What difficulties are small and medium-sized waterproof enterprises currently facing?

This is an article about the development of small and medium-sized waterproof enterprises, written by a waterproof veteran who has worked in the industry for nearly 30 years and has been fighting for a long time in enterprise management positions

The article analyzes the current basic market situation of China's building waterproofing industry: the industry concentration is rapidly increasing, and the pattern of leading enterprises dividing up most of the market cake and the living space of small and medium-sized enterprises being greatly compressed is taking shape

The article pointed out that, compared with large enterprises, small and medium-sized enterprises have obvious disadvantages in terms of scale, cost, brand, talent, capital, and channels

Discussion on the Dilemma of Small and Medium-sized Waterproof Enterprises

(Author: Zhu Houxin, Sales Director of Jiangsu Ryder Building Materials Co.

With the deepening of reform and opening up, China's market economy system has become more and more perfect and mature, and all walks of life have achieved tremendous development, especially the development of manufacturing industry is particularly rapid

01 Analysis of the general trend of building waterproofing industry

The waterproof industry in the past ten years is no longer the era when state-owned enterprises dominated the world 30 years ago and private enterprises rose rapidly 20 years ago.

1 The industrial concentration has been greatly improved.

2 The brand awareness of consumers is constantly improving, the brand effect is being enlarged, and small and medium-sized enterprises without brand influence are being ruthlessly abandoned by the market

3 The traditional sales model is being replaced by centralized procurement, battle procurement, and public bidding, and these "feasts" and "feasts" are difficult for small and medium-sized enterprises to touch

4 The scale effect of leading companies is emerging, and their cost advantages are getting bigger and bigger, forming a crushing trend for small and medium-sized enterprises.
The low-price strategy of small and medium-sized enterprises is no longer effective
.

5 On the one hand, there is a serious overcapacity in the industry, on the other hand, leading companies continue to expand their territory on a large scale to enhance their competitive advantages, and even state-owned enterprises and listed companies have entered the waterproof industry with huge capital to share this late feast
.
In order to survive, many small and medium-sized enterprises can only adopt the sales strategy of bottomless price reduction, but this almost suicidal practice is unsustainable
.

6 The prosperity of the real estate industry is declining, and the waterproof industry, which is positively related to it, has been directly impacted; high-quality real estate projects with financial protection are basically monopolized by listed waterproof enterprises and leading enterprises, and the soil (small and medium real estate enterprises) on which small and medium waterproof enterprises depend for survival has become increasingly barren
.
If the skin does not exist, how can the hair be attached?

7 The market freight rate has been greatly increased, and the size of the transportation radius directly affects the procurement cost of waterproof materials
.
In order to reduce the transportation radius, large-scale waterproof enterprises are accelerating the national layout, and the "one mu and one third of the land" of small and medium-sized enterprises is being ruthlessly eroded
.

8 Environmental protection, energy saving, and safety supervision are becoming more and more strict, and equipment investment and operating costs have risen sharply.
It is difficult for the production and sales of small and medium-sized enterprises to absorb this rising daily expenses
.

9 The product iteration is accelerated, the low-end production capacity is eliminated and accelerated, and the demand of enterprises for product R&D, management talents and manufacturing equipment is developing towards the high-end direction, which requires a large amount of capital investment, and the financial resources of small and medium-sized enterprises cannot support it
.

02 The pain of small and medium waterproof enterprises

Vertically, the current environment of the waterproof industry has undergone fundamental changes, and small and medium-sized enterprises have continued to use the original growth model, which has made them fully disadvantaged in market competition
.
Specifically:

1 Without brand promotion measures and investment, the brand awareness is low or no awareness, and the target with a slight threshold will be rejected
.

2 The production and operation costs are high due to the small scale and low operating rate, and the product price has no advantage at all
.

3 The investment in product research and development is seriously insufficient or not at all, the product lacks features and quality problems continue
.

4 The financing channels are narrow and the financing cost is high
.

5 In a talent depression, high-end talents cannot be hired and cannot be hired.
Even if they are introduced at a high price, it is difficult to retain them.
The cost of employment is much higher than that of large-scale enterprises
.

6 There is a lack of high-end marketing talents, a single marketing method, and it is difficult to expand the market.
Even the "base" that we have painstakingly managed is being eroded by leading companies day by day
.

7 Workshop->
.
Because the sales volume is not going up, the management investment dare not let go, which leads to a vicious circle
.

8 There is a huge conflict between the old-fashioned traditional management concept and the requirements of modern enterprise management, and many enterprises are distracted and lack vitality
.

9 Lack of high-quality key customer resources, lack of brand influence and cost advantages, resulting in a large outflow of existing customers, a sharp decline in sales, and the inability to expand the brand
.

10 The low-end market, which is caught in disorderly competition, relies on inferior quality, low price and credit sales to impact the market.
Once market supervision becomes stricter and non-standard products cannot be sold, it will inevitably be eliminated
.

03 Where are the cracks in the waterproof market

In the face of such a severe market situation, can small and medium-sized enterprises survive in the cracks, and is there still a crack in the waterproof industry? Where is it? The author believes that there is still a first-line survival space for small and medium-sized waterproof enterprises, which exists in the following four words
.

