There is no eternal giant, nor is there an eternal winner.
In the wave of the era, even if it is a peak-level existence, it may become the forefront who is photographed on the beach. On March 16 this year, Sichuan Changhong, the former "color TV king", disclosed an announcement on receiving the execution notice, with a total execution amount of RMB 17.03 million (including debt interest during the period of delayed performance, etc.). A total of 3 bank accounts of the company were frozen by the Mianyang Intermediate People's Court, with a total frozen amount of approximately RMB 15.83 million. As soon as the news came out, public opinion was in an uproar. You should know that in the history of the development of color TV in China, Sichuan Changhong has a strong position. Not only did it break the foreign monopoly by itself, but it also ranked first in domestic TV sales for 20 consecutive years (1990 to 2009), and is a well-deserved leader.
However, Changhong did not continue to maintain this impressive advantage. Not only does its influence become weaker and weaker, but its voice in the industry has long been different from what it used to be.
According to the 2021 China Color TV Sales Ranking released by Aowei Cloud Network, Sichuan Changhong ranks 6th with a market share of only 7.55%, directly slipping out of the first echelon, and the gap with its competitors is also increasing.
vicious circle did not stop. On the evening of August 24, 2022, Sichuan Changhong issued an announcement stating that in order to revitalize existing assets, the company has a total of 31 existing properties in , Mianyang , Wuhan City and other places, and is listed for sale on the West Exchange. The transfer base price of 31 properties is 166 million yuan.
In fact, this is not the first time Changhong sells a house to save himself. In 2019, Sichuan Changhong sold Shanghai Changhong Building worth 150 million yuan for 81.2 million yuan, which shows the degree of anxiety.
Behind the sale of real estate is Sichuan Changhong's sluggish performance over the years. On the same day that the house sale announcement was issued, Sichuan Changhong also disclosed its financial report for the first half of 2022, with its operating income of 43.948 billion yuan, a year-on-year decrease of 10.71%; net profit was 152 million yuan, and net profit excluding non-network was 24.1134 million yuan.
It is easy to fight the country, but it is difficult to defend the country. Once upon a time, Changhong, which "takes industry as its responsibility to serve the country", created a new era for China, but it was in a mess when huge changes came, and it was so deeply trapped in the quagmire that it could not extricate itself.
How can this situation not be sad?
1
Three price wars, sitting on the throne of "color TV king"
In Mianyang, Sichuan, there is a very vivid saying: "Changhong sneezes, Mianyang will catch a cold." Looking at Sichuan Changhong's resume, you can find that the first half of the game is indeed as its name, and it can be called "the momentum is like a rainbow."
1958, on a field of Ophiopogon japonicus on the outskirts of Mianyang, a group of military workers waved their shovels to establish the "State-Board Changhong Machine Factory", which was the only airborne fire control radar production base in China at that time and the predecessor of Changhong Group.
1970, Changhong gradually transformed to the direction of "protecting the army and turning the civilian", shifting its focus to consumer electronics, and the "State-owned Sichuan Radio Plant" was also renamed "State-owned Changhong Machine Factory"; in 1972, the first Changhong TV based on the military system was successfully developed, and the "Changhong" brand was thus established.
1985, Ni Runfeng , who served as the director of Changhong, defeated the public and made a major decision to change Changhong's fate - bet on the color TV industry, launched China's first domestic color TV CJ37A, and on the eve of the closing of relevant national policies, it introduced the latest generation of color TV production line from Japan's Panasonic .
▲Ni Runfeng
This was the last color TV production line approved by the state at that time, and it was also the most automated and single-season production line introduced in the domestic industry at the same time, laying the foundation for the glory of Changhong later.
But what really made Changhong famous is three thrilling "price wars". First, in 1988, before and after the country abolished the dual-track price system, the residual power of strict control in the circulation link of the color TV market still existed, resulting in a shortage of color TVs. Changhong boldly sold to consumers at prices lower than the black market price and higher than the national price, and achieved a profit of 197 million yuan that year.
Second, in 1989, when the country imposed a special consumption tax of 600 yuan on color TVs, Changhong activated the stagnant color TV market by 300 yuan, creating the first price cut in China's home appliance industry in history. In 1990, Changhong ranked first in the sales champion of the color TV industry.
