Chapter 7 Chapter 2 Office Stationery——Great Wisdom of Small People

If you want to sum up the situation of China's stationery industry in one sentence, it will be "small goods, high growth, big market".If you think that the stationery industry is just a small business of selling erasers and pencils, then you will not only miss a lot of opportunities for success, but you may even encounter failure in the foreseeable future!In fact, the stationery market covers goods including document management supplies, desktop stationery and other high-tech office equipment, and is one of the fastest growing industries in China today. More than 20 years ago, China's stationery industry was only an inconspicuous part of the department store industry.When the domestic planned economy was gradually transforming into a market economy, China's stationery industry began to differentiate from the department store industry and became an independent industry.Later, China's economy developed rapidly, the society and individuals became richer and richer, and the country paid more and more attention to culture and education, and the development of the stationery industry gradually matured.Stationery is a domestic commodity, which has great potential for development in the Chinese market.

We found the "2007~2008 China Stationery Market Analysis and Investment Consulting Report" of China Investment Consulting Network and the "2007 Global Stationery Market Insight Research Report" of Intellinb Consulting Company. According to the analysis, there are now more than 8,000 stationery manufacturers nationwide Enterprises, there are nearly 30,000 stationery stores, more than 3 million office stationery employees, and the total sales have exceeded 100 billion yuan.The research report predicts that the stationery industry will continue to maintain a compound annual growth rate of no less than 20% in the next 10 years. 20%!Has your business ever grown at such an incredible pace?

Figure 2-1 shows the development trend of the stationery industry in recent years.The total output value of my country's stationery industry above designated size has been rising continuously, from 30 billion yuan in 2006 to more than 60 billion yuan in 2010!But in just five years, the total output value has tripled!It is because the Chinese stationery consumer market has huge prospects, so more and more foreign large-scale stationery brand distributors and retailers have entered the Chinese market, which means that the competition in the stationery industry will intensify in the future.

The stationery market can be roughly divided into two major sectors, namely "individuals, households and small businesses" and "large enterprises and government departments".The same is to buy stationery, but if you think that you can treat both with the same attitude, then you are doing it wrong at the beginning. The requirements of the two for stationery suppliers are completely different.Let's take a look at the characteristics and development trends of the two markets. 1. Individuals, families and small businesses With a population of more than 1.3 billion, China is the most populous country in the world, which shows the size of this market segment.Compared with large enterprises and government departments, ordinary consumers are smaller in scale and have lower demand for stationery.What is low demand?Just think about what you pay attention to when you go to buy desktop stationery yourself.Is it as long as it is cheap?What door-to-door delivery, after-sales service is not so important.The average consumer has low time costs and does not value the convenience of the shopping process or the completeness of after-sales support when purchasing.In other words, price is what this group of customers cares about.

General consumers buy stationery for the actual needs of using stationery, and their requirements are relatively basic.Since customers' needs are easy to meet and the barriers to entry into the light industry are low, many small-scale stationery manufacturers are actually competing in this market. Figure 2-2 counts the proportion of different sales stationery companies.Among them, 40% are stationery manufacturers with sales of less than 5 million yuan, and 49% are stationery manufacturers with sales of more than 5 million but less than 10 million yuan. Together, they account for nearly 90% of the market sales.It can be seen that the Chinese stationery market is dominated by small and medium-sized stationery suppliers.Among these 90% suppliers, more than 70% of the competition focuses on low-end products, and most of them only produce a single product.If you are one of these 70%, then you need to pay attention, because this kind of low-end stationery products have already experienced overcapacity, so these 70% of stationery companies are doomed to fail.

2. Vicious circle caused by isomorphism: 70% of people will do wrong things Seeing that the needs of consumers are so easy to meet, what do you think in stationery companies?There are two options: one is to compress costs; the other is to use service differentiation to increase value.Everyone is well aware of the style of Chinese companies. The 70% of companies that are doomed to failure mentioned above have chosen the path of no return to reduce costs. Cost reduction directly exacerbates the congenital defect of isomorphism of stationery products.What is an isomorphism problem?That is, in the eyes of consumers, all products in the market have the same style and function.Why does this happen?All stationery companies sell goods at low prices, which will naturally cause a price war and reduce gross profit.Due to fierce cost competition, companies have no choice but to reduce marketing and R&D expenses, which will affect brand building in the long run.God!No research and development and no new design, the result is an important reason why consumers think that all stationery is the same, so stationery companies can only continue to sell goods at low prices, resulting in a vicious circle, which in turn affects the entire industry.

Why is 3M so successful?Isn't it that they will hire the best designers to design stationery?Thus making their stationery "different". 3M's stationery is all produced in China, everyone produces stationery at the same time, but the 3M label can be sold at 2 to 3 times more expensive.what is the reason?Is the level not enough?No, it's because 70% of companies chose the wrong path, only knowing how to reduce costs and disregarding differentiation. Furthermore, the capacity of this market segmentation is linked to the total population of China, and it is difficult to become a driving force for the further development of the stationery industry when the population is gradually stabilizing.The market sector is already full of competitors, and they have further lowered the gross profit margin.Isomorphism causes fierce competition, and even creates a vicious circle with the goal of pure bargaining.We found a stationery supplier on the Internet expressing helplessness in this situation:

At present, in many private economies in China, you can register a company with hundreds of thousands of yuan to produce stationery, and compete viciously at ultra-low prices. Notebooks, booklets and other products produced by processing are even sold at a price lower than that of waste paper at exhibitions, which seriously affects and restricts the pace of domestic stationery branding in the international market. Does this text express your feelings?This market sector is extremely unfavorable to the development of stationery suppliers. If you don’t want to become the 70% that will always fail, then you must provide better services. Ordinary families and small businesses cannot afford these value-added services, so you must find another sales target.

