In the past, the double eleven-day cat Jingdong sold a record mobile phone sales, but in 2015 China's mobile phone industry was not good. China's smartphone market has entered the stock market after several years of rapid growth, and the mobile phone supply chain, which has already had a serious overcapacity, has entered the market cleaning stage. A large number of small and medium-sized enterprises have broken their capital chains and have declared bankruptcy.
At the beginning of 2015, the mobile phone supply chain industry started the cold year by the suicide of Gao Min, chairman of the mobile phone foundry of Dongguan Mobile, and 10 months later, the Shenzhen star enterprise Fuchang Electronics, which supplies mobile phone accessories to mobile phone manufacturers such as ZTE and Huawei. The news of the bankruptcy announcement has pushed the bleak survival of the Chinese mobile phone supply chain industry to the public.
After that, Dongguan Jingchi Plastic Technology Co., Ltd. immediately closed down with Fuchang Electronics. Jingchi Plastic, which is similar to Fuchang Electronics' main business, also issued a debt liquidation announcement letter. This company was established in 2013, mainly for TCL, Haier, Coolpad, etc. Manufacturers of mobile phone manufacturers supplying mobile phone cases, molds and other accessories have closed down due to the arrears of hundreds of mobile phone shell material suppliers over 30 million yuan.
On October 15th, Huizhou Chuangshi, a touch screen manufacturer with 5,000 employees, was discontinued. In a notice issued to employees, it said that “the company has no funds to support the operation, and the holiday is two months. Please ask the staff to look for work temporarily.†The suspension of the production of Huizhou Chuangshi directly led to the collapse of the capital chain of six suppliers whose goods were in arrears.
These closed enterprises are all large-scale companies with a certain reputation in the industry. They are either abandoned by market demand due to backward technology, or the chain of funds has collapsed after expansion. They also owe more money to suppliers, banks and employees, and have a greater impact on the entire industry chain. And the tide-like small enterprises in the "mobile phone supply chain collapse tide" that can't see the name in the media reports have become the norm.
Chen Guoyan, manager of the touch screen manufacturer Shenzhen Lingxin Optoelectronics, told i Dark Horse that only 19 factories that did touch screen business in October closed down. The WeChat public account “Tang Bohu Burning Creamâ€, which specializes in the mobile phone supply chain, listed a list of touch-paying vendors with severely bad payments in its October 20 article. The company’s name on this list is 32. And this is just the number of touch manufacturers that closed down in October.
The entire mobile phone industry chain is very long, from mobile phone manufacturers such as Apple and Xiaomi, to Foxconn and BYD for OEM, to a series of mobile phone components such as chips, circuit boards, molds, touch screens, cameras, housings, etc. Manufacturers, upstream of these manufacturers are suppliers of raw materials for them. The collapse of a medium-sized manufacturer such as Huizhou Chuangshi will affect hundreds of upstream and downstream companies.
I Black Horse selected Fuchang Electronics, Leading Optoelectronics and Coca-Cola to shut down the company as a case study, hoping to see why the Pearl River Delta mobile phone supply chain manufacturers have been closed down.
[Case 1] Fuchang Electronics: Death of a technology-stricken company喧嚣
Shenzhen Fuchang Electronic Technology Co., Ltd., a company established in 1997 with precision plastic mold manufacturing, 3C and wood plastic products development and design, and its information displayed on its official website, Fuchang is a cooperation between Huawei and ZTE. partner. According to the 2014 report of Shenzhen Municipal Market Supervision Administration, in 2014, Fuchang Electronics' operating income was 459 million yuan, net profit was 19.05 million, total assets were 725 million yuan, and liabilities were 580 million yuan.
With the collapse of Fuchang, this once star company in Shenzhen has now become the "star representative" of the collapsed company in the national media reports. And its two partners, ZTE and Huawei, heard that the first reaction to their failure was to send employees to the factory to take back production equipment to reduce losses.
In response to i Black Horse, ZTE emphasized that Fuchang Electronics is only one of the company's terminal structural parts suppliers, accounting for a very low proportion of terminal purchases. The company has a well-established supply chain system to ensure continuous production in unexpected situations. The company has now urgently switched suppliers to eliminate the delivery impact of Suchang’s sudden suspension.
In the mouth of Fu Jin’s electronic legal representative Chen Jin, the financial gap of 80 million was overwhelmed by Fuchang. Its debt to suppliers was 270 million, and it was collectively sued by ten suppliers in August this year.
Although there is news that Fuchang owes huge debts to the company's shareholders to transfer assets, but Fuchang was quickly abandoned by Huawei ZTE because Fuchang's own technical capabilities are lagging behind.