01 "Professional"

Specialization is a profession, and it takes a segmented field
.
For small and medium-sized enterprises, based on their own advantages, they can specialize in the development and operation of one or two waterproof products or construction and consulting services.
Based on this, they can concentrate their advantageous resources (human, financial, material, etc.
) to seek from one point.
breakthrough
.
 

02 "Fine"

Refinement means refinement.
One or two highly related products or services are made to the extreme and made into high-quality products, so as to form their own closed-loop system, making it difficult for opponents to imitate and even more difficult to surpass
.

03 "Special"

Special, that is, products and technologies have their own characteristics, uniqueness and uniqueness
.
We plan, cultivate and establish our unique features in an all-round way, attract customers' attention with features, and let customers know and accept, and then appreciate and consciously promote the company's special products
.

04 "New"

Both products and technologies have life cycles, and alternatives will soon emerge
.
You can choose one or two sub-fields, and through continuous innovation, enrich their connotations to adapt to a wider range of applications and needs, and at the same time achieve the purpose of enhancing customer stickiness, expanding consumer groups and application fields
.

The combination of the above four words is "specialized, refined and innovative", which is the way out for small and medium-sized enterprises in the future
.
"Specialized and special new" is not limited to products and technologies, but should also include all aspects of the enterprise.
The final formation is a "specialized and special new" enterprise, rather than a certain product or a certain technology
.

04 How small and medium waterproof enterprises can use "specialized, specialized and new" to break through

Under the new economic situation of rapid development, the living space of traditional workshop->
.
Lessons from the past abound: cement and steel in the field of building materials, beer, drinking water, and instant noodles in the field of food and beverages, cosmetics and detergents in the field of daily necessities, and even the breeding industry and feed industry have been reshuffled by several oligopolists.

.
_ The industrial concentration of the waterproof industry continues to increase, and the leading companies share the market cake.
The day when small companies can survive only by making their own characteristics and doing a good job of supporting them is coming!

At this moment, the most important thing is that the boss, chairman, and major shareholders should calm down, and explore the path suitable for their own enterprise through in-depth and detailed analysis of the industry situation and the current situation of the enterprise
.
Don't imagine that your "little" enterprise can one day become "Oriental Yuhong", but you should think about how to make the enterprise "white T" and "Jiang Xiaobai" in the waterproof industry
.

The reason why I say this is because too many of our small and micro business owners are still living in the dark
.
Some people see that many listed companies are running into the waterproof industry, and they simply believe that this is a "sunrise industry".
As long as there is a construction industry, there will be waterproofing.
Therefore, the old companies raised funds to expand their production scale and wanted to make a big effort.
Newcomers poured all their money into building factories and wanted a piece of the pie
.
As everyone knows, this operation is very likely to send himself into a place of doom
.
Of course, there are also some small and medium-sized enterprises who wake up earlier.
They feel that their enterprises will be unable to cope with the future trends of the industry sooner or later, so they choose to cooperate with leading enterprises and sell themselves to large enterprises, "next to the big tree", and resolve the problem.
future risks
.
In my opinion, this is a wise choice
.
However, as a small and medium-sized enterprise, if you choose to stay in this industry, it is the best policy to plan the way out from the following aspects
.

1) Focus on specialization and make a fuss about the word "specialized"

The so-called specialization means professionalism, expertise, specificity, and exclusiveness
.
That is to find people with expertise in the profession, do special things, and achieve a product or technology that is exclusive to you
.
The difficulty here is "specialization", that is, how to locate, characterize and freeze the "specialization"
.
Through comprehensive, careful, patient, and in-depth investigation, analysis, thinking, and collision, a strategy that can be put into action is finally formed
.
For example, Sarnafil in Europe and Switzerland has achieved the ultimate in PVC waterproofing membranes for decades; GAF is the first company in the United States to provide a full life cycle warranty for roofing waterproofing systems; Adhesive series of pre-laid and vapor barrier products; Soprema is the world's largest modified asphalt waterproofing membrane company, which maximizes the performance of asphalt membranes
.
It can be said that each has its own characteristics and expertise
.

The successful examples of these international famous enterprises confirm a sentence: it is the "king way" to concentrate superior resources and do what you are familiar with, good at, and professional
.

2) With "fine" as the standard, non-fine products will not leave the factory, and high-quality customers will be firmly adhered to

Fine, that is, precise, fine, delicate, delicate, delicate
.
There are big waves in the market, and in the end, those that can survive for a long time are all high-quality products
.
Impressing customers with high-quality products and retaining customers with high-quality products is a "kingdom"
.
This "fine" is also in a broad sense, it includes all the output of the enterprise
.
For example, the products under the Swiss Army Knife brand are synonymous with high-quality products.
A small and exquisite combination knife with nearly 20 functions is very popular and sells well all over the world
.
This shows that to make a brand famous all over the world, it is impossible to achieve
.