993, Changhong designed and manufactured the "Red Sun Family" series of the most complete and best performance in China, setting off a rush to buy; on March 11, 1994, "Sichuan Changhong" was listed on Shanghai Stock Exchange ; in October 1995, Changhong produced China's first 34-inch large-screen color TV, which became sensational news, and Changhong was popular all over the country.
If the first two price wars greatly improved Changhong's overall popularity, the third time completely established Changhong's position as the boss.
996, the national color TV tariffs were adjusted, from 35% to 23%. International home appliance brands were eyeing each other and wanted to take this opportunity to seize or even monopolize the Chinese market. Under the heavy siege, local color TVs were retreating step by step, and Changhong's inventory continued to increase, and once reached the point where "there was no time to stack warehouses every month."
In the current crisis, Changhong has once again made a desperate attempt to announce that all color TVs will be sold at a price reduction of up to 18%. Under Changhong's leadership, local brands quickly followed up, and the battle to defend domestic products began, leaving foreign brands no longer able to fight back.
In just one month, Changhong's sales doubled, and its market share soared from 27% to 35%. "For every three color TVs sold that year, one was Changhong." Changhong Color TV became the biggest winner, not only appeared on the national gift list, but also became a symbol of national brands.
Changhong, who was pushed to the peak, was immersed in the joy of victory, without notice at all, and the crisis had come unexpectedly.
2
Strategic decision-making successive mistakes, the altar fell and the glory no longer
Changhong, who won the turnaround battle, never expected that allies from the same camp would soon turn against each other.
Local manufacturers who have tasted the sweetness have begun to learn from it, constantly launching cheaper new products, actively launching price wars, and have a strong momentum to catch up with the long rainbow.
In the face of the constantly divided market, Ni Runfeng remained calm and carefully deployed the "monopoly strategy". That is, on the one hand, we signed an agreement with eight domestic color tubes to monopolize the upstream channels of development tubes, leaving our opponents without stock; on the other hand, we quietly brewed a new price war, intending to kill the throat with one sword.
I thought the plan was seamless, but things did not develop according to the established idea, but were completely out of track. It turned out that Changhong had 70% of the market's imaging tube resources, but in private, the color tube factory that made profits would still secretly produce for other manufacturers, resulting in Changhong's wishful thinking being lost.
knocked off teeth and swallowed blood. Changhong not only stocked up a large number of imaging tubes at high prices, but also had to bite the bullet and fight a price war, and its annual net profit fell by 74%. This rampant advance also became the turning point for Changhong to decline from prosperity.
To make matters worse, the price war has not worked at all due to the wrong market estimates. In 1998, Sichuan Changhong's inventory product increased to 6.789 billion yuan.
In desperation, in early 2001, Changhong, with overcapacity, began to implement the "international development" strategy. Perhaps because of his illness, Changhong made a mistake in his move and chose to cooperate with the American APEX company to carry out trade in the United States on credit sales.
This company has a history of bad record. Xinke Group and Wugang have been deceived. Changhong also led a team to go to the United States for inspection in person, but in order to solve the urgent problem, the contract was finally finalized.
However, APEX not only did not "handle the money and deliver the goods in one hand" according to the normal process, but instead collected more than 4 billion yuan of Changhong's payment for goods through bill fraud, and then ran away and disappeared. All the color TVs transported out were wasted.
At the end of 2004, Changhong announced that "the US importer APEX Company suffered major losses due to factors such as patent fees, the US anti-dumping against Chinese color TV and poor management, and there were great difficulties in paying the company's arrears." He exposed the amazing amount of bad debts to the outside world.
Changhong's reputation was hit hard. Ni Runfeng, who led Changhong all the way, also ended his career and stepped down as chairman of Changhong and was replaced by Zhao Yong.
The nightmare has not ended yet, Changhong jumped into another fire pit. In 2005, when LCD TVs were at the forefront, the new chairman Zhao Yong went against the trend and determined that Changhong's investment direction was plasma screen.