3. Large enterprises and government departments Large enterprises and government departments have a large scale, and the demand for stationery is also quite large.Since the purchase of stationery has become a daily routine of work, when they make purchasing decisions, apart from price and quality, they also need to consider the convenience of purchasing, after-sales supporting services and so on.You may think, individual consumers pay attention to price, don't large enterprises pay attention?No!They all want to control costs, especially in such small things as purchasing stationery.But we ignore the most different place between large enterprises and small enterprises: the difference in time cost.

What is time cost?Simply put, it is the ratio of employee time to income.The time cost of large organizations is generally higher.Unlike ordinary consumers, every process in the office is completed by salaried employees, and some large companies need to spend more to set up some departments like "administration department" to manage stationery.If the stationery merchant can shorten the procurement time, and even cooperate with the office to improve work efficiency, etc., then the company's salary expenditure will be reduced accordingly, and the cost of the "administration department" can be saved a lot.Employees can concentrate on creating wealth for their bosses.For this reason, large organizations are willing to pay higher prices for stationery.

Of course, everyone wants to be a stationery supplier to a large organization.However, because large organizations purchase not only the actual needs of using stationery, but also other more complex needs.Therefore, not all stationery companies have sufficient conditions and capabilities to meet this demand, so the threshold for industry segmentation of "large enterprises and government departments" is relatively high.The complexity of requirements also creates an opportunity to break the isomorphism of the stationery industry, because whoever can perfectly meet customer needs and improve work efficiency is a unique stationery manufacturer. On the other hand, since China's reform and opening up, the economy has developed rapidly.More foreign companies have opened offices in the mainland, and the scale of local companies has also increased.Therefore, these large enterprises are a newly discovered continent for suppliers specializing in office stationery.The market potential provided by the new market is no worse than that of small stationery companies relying on "internal natural growth". We have determined the market segment of "large enterprises and government departments" that needs to focus on high growth and high profitability.Choosing the right customers is the first step that 30% of smart suppliers will take.But what should be done to get a piece of this market segmentation?If you don’t grasp the essence of the industry mentioned below, then the enterprise will also fail. Then you are really sorry for the 70% of enterprises that are doomed to fail from the very beginning! To find out the essence of the office stationery industry, we must answer a question: "Why do large organizations use stationery?" To grasp the psychology of customers, we must reach three levels. Level 1: Practical Needs In order to solve the most basic needs of human beings for writing records and expressing graphic information, such as pencils for writing, rulers for measuring, erasers for deletion and so on. The second level: increase work efficiency With the rapid development of technology, the same need can be met by faster and newer methods.For example, in the past, copying documents required manual copying, engraving and printing, and then developed to typewriters in the 1980s.Nowadays, the competition among enterprises is becoming more and more fierce. If you want to outperform your opponents, you need to complete the most work in the shortest time. Efficient stationery becomes a good helper. Enterprises that can complete the first and second levels should not be too happy, because they are only necessary conditions for the stationery industry. There are thousands of suppliers in China competing on these two levels.Due to the low technical threshold, fierce competition in the same industry has led to a decline in gross profit margins, triggering a vicious circle of isomorphism.If you want to stand out in the office stationery industry, you must accurately grasp the mentality of entrepreneurs and devote yourself to becoming a working partner of the enterprise. Highest level: working partner Working partner seems to be an illusory concept, let's analyze it together.To put it simply, it is actually a team that solves problems for the enterprise, which can be subdivided into two types: external working partners and internal working partners. (1) External working partners The team will appear in the company's value chain, and customers will pay for this service, so the team has a direct relationship with the company's profitability.For example, logistics companies and raw material suppliers are external working partners of enterprises. (2) Internal working partners The team will not appear in the company's value chain, and customers will not know its existence.The positions of internal working partners are not obvious, but the company cannot function without them.Do you think people in accounting firms or banks cook their own lunch or clean the office every day?Food and cleaning, respectively, are seen as chores that businesses typically pay to have experts sorted out.Cleaning companies and outsourced canteens came into being, and they became internal working partners, solving the problems of clean office environment and meals for enterprises.Accounting firm clients don't pay for the accounting firm's cafeteria, and they don't even know it exists.The value provided by the outsourced canteen and its profit model are very similar to our stationery suppliers. Therefore, stationery suppliers should also be committed to becoming an internal working partner of the enterprise and providing solutions for an efficient office environment.When the scale of enterprises increases, they all tend to outsource non-core business so that they can focus on their work and reduce time costs.Stationery suppliers must also grasp the corporate representative's fear of trouble, and take care of all stationery-related trivial matters in order to win. How troublesome is it to buy stationery?Office documents require different stationery from manufacture to disposal.Remember the 70% of failures?They can usually only provide a single stationery.Therefore, every time you purchase stationery, you have to negotiate with different small stationery suppliers.Ordering stationery from different small stationery suppliers not only wastes manpower and material resources, but also makes communication difficult and quality control difficult.It's so troublesome, no wonder some companies have to set up special departments to serve them. Do you still think that the stationery industry is very simple?We must always remember that what companies are willing to pay for is not only the value of the stationery itself, but a reliable and efficient office environment.The key is to provide a one-stop office stationery solution at a reasonable price, so that employees can concentrate on the problems they really need to solve. "Entrust the supply of stationery to an expert, and the staff will concentrate on doing great things!" This is the essence of the office stationery industry!do you understand?With a clear goal, the next step is to discuss the technical level.The following will use the cases of different stationery suppliers to discuss how to realize the essence of the office industry, specifically how to become the company's "internal working partner".You may ask: what should be the first step?