A Study On The Development Of The Chinese Home Appliances Retail Industry

For decades, enormous changes have taken place in the operation scale, operation forms and management patterns of Chinese home appliance retailers, giving birth to certain amount of large home appliance chain businesses. However, the competition gets more fierce with the giant multinational chain businesses gradually entering the domestic market. It is high time we addressed the problems and improved the overall competitiveness of Chinese home appliance retail chain businesses. And the key of which is to formulate scientific development strategies, clear development direction from the strategic point of view, which is exactly what this paper is dealing with.The paper mainly falls into five parts:PartⅠ:Theories of chain operation, including the definition, contents, characteristics and advantages of chain. Three forms of chain are introduced, namely, regular chain, franchise chain and free chain.PartⅡ:The development of Chinese home appliance retail industry. Chinese home appliance retail industry has gone through three forms: state-owned supply and marketing network under the planned economy, state-owned store sales early after reform and opening up, the manufacturer-led alignment of manufacturer and vendors. The rapid growth of professional home appliance retail chain is inevitable in the development of the industry and market.PartⅢ:Analysis of the macroeconomic environment of Chinese home appliance retail chain. The analysis, using the PEST Paradigm, shows that Chinese home appliance market is facing both opportunities and challenges, and the continuous stable growth of the macroeconomic environment and government support create a broad market for home appliance retail chain businesses. Meanwhile, problems like the entry of foreign capital, intensification of government regulation, technical deficiencies, and growing increase of consumers’ requirements are to be solved.PartⅣ:Analysis of the competitive environment for Chinese home appliance retail. Porter’s "Five-Strength Competition model" is adopted in analyzing the competitive environment, which is actually rather tough: horizontally the fierce competition inside and the threats of international retail giants’ entry outside; vertically the relationship between the executive level and the suppliers needs improving and the marketing agencies suffer from bargaining with consumers.PartⅤ:The development strategies for Chinese home appliance retail chain businesses. This part first summarizes the opportunities and threats for Chinese home appliance retail chain, and then puts forward the targeted strategies:strengthen,the supply chain management, integrate,the upstream and downstream resources; improve the relationship between merchants and manufacturers and seek common development; enhance operation efficiency and increase sales via electronic commerce; avoid homogeneous competition between industry by differentiation and take the competitive advantages of it; learn from foreign giant retailer and take the way of connotative development; peacefully compete with the manufacturer in the self-built way.The main contribution of this paper has three aspects. Firstly, comprehensively analyze the political and legal environment, economic environment, social environment and technological environment of Chinese home appliance retail chain faced, which has deepened our awareness of macro-environment; secondly, point out the major opportunities of Chinese home appliance retail chain, and these opportunities come from urbanization, the Government’s policy of expanding domestic demand and incomes levels increased and so on; Thirdly, propose development suggestion of Chinese home appliance retail chain, including combine upstream and downstream resources, strengthen the use of supply chain management, e-commerce and modern information technology, also the construction of logistics centers and learning, which could accumulate long-term competitiveness.This paper has two main shortcomings. First, this paper lack comparative analysis of national and international of home appliance retail chain, also lack gap analysis and explanation of Chinese home appliance retail chain; Second, we do not analyze deeply enough of competition situation of Chinese home appliance retail chain. Although we refer to industry competition between existing enterprises, the threat of potential entrants, substitute products industry development, the bargaining power of buyers and sellers, specific in-depth analysis still needed,especially need data supporting and quantitative analysis. Obviously, there are also other shortcomings, I would appreciate teachers’ comments, which also the content of further discuss and research.