3) With "special" as a shield, you can attack and retreat and defend

Special, that is, special, characteristic, special, specific, special
.
There is a major characteristic of human nature, that is, people like the special, different and unique things most of the same kind of objects
.
To make one's own products distinctive, even unique, will undoubtedly lead the field in this field
.
We can use patents, anti-counterfeiting and other means to protect this feature and keep competitors away
.
This "special" is also broad, it covers appearance, performance, application, experience and other aspects, to "unique" to open up a new track and avoid many competitors
.

4) Take "new" as the spear to seize the market one step ahead

New, that is, trendy, fresh
.
It is based on satisfying people's curiosity, expectation and possession of new things and new products
.
At the same time, it also makes the enterprise continue to make progress, thus leading the industry, becoming the vane of the industry and the trendsetter of the times
.
Innovation is the foundation of the long-term prosperity of an enterprise.
If you go against the current, you will retreat.
Kodak film, Nokia and Motorola mobile phones have all lost their former glory due to insufficient innovation
.
In fact, there are many similar examples in the waterproof industry.
Many old companies of 20 to 30 years have been busy with money, but now they are deserted
.

05 What kind of small and medium-sized enterprises are suitable for taking the road of "specialization and specialization"

Many people may think that all small and medium-sized enterprises can transform to take the path of specialization and specialization.
In fact, this is a misunderstanding
.
Because, although SMEs have the same status in the market, they do not know that their connotations may be quite different
.
Some have a long history of development, while others have just entered the industry; some have strong economic strength, but some are financially stretched; some are making their own unique niche products, while most companies are operating in a very low technical threshold.
The "big road goods"; some have a certain reserve of specialized talents, while most companies are almost blank in this regard
.
Just imagine, what would happen if these companies lacking characteristics, expertise, talents, and funds all swarmed to transform and engage in "specialization, specialization, and innovation"?

It is not difficult to imagine that it requires conditions to engage in specialization and specialization
.
First of all, companies must have projects that can be deeply cultivated
.
Secondly, there must be professionals who can satisfy the research and development of such products, or have the financial resources to introduce such talents
.
Moreover, the scarcity of such high-end professional talents must also be taken into account
.
Furthermore, whether it has the ability to continuously provide human, financial and material support for project development, because this road is likely to be relatively long
.
The last crucial question is, does the business have the patience to endure a prolonged period of less than expected outcomes? Specializing in specialization and innovation is not something that can be achieved only by enthusiasm.
You must do your homework.
You must have the belief that you will win, and you must have enough mental preparation and financial support to fight hard battles and bite hard bones.
ready
.

As far as I can see, among the existing small and micro waterproof enterprises, most of them started out as workshop->
.
There are many companies that entered early and made the first pot of gold, but don't think that you are very good
.
Because this kind of success is actually more derived from the spillover of policy dividends in the early stage of reform and opening up, which is "the times create heroes"
.
Needless to say, most SMEs actually have some common pain points, that is, small scale, lack of talents, lack of funds, lack of technology, and lack of management
.
It is difficult for such enterprises to bear the pain of industrial transformation and upgrading under the tide of the market economy, and most of them will be ruthlessly eliminated
.

Can enterprises in the waterproof industry successfully embark on the path of specialization and newness? Jiangsu Karen has provided us with the answer
.
This company that once created a Chinese waterproof enterprise to go public quickly.
If you understand her development history and business philosophy, then I would say that she is the first enterprise in China's waterproof industry that has successfully counterattacked with a special and new start.
You must be sure identify
.
For Karen, specializing in polymer waterproof materials can be described as "specialized"; only making national standard products can be described as "fine"; interpreting products with "white" and "integration" can be described as "special"; taking the lead in large-scale promotion in China The basement floor polymer self-adhesive film pre-laid anti-adhesion system is the first to develop and apply white polyurethane waterproof coating, and it is the first to change the dirty image of waterproof enterprises, which is called "new"
.
It is precisely because she took the lead in successfully embarking on the road of "specialization and specialization" that Karen was able to achieve leapfrog development and quickly attract the attention of the capital market
.
Just imagine, if Karen chose the same approach as most companies to vigorously develop traditional waterproof products, would it be possible to ring the bell after five years of entrepreneurship and an annual output value of less than 300 million? If you think that the case of just one company is not enough to explain the problem, then the author recommends you to have a deep understanding of the "Haidilao" in the catering industry and the "Bai Xiao T" in the clothing industry, their successful counterattacks in their respective industries and Jiangsu Karen has a similar effect
.

Mr.
Lu Xun said: In fact, there is no road on the ground, and when more people walk, it becomes a road
.
Mr.
Darwin, the author of The Theory of Evolution, described the evolution of species as follows: The species that survive are not the strongest or the smartest, but those that respond quickly to changes
.
Running a business is like the journey of life and the evolution of species.
There will always be many intersections, and you need to make choices about how to go next
.
The road is at your feet, and you still have to face and explore on your own
.

At present, compared with large enterprises, small and medium-sized enterprises have obvious disadvantages in terms of scale, cost, brand, talent, capital, channels, etc.
, and can only use "specialization, specialization and newness" to break through
.
I wish our small and medium-sized enterprises in the waterproof industry can break through successfully
.

(The original text was published in the 2022 Issue 3 of "China Building Waterproofing" published on March 15)