"ignite" the fireworks business in the sinking market

Editing questions

"Firecrackers are one year old, and the spring breeze warms Tu Su." Fireworks and firecrackers used to be the standard of the Spring Festival. After the reunion dinner on New Year's Eve, people began to set off fireworks one after another until the first day of the New Year's Day. Firecrackers are everywhere in the streets and alleys.

Most of these fireworks are made in China. Hunan's fireworks exports account for 57.3% of the national fireworks exports, and Changsha, where Liuyang is located, accounts for 90%.

Changes have taken place in recent years. In many places, the introduction of the "ban on whipping" has gradually "disappeared" fireworks from the market.

Panda Fireworks, once the supplier of the Bird's Nest fireworks for the Beijing Olympic Games and the "first fireworks", has experienced a continuous decline in sales revenue of fireworks and firecrackers in recent years. Now I'm doing internet finance, and even my name has been changed to Panda Financial Control.

Liuyang, the hometown of fireworks where Panda Fireworks is located, currently has only 774 fireworks and firecrackers enterprises. Since 20 15, the number of newly registered enterprises has declined like a cliff.

Instead, there is no gunpowder, no combustion, and electronic fireworks controlled by electronic switches. Yang Kui, chairman of Liuyang Hongshi Fireworks, told E-commerce Online that "the sales of fireworks and firecrackers are getting worse year by year, and the profit margins of manufacturers are greatly reduced. Now either transform into electronic fireworks, or the old bank sells abroad. "

Many local manufacturers in Liuyang have transformed into electronic fireworks. Since 65438+February, the sales of electronic fireworks in Yang Kui's factory have increased by 30-40% year-on-year. "Fireworks and firecrackers should be set off at rural weddings, opening ceremonies, Spring Festival celebrations and funerals. Electronic fireworks are particularly good in third-and fourth-tier cities. "

From the production end of the factory to the sales end of Aauto Quicker, Tik Tok, video number and WeChat business group, electronic fireworks quietly ignited the enthusiasm of sinking the market.

"Safety and environmental protection, smoke-free, dust-free, electronic control and direct supply from manufacturers are the first choice for rural investment." Open Aauto faster and search for electronic fireworks. There are all kinds of videos: those that show electronic fireworks directly, those that take you into the electronic fireworks equipment factory, those that teach you how to use electronic fireworks by hand, and even those that disassemble and assemble electronic fireworks on the spot.

Even the slogan is similar-"Want to make quick money? Then contact me quickly! " These video account names are labeled with wholesale, factory and retail, and the recording method is simple. The shooting background is mostly in rural areas and factories, but the amount of play is considerable. It is very common to play to 65438+ 10,000. The following is the voice of the old iron people: "I want to buy, how to buy?"

A similar scene also happened on the e-commerce platform. The electronic fireworks of 16.8 yuan were sold in Taobao special edition "65438+ million+pieces". Search for electronic fireworks in 1688, and the turnover of the first manufacturer exceeds110000.

In Liuyang, many traditional fireworks enterprises have begun to transform.

"In 20 17, all parts of the country began to ban, and a large number of tourists stopped buying goods. I realized that I had to make a change. " Merchants around Yang Kui have started electronic fireworks business one after another, and many traditional enterprises have added electronic fireworks R&D and sales sections.

He revealed that during the recent peak sales period of electronic fireworks, more than 50,000 fireworks were sold every day, and most of them went to small counties. The cost of electronic fireworks is low, which is in line with the price-sensitive sinking market. Some rural markets and wedding dress shops in small towns are his downstream customers. According to Yang Kui's prediction, during the Spring Festival this year, the sales of electronic fireworks can double to 5 million, accounting for 10% of all his sales scenes.

"A family in Wenzhou can spend more than 200,000 yuan on electronic fireworks for a wedding. If it is a normal day, rural areas buy the most electronic fireworks, accounting for 50%. Shandong, Shanxi, Henan, Guangdong, Wenzhou and other places have a great demand for electronic fireworks. We also tried online sales, and we started selling it on Taobao. Later, we found that Pinduoduo and 1688, which are mainly cost-effective, sold better. "

In the invisible corner, electronic fireworks have quietly occupied the small shops in the county and rural markets and become the new export of the sinking market of Nuggets.

Fireworks are a typical seasonal business. From the perspective of business model, it belongs to a single consumption with high scene, and the peak consumption period is limited to festivals and celebrations, which has nothing to do with the concepts of improving user stickiness, life-cycle user operation to improve customer unit price and repurchase rate emphasized by modern commerce. However, relying on low cost, thin profit and rich sales channels, electronic fireworks can still make all ports in the industrial chain earn a lot of money.

Wu Mina, the person in charge of Hangzhou Happiness Fireworks, said, "Traditional fireworks and firecrackers are supervised by relevant departments from production, transportation to sales. Take Yuhang District of Hangzhou as an example. There are only more than 40 outlets approved for retail this year, which are decreasing every year. " Different from traditional fireworks, the advantage of electronic fireworks is that it does not need any business qualification, which reduces the entry threshold of the industry and has a broader sales market.

