%, but this goal has not been achieved.†Xu Fei said.
With the evolving e-commerce industry, the emerging O2O model has made traditional furniture companies suddenly open and highly anticipated. In the view of Zhongtailong Group, O2O can better solve all the hard and soft ribs.
On March 26th, an e-commerce platform with the domain name “ztl5s†was officially launched. More than 2,000 franchisees distributed throughout the country were connected to the website and became the image experience store of Zhongtailong. Consumers can place orders online or at franchisees, while sales, parts, technical consultation, customization, after-sales services are all borne by local franchisees. Due to the uniform pricing throughout the country, the internal consumption of online stores and physical stores is avoided. In order to create a new image, from this year, Zhongtailong has also launched a brand “Dibao†for online sales.
"According to our plan, the proportion of e-commerce sales in three years will exceed 30%." Xu Fei said. As the first office furniture enterprise in Zhongshan to “eat crabsâ€, Zhongtailong's exploration will provide valuable experience for the peers.
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