Increase profits on the end of its rope in the personal computer (PC) makers, began to put more efforts in reducing costs.
7 at the end of the week early in August, China's two major PC maker - Hewlett-Packard and Lenovo have announced a direct supply agreement with Suning reached. Annual sales are expected to direct supply will reach 15 billion yuan, and will reduce costs, improve efficiency and lower prices to consumers and updated products.
Hewlett-Packard, based in Suning's promoters have not felt significant changes. Although from now on, their hands on each PC sold is no longer the middleman from the Digital China, but Suning warehouse delivery directly from HP. HP national chain channel manager Mo Gening to the "First Financial Weekly" that the two sides in addition to logistics is no longer the middleman through Digital China, the loan also achieved in the direct docking. Moge Ning is responsible for HP's booth in the Suning image, service standards, training, etc. Promoters. Prior to this, HP Suning from 2007 conducted in a quasi-direct attempt - and transfer part of its logistics network of distribution channels, Digital China, the traditional full responsibility for the company.
PC and notebook computers are becoming as popular as household appliances, have direct experience of countries such as the United States and Suning hypermarkets already sniffed out this channel opportunities. In recent years, they never stop with a number of computer makers contacted, Suning has with the macro, the same side, Haier, Shenzhou, brands such as HP and Lenovo signed a direct agreement.
Hypermarket sales rise for PC makers began their new look. Suning, Executive Vice President Wang of the "First Financial Weekly," said Su Ning last year, Hewlett-Packard in sales of about 10 billion yuan. He believes that sales accelerated HP 鐩翠緵 conceptual change. "It>> their judgments changed greatly. Before we have deliberately and Hewlett-Packard on direct supply, but their enthusiasm is not high. But the negotiations are successful, the two sides took only two months to finalize the all the implementation details. "
Professional IT channel business Hongtusanbao Bin, president of the "First Financial Weekly," said sales of its direct supply products directly in the next three years is expected to break through 10 billion yuan. The company started from the end of 2008, and Lenovo, Dell, Toshiba, HP and Founder companies in seeking their cooperation on supply chain transformation to upgrade. He took Hongtusanbao with Lenovo's direct supply as a reference, it includes not only traditional procurement level of direct supply, and even extended to the design level, "in the workflow, cash management, product information and achieve seamless docking" adding that Lenovo has been compared to the previous product sales cycle, shortening the traditional supply chain for 15 days.
IT critics generally agreed that such cooperation will channel direct supply Digital, Synnex and Ingram Micro traditional channels such as distributors threat. An anonymous former Digital executive on the "First Financial Weekly," said Su Ning, and the HP Digital China cooperation will make an annual loss of 9 million yuan net profit.
Look, with an annual turnover of 40 billion yuan contrast, HP's direct supply Digital in the loss of this matter is not great. "Our CES sector will certainly be some impact." Digital China Liu Yuqing, General Manager of Corporate Communications for "First Financial Weekly," said. The CES (Chain Electronic Store) unit, part of the supply chain department of Digital China, Digital China accounted for less than 5% of total sales. In early 2009, the supply chain sector to become an independent department, the professional logistics tasks. Volume of business in this sector is relatively small, or even direct supply to HP customers with tailor-made Suning. 3C stores as early as HP and cooperation, because HP does not accept direct orders 3C store, Digital China for Hewlett-Packard provides a single stock exchange services for chain stores to provide logistics and distribution services.
Behind in the direct supply, the real concerns about our traditional distributors is that mass distribution margin is constantly reduced, similar to 3C stores and the Internet multi-channel cut into their profits only gradually pie. 3C store shipments are rapidly increasing their share away more just a matter of time.
"Retail direct supply is common on the international market is an important and effective channel model." Hewlett-Packard Company, "First Financial Weekly" that the future will gradually strengthen the channels of the flat, diversification and efforts in the direct supply area. According Tang Jie, vice president of Lenovo Group, to provide for "First Financial Weekly" data, in 2003, 3C store on PC shipments and nearly zero, this number had now accounted for Lenovo consumer PC Express shipments 1 / 5.