The cost price of electronic fireworks is around 5 yuan, among which raw materials cost is the highest, accounting for more than 60%, logistics cost 10%, labor cost 10%, research and development cost 5%, and the rest is profit rate. In other words, this is a labor-intensive industry, and brand value is not the first consideration. At present, most of the investment is in the product itself.

Yang Kui told E-commerce Online, "In our line, the number of people assembling electronic fireworks is often the largest. We have nearly 200 people assembling electronic fireworks, most of whom are responsible for making gas cylinders, which are also the most expensive accessories in electronic fireworks. The cost of one is 2 yuan. " Earlier, a proposal submitted by Huang Xiaoling, a representative of the National People's Congress, mentioned that the entire fireworks and firecrackers industry chain has nearly 4 million employees, mostly in remote rural areas, and the labor cost is low.

The remaining gross profit space is enough for electronic fireworks to achieve layers of "small profits but quick turnover". The essence of business has not changed, and it is still the mode of distribution agent. The terminal retail profit rate is high, but the sales volume cannot be compared with the upstream. Yang Kui revealed that the profit rate of his factory is about 15%-20%, and the profit rate of intermediary agents is 15%. Retail stores have the highest profit rate, above 20%. Some insiders described, "the profit of traditional industries is to end water, and it will be a loss if it is sprinkled. However, the fireworks industry is a bucket, and everyone who picks up the bucket can still make money. "

Generally speaking, it takes at least 654.38+10,000 yuan to get goods from suppliers, which is about 20,000 rounds. The profit of such an order will be 654.38+0.5 to 20,000 yuan, excluding all labor, raw materials and other costs. According to Yang Kui, of the 5 million sales during the Spring Festival, nearly 6.5438+0 million was net profit.

Electronic fireworks are in the transition period of fireworks industry. Although we have got rid of the shackles of the traditional fireworks "prohibition of alcohol", the sales model still stays in the past, adopting the most traditional offline agent+distribution.

Online, 1688 is the most popular channel for suppliers. The price of six sets of electronic fireworks is usually around 70-80 yuan, and each set is 1 1- 13 yuan, which is more than twice the cost price.

For electronic fireworks, the C2M mode in which users directly access the factory is the most ideal state. With online retail, the profit of electronic fireworks can be turned over to more than 50% at once, but in reality, the online growth space has not been fully tapped. Yang Kui said that online channel sales currently only account for 10%, and 90% of orders still come from offline.

This is mainly because the transportation cost of online orders is too high.

Simply calculate an account, a customer in Henan placed an order of 6.5438+0 million yuan. From Hunan to Henan, the logistics costs at least 500-600 yuan. Express delivery is more expensive, and the freight costs 700-800 yuan. "Normal electronic fireworks color box size, 30 cm long, 20 cm wide and 30 cm high, the larger the volume, the more expensive the transportation. If the customer's order volume is too small, it is not too much to do this. " Yang Kui said.

Therefore, all along, the sales of electronic fireworks are mostly online drainage and offline operation.

Suppliers and agents will do online marketing, such as Baidu and 360 search, put advertisements on e-commerce platforms, and then drain them offline. After the popularity of short video platforms such as Tik Tok and Aauto Quicker, it has become a new marketing method of electronic fireworks to show the fireworks effect with video. After wechat or direct telephone communication, get the order and then find a car to send fireworks, so that the freight can be saved by half. If it exceeds 1000 km, the customer is required to pay the freight separately.

This model is somewhat similar to the recently exploded e-cigarette. It also pays attention to offline layout, and gradually enters shopping malls, convenience stores and couples stores, and goes deep into commercial capillaries, but electronic fireworks are relatively sinking. From suppliers to consumers, there are often several levels of agents in the middle, and there will also be price wars between agents. For new players, electronic fireworks have no formal channels to get goods, and it is easy to step on a big pit.

For example, the common joining fee and agency fee of electronic fireworks.

Yang Kui told E-commerce Online that for electronic fireworks, the goods are usually money and goods. Most suppliers think about how to reduce the cost as much as possible on the basis of ensuring safety, and have not formed an influential head brand. At present, the initial fee is basically equal to the IQ tax. "If it is an agent, what we generally require is that we must get a certain amount of goods, and it is unlikely that we will have to charge an additional agency fee." Yang Kui said.

In other words, the entry threshold for electronic fireworks is very low. This is good and bad. On the one hand, let more players enter this field at low cost. If you have a storefront, you can purchase goods directly in the store, and if you don't have a storefront, you can sell them online. But on the other hand, it also increases the uncertainty of the whole market, and all kinds of miscellaneous brands are mixed.

In the sinking market, the rapid rise of electronic fireworks has made a group of people millions. When more and more people flock to this market, electronic fireworks will become no longer mysterious. However, after coming out of the cost-effective business, how to develop better products and cater to the experience of consumers is the key to success here. For players who have already entered the game, perhaps the problem that needs to be solved now is how to set up a golden signboard and build their own moat in the nascent barbaric market.