Recently, the paint giant Nippon was caught in the "disaster storm" of dealers. Nippon China’s high-expansion model over the years has brought its hidden risks to surface. Between the expansion and risk control, “Nippon†has been caught in a dilemma.
High-expansion burial risk At the end of February, some consumers claimed that they purchased counterfeit goods at a Nippon Paint Co., Ltd. and several distribution channels in Beijing. The counterfeit goods were sold in the form of “true cans of fake paintâ€. Although Nippon China's director of public relations and brand communications Wu Jialun explained to the "First Financial Daily" that this is a dealer's behavior, stores do not belong to State Direct. However, Qiu Baochang, a lawyer, pointed out that the stores licensed by Nippon Paint were suspected of “selling fake giftsâ€, which was a great injury to the Nippon brand. Nippon China, which has maintained rapid growth for many years, has been caught in a dilemma.
Nippon Paint was the first coating company to carry out distribution agency in China. As Nippon is positioning in the midrange, it needs to quickly seize market share, and through the agency channel, it can quickly expand its sales network under limited capital. Therefore, Nippon has been actively developing agency sales networks for many years. Through this model, it has indeed established its position in the Chinese market.
According to Wu Jialun, Nippon has almost double-digit growth in China every year. It has developed 1,600 dealers, 3,500 stores, and 1,500 distribution stores. The huge sales network is unsurpassed. At present, the Chinese market has become the largest market of Lith Group (Nippon China parent company), accounting for more than half of its total sales in Asia, and the national paint market share of about 15%.
The continuous expansion of the sales network has led to an increase in adverse events such as sales of dealers. According to a paint industry source, the development model of Nippon China has led to an increase in its risk. Because Nippon has adopted an agency system in China, it is extremely difficult to control the dealerships, and it has expanded to more than 5,000 distribution outlets. The risk is not high. Conceived.
In fact, not only is Nippon, but another Dulux with the same positioning as Nippon also adopts an agency system, which also faces the management and control problems of many franchisees. A responsible person of Dulux Company admitted to the reporter that the company’s control over the distributors was mainly in the contractual constraints, and that it was difficult for the company to regulate the possible sale of the dealers and even their illegal activities.
An industry source told reporters: “In fact, under the Nippon High Expansion Strategy, the contradiction between the company and distributors has been increasing. In order to expand market share, Nippon continues to give distributors 'pressing goods', dealers to complete the task, only Can give up profits to complete the index, otherwise it is likely to face the risk of being cleared out." Wu Jialun told reporters that the current Nippon and distributors to take a one-year contract. It can be seen that once the dealer can not meet the needs of Nippon, it will be cleared out of the dealer system in the next year.
“In addition, the impact of regulation in real estate in the past two years was in the doldrums. Sales volume in the downstream paint industry declined significantly. In order to complete the sales target, many dealers are selling almost at par, almost becoming Nippon’s 'removable machinery.'†.
In fact, last year, Nippon Sales slowed its growth rate and grew within 10% for the first time in years. "The market is in a sluggish state. It is inevitable that some dealers will take counterfeiting and other acts under high pressure. This phenomenon has almost become the unspoken rules of the industry." Furniture industry experts who declined to be named told reporters.
Nippon China is in a dilemma but companies are afraid to slow down the pace of expansion. A slight relaxation of the market is likely to be blamed.
"The competition in the mid-range market has always been fierce, and whoever seizes the market first occupies an opportunity." Insiders said frankly. This also reflects the current predicament of “Nippon†and it is necessary to develop or maintain the brand. In fact, not only the paint industry, many industries are faced with the management and control of franchisees. The best way to maintain the brand is to abandon the agency distribution channel and take the direct route.
Huang Ye, Marketing Manager of Fowleles, a European paint company, told reporters that Fuk Lok House adopts a direct-operated store model in Scandinavia. In the area of ​​Scandinavia, which is equivalent to the size of China’s Qinghai Province, Fuk Lok Club has established over 700 stores. Home-operated stores, which seldom occur in the operation of store irregularities, form a good maintenance of the brand.
However, it is difficult to apply to companies like Nippon. A paint industry market expert told reporters that due to competition in the low-end products mainly in the sales network, we must quickly seize the market and accelerate the expansion of sales outlets. “If you wait until a home-operated store is built well, the market has already been occupied by others and it will be difficult to expand.â€
However, the expert also stated that it is difficult for agents and dealers to control and control them and allow them to let themselves go. Enterprises can limit their illegal sales through training and contractual restrictions on franchisees. “For counterfeiting, you can register the consumer who purchased the product and collect some products purchased by the consumer for testing to prevent the counterfeit goods from flowing into the market.†The above person said.
The industry also introduced that companies can also set up some direct stores as an example for other franchise stores. At the same time, companies can also understand the market conditions and respond to them without compromising the contradiction between the manufacturers.
