The mobile phone market is sluggish. How can offline dealers make money?

Although new phones are released every month, China's smartphone market is still sluggish. The China Academy of Information and Communications Technology said that the overall shipments of the domestic mobile phone market in August fell by 5.3% year-on-year. The specific data is that the overall shipments of the domestic mobile phone market in August 2019 were 30.875 million units, a year-on-year decrease of 5.3%; from January to August 2019, the overall shipments of the domestic mobile phone market were 251 million units, a year-on-year decrease of 5.5%.

Based on the sluggish mobile phone market, offline dealers are currently facing two main difficulties:

1. The sales volume of the entire mobile phone market is indeed declining, and this decline is perceptible, but it is impossible to predict when sales volume will rebound;

2. Distribution has now reached saturation, which has seriously diverted customer flow to individual stores compared to the previous two years.

So what should offline dealers do to make money? Let's take a look at what industry insiders say.

Industry insiders first analyzed the profit structure of traditional stores, as shown in the figure below:

From the profit structure chart, we can see that the profit from mobile phones accounts for the majority. If you want to make money, you have to find ways to increase the profit of a single mobile phone. So dealers began to open exclusive stores. After all, according to industry insiders, the purchase price of exclusive stores is lower than that of traditional stores (there will be policies and targeted rebates from manufacturers). In addition, opening Huawei exclusive stores can also obtain more scarce sources of goods, so you will see Huawei exclusive stores appearing in the streets like mushrooms after rain.

FD products (mainly Huawei's Mate series and P series products) can well meet the profit requirements of a single unit. However, given the fierce competition in offline mobile phones, relying solely on mobile phone profits is far from sustainable. It can temporarily relieve pressure, but it cannot solve the fundamental problem.

Only a change in business model can bring about a company to stand out from the red ocean of competition. When communication software was free, Tencent survived; when antivirus software was free, 360 survived; when mobile phones were free, can dealers survive?

Industry insiders firmly believe that the transformation of traditional stores will definitely transform from the original push-to-sales to experiential sales. So what does this kind of sales mean to mobile phone manufacturers? Two aspects: product + service. The more initiative customers have, the more decisive the product will be. Therefore, the future channel competition will not be like before to see who can go deep and who can distribute widely. The future channel competition will only be a competition of product strength and service level. Customer needs will be upgraded, and the shopping experience also needs to be upgraded, neither of which can be missing.

Industry insiders believe that consumers will have a stronger sense of self-awareness in retail, and the competitiveness of this store-dominated model will become increasingly weaker. There will be more and more specialty stores of various manufacturers, and stores will gradually change to focus on experience. It is believed that in the future, various manufacturers will upgrade their people, places and goods to create a better sales scene; and customers will have more choices to experience better services.

As for how the profit structure of offline dealers has changed? How should traditional offline mobile phone dealers transform? What enlightenment will the transformation of the mobile phone industry bring to other fields? Industry insiders answered with the word "service": 1. The breakthrough point of profit change needs to be found in service.

2. The transformation point must also rely on services. In any field, service should be given priority.

3. The reform of products + services will also affect the direction of major manufacturers.