Some small operators have felt unable to support channel. "Before, we sometimes sell out from Suning FALSIFYING. Suning now if we can bypass the distributors, that their lower prices, our business may be even worse." Zhongguancun in HP consumer PCs in the business, said Zhang Kai.
For the traditional distributor, the significance of their future existence must be able to provide customers with unique value of the service.
PC makers are now very much value 3C stores as an end-consumer demand to grasp. Before, manufacturers to distributors Yahuo, distributors to channel business Yahuo, manufacturers and distributors are not concerned about the products sold where they are going. Now, manufacturers have looked to know what consumers will want - since the consumer notebook losing market share to increase Zhi Hou, 姣忎釜 PC manufacturers expect the adoption of a more efficient way to see supply and demand 鍙樺寲, and based on the retail terminals to the data to marketing, manufacturing strategy decision.
Digital China has been aware of this problem. "The market is changing, the channel is divided, in the flat. The financial crisis, when many small business can not survive the channels, all credit to die, their share to the big distributors on the body, and" Yu-Qing Liu said, "we sell hardware, ASP (average selling price) has been going down. firms to profit, the following channels are to profit, we are in the squeeze pressure is 2. In any case, we can not look at gross margin decline. "
As the two major distributors, Digital China and Founder of digital revenue in fiscal 2008 rose 20.1% and 45.39% of the cases, the distribution business of the gross margin has decreased by 0.13% and 0.11%. The whole of China's gross margin distribution business from 10% a few years ago down to about 5%.
Beginning in 2007, Digital China began to seek changes to the service provider of external claims transformation, gradually strengthen the value-added distribution of IT services and share the profits of class, mainly for industry and enterprise customers to provide professional service support.
Distributors are packaged products and services by providing solutions to improve profits. Digital China before the only big customer-oriented business in strategic sectors to provide solutions, but this practice also extended to the consumer and SME customers based consumer strategic sectors - Digital China that consumer to make mobile phones, computers data synchronization between devices such as compatible, would be willing to buy a set of products. Estimated according to Liu Yuqing, if this part of the high-margin products will account for 15% of sales, Digital China, the overall distribution business can be pushed up profits.
Provide professional service to become a trend in the development of distributors. In addition to Digital China, the Union also declared its strong focus on access, and even small quantities can provide batch transport, and that this will be their core competitiveness.
Once the distributors are able to logistics and channel management costs down even lower, with direct supply model they still have a place in the competition. Tang Jie, acknowledges the direct supply mode, Lenovo is still at risk - due to lack of experience, Lenovo needs to gradually accumulate in the logistics and adjusted to reduce costs and expenses; they need to better forecast sales to adjust the supply terminal chain. "If anyone in this channel can do better than our high efficiency, low cost, we certainly are willing to cooperate with." Tang Jie said.
Currently, Digital China IT services business have great expectations of growth remained weak. Digital China in 2008 showed a profit, IT services business revenue improved only 5.6%, although profit increased by 24%, but the base is not high, the overall contribution is very limited.
Makers of traditional channels, the value in the service level, industry and enterprise market is changing large customers, such as Lenovo has recovered the cost of a higher piece of the business channel. In February of this year, Lenovo will 1-3 city reverted to their own management channel management, logistics and cash flow, leaving only the distributor is responsible for return, which makes the traditional channels of business somewhat panic.
In order to improve competitiveness, even prepared to play a Suning Digital China, the country's role as the United States, began to look toward the terminal. And channel it to co-operate, start with a way to join the Cyberport chain. Store layout and decoration of these employees to be responsible for training by Digital. It can be timely feedback to the data of these terminals. The company changed its sales of Evaluation: Prior to Digital shipped only standard, making the main focus Yahuo expand sales; now, it has to lower its sales channels, business appraisal standards. The company's 2008 filing shows the mass marketing revenue grew 15.3%, mainly due to the coverage of emerging markets 4-6, but the promotion of lower cost Queshi net profit by 15%; in value-added distribution in this area, revenues increased 36.7% despite the profit increase was only 4.6%.
The face of a changing market, Digital China have had to find more possibilities. "We can not become numb, must be concerned about the changing trends." Yu-Qing Liu says.
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