Wu Jialun also stated that because the Chinese market is too big and it is difficult to control, the company will strengthen its communication with distributors and strengthen the training of franchise sales personnel in terms of integrity.
High-expansion burial risk At the end of February, some consumers claimed that they purchased counterfeit goods at a Nippon Paint Co., Ltd. and several distribution channels in Beijing. The counterfeit goods were sold in the form of “true cans of fake paintâ€. Although Nippon China's director of public relations and brand communications Wu Jialun explained to the "First Financial Daily" that this is a dealer's behavior, stores do not belong to State Direct. However, Qiu Baochang, a lawyer, pointed out that the stores licensed by Nippon Paint were suspected of “selling fake giftsâ€, which was a great injury to the Nippon brand. Nippon China, which has maintained rapid growth for many years, has been caught in a dilemma.
Nippon Paint was the first coating company to carry out distribution agency in China. As Nippon is positioning in the midrange, it needs to quickly seize market share, and through the agency channel, it can quickly expand its sales network under limited capital. Therefore, Nippon has been actively developing agency sales networks for many years. Through this model, it has indeed established its position in the Chinese market.
According to Wu Jialun, Nippon has almost double-digit growth in China every year. It has developed 1,600 dealers, 3,500 stores, and 1,500 distribution stores. The huge sales network is unsurpassed. At present, the Chinese market has become the largest market of Lith Group (Nippon China parent company), accounting for more than half of its total sales in Asia, and the national paint market share of about 15%.
The continuous expansion of the sales network has led to an increase in adverse events such as sales of dealers. According to a paint industry source, the development model of Nippon China has led to an increase in its risk. Because Nippon has adopted an agency system in China, it is extremely difficult to control the dealerships, and it has expanded to more than 5,000 distribution outlets. The risk is not high. Conceived.
In fact, not only is Nippon, but another Dulux with the same positioning as Nippon also adopts an agency system, which also faces the management and control problems of many franchisees. A responsible person of Dulux Company admitted to the reporter that the company’s control over the distributors was mainly in the contractual constraints, and that it was difficult for the company to regulate the possible sale of the dealers and even their illegal activities.
An industry source told reporters: “In fact, under the Nippon High Expansion Strategy, the contradiction between the company and distributors has been increasing. In order to expand market share, Nippon continues to give distributors 'pressing goods', dealers to complete the task, only Can give up profits to complete the index, otherwise it is likely to face the risk of being cleared out." Wu Jialun told reporters that the current Nippon and distributors to take a one-year contract. It can be seen that once the dealer can not meet the needs of Nippon, it will be cleared out of the dealer system in the next year.
“In addition, the impact of regulation in real estate in the past two years was in the doldrums. Sales volume in the downstream paint industry declined significantly. In order to complete the sales target, many dealers are selling almost at par, almost becoming Nippon’s 'removable machinery.'†.
In fact, last year, Nippon Sales slowed its growth rate and grew within 10% for the first time in years. "The market is in a sluggish state. It is inevitable that some dealers will take counterfeiting and other acts under high pressure. This phenomenon has almost become the unspoken rules of the industry." Furniture industry experts who declined to be named told reporters.
Nippon China is in a dilemma but companies are afraid to slow down the pace of expansion. A slight relaxation of the market is likely to be blamed.
"The competition in the mid-range market has always been fierce, and whoever seizes the market first occupies an opportunity." Insiders said frankly. This also reflects the current predicament of “Nippon†and it is necessary to develop or maintain the brand. In fact, not only the paint industry, many industries are faced with the management and control of franchisees. The best way to maintain the brand is to abandon the agency distribution channel and take the direct route.
Huang Ye, Marketing Manager of Fowleles, a European paint company, told reporters that Fuk Lok House adopts a direct-operated store model in Scandinavia. In the area of ​​Scandinavia, which is equivalent to the size of China’s Qinghai Province, Fuk Lok Club has established over 700 stores. Home-operated stores, which seldom occur in the operation of store irregularities, form a good maintenance of the brand.
However, it is difficult to apply to companies like Nippon. A paint industry market expert told reporters that due to competition in the low-end products mainly in the sales network, we must quickly seize the market and accelerate the expansion of sales outlets. “If you wait until a home-operated store is built well, the market has already been occupied by others and it will be difficult to expand.â€
However, the expert also stated that it is difficult for agents and dealers to control and control them and allow them to let themselves go. Enterprises can limit their illegal sales through training and contractual restrictions on franchisees. “For counterfeiting, you can register the consumer who purchased the product and collect some products purchased by the consumer for testing to prevent the counterfeit goods from flowing into the market.†The above person said.
The industry also introduced that companies can also set up some direct stores as an example for other franchise stores. At the same time, companies can also understand the market conditions and respond to them without compromising the contradiction between the manufacturers.
Wu Jialun also stated that because the Chinese market is too big and it is difficult to control, the company will strengthen its communication with distributors and strengthen the training of franchise sales personnel in terms of integrity.
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