The hottest Nippon dealers real can fake paint age

Nippon dealers' agent system of "real can fake paint" tests brand control

Nippon dealers' agent system of "real can fake paint" tests brand control

March 2, 2012

[China paint information] recently, the paint giant Nippon fell into a "fake sales storm" among dealers. The high expansion mode of Nippon China over the years has exposed its hidden risks. Between expansion and risk control, "Nippon" fell into a dilemma

hidden dangers of high expansion

at the end of February, some consumers said that they bought fake goods at a Nippon Paint in Beijing and several distribution channels, and the fake goods were sold in the way of "real cans of fake paint". Although Wu Jialun, public relations and brand communication director of Nippon China, explained to China business news that this was the behavior of dealers, and the franchised stores were not directly operated by Nippon. However, lawyer Qiu Baochang pointed out that the franchised stores authorized by Nippon Paint are suspected of "selling fake goods", which is very harmful to Nippon brand. Nippon China, which has maintained rapid expansion for many years, has fallen into two difficulties. Papers related to the six theme areas of the conference, such as research results, academic views, engineering experience, hypothetical suggestions, etc., can be applied

Nippon is the first paint enterprise to carry out the Distribution Agency System in China. As Nippon locates in the middle end, it needs to quickly seize market share, and through the agent channel, it can rapidly expand its sales network with limited capital. Therefore, Nippon has actively developed its agent sales network for many years, and through this model, it has indeed quickly established its position in the Chinese market

according to Wu Jialun, Nippon has almost maintained double-digit growth every year in China, and has developed 1600 dealers, 3500 specialty stores and 1500 distribution stores with a huge sales network. At present, the Chinese market has become the largest market of Lishi group (Nippon China's parent company), accounting for more than half of the total sales volume, accounting for about 15% of the Chinese paint market share

the continuous expansion of the sales network has led to an increase in adverse events such as dealer fake sales. A person in the paint industry said that the development model of Nippon China has increased its risks. Because Nippon adopts the agency system in China, it is very difficult to control dealers. In addition, it has expanded to more than 5000 distribution points, so the risks are self-evident

in fact, not only nippon, but also Dulux, which has the same positioning as nippon, also adopts the agency system, which also faces the control problem of many franchisees. A person in charge of Dulux admitted that the company's control over dealers is mainly based on contractual constraints, and it is difficult for the company to supervise possible fake sales and even illegal acts of dealers

an insider told: "in fact, under the high expansion strategy of Nippon, the contradiction between Nippon and dealers is increasing day by day. In order to expand market share, Nippon continues to" press goods "for dealers. Dealers can only give up profits to complete the target in order to complete the task, otherwise they are likely to face the risk of being eliminated." Wu Jialun told that at present, Nippon and dealers adopt a one-year signing system. It can be seen that once the dealers cannot meet the needs of Nippon, they will be removed from the dealer system in the next year

"in addition, the real estate has fallen into a downturn due to regulation in the past two years, and the sales volume of the downstream coating industry has declined significantly. In order to achieve the sales target, many dealers are almost selling at par, almost becoming Nippon's" cargo handling machine " Introduction of the aforementioned insiders

in fact, the growth rate of Nippon's sales slowed down last year, with an increase of less than 10% for the first time in many years. "The market is sluggish, and under high pressure, it is inevitable that some dealers will take actions such as selling fake goods. This phenomenon has almost become the unspoken rule of the industry." An anonymous furniture industry expert told me

Nippon China is in a dilemma

but enterprises dare not slow down the pace of expansion. If they relax the market a little, they may be seized by rivals

"it can also reduce the emission of carbon and other harmful materials. The competition in the mid-range market has been very fierce. Whoever seizes the market first will take the lead." Insiders said frankly. This also reflects the current dilemma of "Nippon people", whether to develop or maintain the brand. In fact, not only the coating industry, many industries are facing the control of franchisees. The best way to maintain the brand is to give up the agent distribution channel and take the direct marketing route

Huang Tao, manager of the marketing department of the European coating enterprise fule Ge, told that fule Ge almost completely adopts the mode of Direct stores in northern Europe. In northern Europe, a place equivalent to the size of Qinghai Province in China, fule GE has established more than 700 Direct stores, and there are few illegal operations of exclusive stores, forming a good maintenance of the brand

but it is difficult to apply it to companies like Nippon. A paint industry market expert told that since the competition of medium and low-end products is mainly in the sales network, we must quickly seize the market and accelerate the expansion of sales points. "If we wait until the direct stores are built, the market has already been occupied by others, and it will be difficult to expand again."

however, the expert also said that the agency dealers are difficult to control, which does not mean that they can be laissez faire. Enterprises can restrict their illegal sales through the training of franchisees and contractual constraints. "For the sale of fake goods, consumers who buy goods can be registered, and the products purchased by some consumers can be tested to prevent fake goods from entering the market." The person said

insiders also introduced that enterprises can also appropriately establish some direct stores as examples for other franchise stores. At the same time, enterprises can also understand the market situation at the first time and respond without expanding the contradiction between manufacturers

Wu Jialun also said that because the Chinese market is too large and difficult to control, the company will strengthen communication with dealers and strengthen the training of salespersons' integrity in franchise stores in the next step