In 2006, Changhong spent 2 billion US dollars to acquire South Korea's Orian Plasma Company, and then invested another 720 million yuan to establish Sichuan Hongou Display Co., Ltd., which mainly produces plasma panels; in 2007, Changhong spent 6 billion yuan to gamble on plasma TVs; in 2008, Hitachi , Pioneer, Samsung and LG Electronic successively withdrew from plasma panel production, but only Changhong is still insisting on it.
Facts have proved that Changhong has once again walked into the wrong path. The plasma project provider's investment of more than 4 billion yuan was only in exchange for years of losses, and in the end they had to sell 61.48% of Hongou Company's equity for a price of 64.2 million yuan, which was severely damaged.
Time comes in 2014, the wave of networking and intelligence begins to sweep the home appliance industry, and various home appliance companies are centrally transforming into intelligence. Haier , Midea, and Gree have successively established their own intelligent ecosystems; Internet companies such as Ali , Xiaomi , Suning , etc. have also joined the battlefield.
Chairman Zhao Yong, who should have seized the opportunity of "revival", disagreed and believed that his competitors were trying to die. As a result, many Internet brands overtook the curve and left Changhong far behind. After a series of mistakes, Changhong's performance continued to be sluggish. It not only depends on government subsidies to survive, but also on selling land to alleviate the economic situation and the glory will no longer be achieved.
3
Hidden concerns in diversified development. Can Changhong turn around and find new growth momentum
Watch the TV business is declining day by day, Changhong is attacking everywhere, hoping to find new growth momentum.
In the field of traditional home appliances, Changhong also produces air conditioners and freezers in addition to TVs; in addition, Changhong has also made great efforts to enter the kitchen, bathroom, mobile phone, IT product industries, and even entered the real estate industry that has almost no connection with its old business.
▲The revenue of Changhong products in 2021
Unfortunately, things went against their expectations. These industries have a huge span. Each industry itself has giants. Changhong, who became a halfway-time business, has not made too much trouble. Until now, it has not been able to come up with a flagship product that can beat the market.
In addition, the brand's focus has shifted, involving too many fields. In the context of lack of outstanding main business, it also brings problems of inefficiency and increased management costs, which continues to drag down Changhong's pace of progress.
The most typical example is that in 2017, Changhong took the lead in establishing the first artificial intelligence laboratory in the domestic home appliance industry, far ahead of its competitors. But when Changhong really freed up his hands to carry out research and development, whether it was his old rivals Konka, Skyworth , Hisense , or Internet brands such as Storm, Xiaomi, Microwhale , they had already launched their artificial intelligence strategies. Changhong got up early but failed to play its first-mover advantage.
So, the plate has indeed spread out, but the profit level has not increased. With the deepening of diversification, Changhong's profitability has declined year by year, with gross profit margin falling from 16% in 2010 to 11%, and net profit margin has been hovering around 2%.
In comparison, Haier, the former rival, has been focusing on home appliance production and rarely involved in other fields. Their refrigerator turnover is far higher than other products, and has unshakable core competitiveness; the same is true for Hisense, its main product is only TVs, but its performance is enough to "sell" Changhong.
Of course, it is understandable to look for more profit growth points from the long-term perspective of the company's development. Midea Group successfully achieved the "two legs" synchronously moving forward, maintaining the business advantages of traditional consumer appliances and HVAC , and adding new market imagination space in the field of robot automation.
The mistake is that Changhong is more like a blind "chaser". He goes wherever he is lively. It seems to be omnipotent, but in fact it is numerous but not exquisite, and he has lost the label of the color TV king.
Nowadays, Changhong still says it wants to "accelerate the cultivation of new growth poles." These new growth poles include home robots, electric vehicle compressors, automotive air conditioners and other businesses; layout of smart agriculture, smart water meter, smart parking, equipment positioning; lithium battery industry, focusing on layout opportunities in the ternary material field; auto parts business, etc.
Changhong Group Chairman Zhao Yong even publicly stated that by 2025, Changhong will achieve the goal of ranking first in the country in major industries; cultivate a group of champions or hidden champions in subdivided industries, and increase sales to 200 billion yuan.
However, opportunities are always fleeting. If the long rainbow that has repeatedly missed the golden period, it still needs to be questioned whether it can achieve its bold ambitions and make a comeback again.
But what is certain is that the market has not left much time for Changhong. 0
