Recent field research on the hardware and power tool offline markets in many places in China found that the operations of a large number of traditional power tool stores are falling into unprecedented difficulties.
Many store owners admit frankly that the daily sales of products in their stores are only a few hundred yuan. If it were not for the manual income earned from the power tool repair business, it would be difficult to even cover the store rent. The survival space of the entire industry is being continuously compressed.
The current hardware and power tool industry has fully entered the era of stock competition. The overall market demand size no longer maintains a growth trend. With the changes in the domestic population structure and the phased contraction of related demands in the industrial and home decoration fields, the overall market demand for power tools is likely to shrink further in the future.
At the same time, power tools are highly standardized products. As online shopping has become the mainstream consumption habit of the public, offline traditional stores have gradually become an alternative channel for consumers. Most consumers will give priority to online channels for price comparison purchases, and will only consider purchasing in offline stores under emergency needs, which directly leads to the continuous decline in customer flow and turnover of traditional stores.
While the market pie continues to shrink, competition within the industry has become increasingly involution, and there has even been a lot of vicious competition, further squeezing the profit margins of practitioners.
When researchers visited an ordinary county in the north, they found that there were six professional power tool stores in one local commercial street. In order to grab customers, some of the merchants not only lowered the prices of regular products, but also focused on popular best-selling brands from the same industry. They imported goods from other provinces and then sold them at the purchase cost price, just to seize each other’s customer base. Two store owners even had a physical conflict due to the conflict between the low-price competition between the goods.
The direct consequence of this vicious involution is that the local power tool market has fallen into a vicious cycle: except for popular brands used to attract traffic, no store dares to introduce a full range of brand products. Almost all stores sell a mix of products from multiple different brands, and no merchants have
With exclusive core brand resources, naturally they dare not set a reasonable profit margin quotation with confidence. In the end, it becomes a zero-sum game of “you destroy my job, I will destroy your stall”. All practitioners have invested a lot of energy in competition, but they cannot make reasonable profits. Many store owners have bluntly said that the business is unsustainable.
Nowadays, traditional power tool stores are facing multiple squeezes: behind them is the burden of family livelihood, online is the continuous impact of low-priced products from e-commerce platforms, and the front-end is facing the continued weakness of overall market demand. Industry reshuffles are inevitable under multiple pressures.
The industry predicts that in the next three years, 50% of domestic traditional power tool stores may withdraw from the market due to difficulty in maintaining operations, and the entire industry will enter a cold winter of development. We also call on all walks of life to treat every hardware and electrical industry practitioner who persists in business, jointly explore a healthy industry development path, and find new survival breakthroughs for offline physical stores to upgrade services and differentiate operations.