Fuchang's main business is to produce mobile phone plastic casings. However, with the metal body gradually replacing the plastic casing in the past two years, it has become the main design material of mobile phone products. Fuchang has been satisfied with the processing and production of plastic shells abandoned by the market, and the behavior of no transformation is tantamount to taking the initiative to stay away from the market.
In the view of Liu Yunxiu, the general manager of the listed company's Yi Yatong Supply Chain Center, the collapse of Fuchang is appropriate. "The mold of Fuchang production line is not its, the mold is Huawei.... It has no technical content, and Huawei's billing period is longer than the supplier's billing period, then its capital chain will break, which is very Normal. Because it doesn't have any core technology and no right to speak, such a company should not be called an electronics company strictly."
Like Fuchang, the two companies that mainly produce mobile phone plastic casings, Dongguan Jingchi Plastic Technology Co., Ltd. and Shenzhen Hongyixing Plastic Products Co., Ltd., have defaulted in arrears after the large amount of payment from suppliers in October. After the mobile phone design enters the metal casing as the mainstream stage, it still holds the original customers and orders, thus facing the dilemma of customer loss and order reduction. It is a common problem that such technology products are out of the market and are eliminated.
[Case 2] Leading Optoelectronics: Small enterprises after expansion are dragged down by the big market
He Qian received a call from the manager at 4 am on October 21 and was told that his boss was running. Just four hours ago, he was still staring at the warehouse. When he and other colleagues rushed to the production workshop in Nanchang No.1 Industrial Zone, Gushu, Baoan District, Shenzhen, the door was closed with a notice of liquidation of employees and creditors.
The notice stated: "Because of the market downturn, since 2015, the shareholders of Shenzhen Leading Optoelectronics Co., Ltd. have tried their best to borrow millions of dollars to save the company's normal operation. The company's production and operation have already experienced serious difficulties. The company's private borrowing has exceeded 6 million yuan, the arrears of suppliers' payment exceeds 16 million yuan, and the wage arrears of workers has exceeded 2.5 million yuan. It has been seriously insolvent, and the company has officially announced the liquidation of the business."
Founded in 2009, Leadin Optoelectronics is a manufacturer of touch screens for mobile phones. When the company closed down, there were nearly 250 employees, divided into two business divisions, TP touch screen and full-touch touch screen. The customers were mainly small-brand mobile phone manufacturers in the smart phone market such as Optimus and Bird.
On the official website of the letter letter optoelectronics, there is a column that describes the ten-year development plan set up by the company owner Huang Liang Dart for the letter. The initial stage of Leading Optoelectronics was to “focus on the development and production of resistive touch screens, and establish a foothold in the market†from 2009 to 2011. The positioning development stage from 2012 to 2015 should be “low-cost high-quality expansion...big business Scale, strengthen the market and management"; the goal of the letter for the next five years is to "promote the company's listing."
The initial stage of Leading Optoelectronics is in line with the start-up time of the Chinese smartphone market. Following this wave, the company's size has been 70 times from March 2009 to 2015. However, in the last three months of the development phase, Leading Optoelectronics did not have the idea of ​​“bigger enterprise scale, big market and management†but died.
The reason is expansion.
According to the introduction of Chen Guoyan, the manager of the optical business of the letter, the company has experienced two major expansions. The first expansion was between 2011 and 2012, and the company's optical expansion to the front end of touch screen production shortened the supply chain. This expansion enabled the company to achieve an annual profit of 10 million in those two years.
The second expansion from 2013 to 2014, the letter photoelectric conversion products from TP to full fit, invested 10 million to increase equipment, staff and plant. But this expansion did not bring profits. Wang Jiang (pseudonym), head of the full-fit business unit, introduced to iHai Ma. The full-fit production line was previously not done by Leading Optoelectronics. When it was first started in 2014, the production details and processes could not be connected, but a large number of single. The result was a large amount of orders at the time, but in the end it turned into a loss due to poor management.
The investment of 10 million and the loss in the early stage of production made the chain of the letter of Optoelectronics have been tense since the second expansion. Since the second half of 2013, the company has been in arrears with employees, and the funds used to buy raw materials have become tense.
The solution is to borrow. Huang Liang, the owner of the letter optoelectronics, borrowed money in the name of the company and in his own name. However, since 2014, the whole market has been fiercely competitive in the factory with full-fit process, and profits have begun to plummet, with gross profit falling from 40% to less than 10%. A lower level of profitability is difficult to compensate for the previously caused loopholes in the capital chain.
Leading Optoelectronics began to lay off employees, arrears in employee salaries and supplier payments. The number of employees has decreased from more than 400 in October 2014 to more than 200. In the event of its closure, it owed four months of salary to the production line staff and six months of salary for management personnel. Suppliers also frequently come to collect debts.
In the end, the company owner Huang Liang Dart posted a closure notice on the door of the production workshop and ran.
Among the searchable failing supplier companies, SMEs dominated by touch screen manufacturing accounted for the majority of the list. These companies also entered the market and expanded as the mobile phone market soared in 2013. However, there was no substantial profit support in the follow-up, and the problem of tight capital chain intensified in 2014 and 2015. The closure will follow.
[Case 3] Coca-Cola mobile phone: What is left except for Internet marketing?
The Coca-Cola mobile phone is known for two things: First, the Coke Mobile Phone 3 crowdfunding in Jingdong in December 2014 created a crowdfunding record of 16.5 million crowdfunding within 25 minutes. The other is the news of bankruptcy in October 2015.
The reason for the death of Coca-Cola was that its investors stopped investing in it. Counting the notable factors on the Coca-Cola phone, imitating Apple, life-changing machines and starting an Internet name. None of these three points is really related to the mobile phone product itself.
In the context of China's mobile phone market shuffling and users gathering with a few brands, it is impossible to survive in the fierce mobile phone red sea by merely making Internet marketing events. The collapse of Coca-Cola is the normal result of market cleaning. The mobile phone manufacturer who borrowed the Coca-Cola name and imitated Apple is not the first Internet phone brand to fall, not the last one.
In addition to Coca-Cola, mobile phone brands such as Orange, Hundreds, Bowo, THL, etc. are also degraded mobile phone brands. Previously known as the “food†brand of mobile phone brands such as green orange, rice and other mobile phone brands or Sales are getting smaller or smaller and have disappeared.
According to the "2014-2015 China Domestic Mobile Phone Market Research Annual Report" released by the Internet Consumer Research Center, the number of local vendors participating in the Chinese mobile phone market in January-May 2014 was more than 80, with the highest in May, reaching 89. Home, but since June, as the competition in the mobile phone market has intensified, the number of participating local manufacturers has dropped sharply to below 70, and it has fallen to a minimum in December, with only 59.
Another set of data from the report shows that in 2014, the proportion of domestic mobile phone brands, Huawei, Lenovo, Meizu and other 10 brands accounted for 88% of the proportion. Baidu Index data also shows that in the "Today's mobile phone product list" on November 11, 2015, the entire list was divided by eight manufacturers including Apple, Samsung, Huawei, Meizu and Xiaomi.
From the above data, we can conclude that although there are still Internet companies such as Qikuo and LeTV intrusion into mobile phones, after several years of melee, the pattern of China's smart phone market is basically stereotyped. Less than 10 mobile phone manufacturers such as Huawei, VIVO, and Xiaomi will occupy most of the market share and attention, and will be more and more concentrated. And the third- and fourth-line mobile phone brands like the big cola will gradually disappear from the people's vision.
From this perspective, the death of Coca-Cola is telling people that the cleaning of the mobile phone market has accelerated.
[reason review]
In 2011, China’s smartphone sales were less than 100 million units. In 2013, this number surged to 343 million. Growing with sales is the number of mobile phone brands and a large number of suppliers built behind them. In 2013, when Linkex Optoelectronics converted to full-fit products, there were more than 600 such factories in Shenzhen alone during the same period. The three years from 2011 to 2013 are also the best days for these suppliers to make money.
But this surge is not good for a long time. In 2014, China’s smartphone sales were 387 million units, an increase of 12.83% year-on-year. Shipments in the January-October 2015 period were 408 million units, an increase of 12.7% year-on-year. Compared with the double-digit growth of mobile phone sales in the past two years, China's mobile phone market has now changed from an incremental market to a stock market.
At the same time, Xiaomi lowered the price of mobile phones to the price war caused by 1999 and 799, and the profit margin of the supply chain was also rapidly lowered. The traditional TP touch screen factory has been powerless, and the profit margin of mobile metal components has also dropped from 40% to less than 10%.
This has plagued small and medium-sized manufacturers that have expanded in 2013, just like LinkedIn. Waiting for a large amount of capital investment is no longer a crazy market demand, but a fierce competition and a depressed profit level.
In addition, China's labor costs are increasing, and the design language and production process of mobile phones are constantly being updated. The resulting increase in costs has led to fewer and fewer profits. After the accumulation in 2014, these small and medium-sized enterprises with tight capital chains have no way to finance without being able to alleviate through profitability, and entered the peak period of closure in 2015.
To a certain extent, after the overcapacity supply chain system and the swarming mobile phone brands entered the clean-up, mobile phone manufacturers such as Huawei and Xiaomi, which have a large market share, and large-scale suppliers that have already listed and are well-funded have obtained industrial integration. Opportunity. In the process of market cleansing, the market share once occupied by those failed companies has flowed into the hands of living companies. In fact, this is the law of the natural development of the market economy, and the survival of the fittest.
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