This afternoon (March 6), Tao Chengjun received a letter from Nan Shunzhi, chairman of the board of directors of Deer Marble Tiles Super Anti-Scratch, to ceramic enterprises. He said, "I know the pain and struggle of doing subtraction", but "to create a global brand, we should maintain focus and innovation. Focus is the only way to create a global brand". Because with the increasing openness of the Chinese market, more global brands will enter the Chinese market to compete with us. How can we compete with them? Only global brands can compete with global brands.
The following is the original text of the open letter.
Welcome everyone to read the message and discuss together:
At the beginning of 2020, the sudden outbreak of the COVID-19 will inevitably have a big impact on the market economy which is on the track of stable development, and the ceramic tile industry will also be greatly affected. Recently, many leaders of ceramic tile companies have talked to me about the market situation this year, and in their communication, I can deeply feel the anxiety of my peers.
How can we save ourselves in the face of a crisis? How to seize opportunities for development during the post pandemic period? I have some feelings about this that I would like to share with my peers.
Firstly, enterprises are a part of society.
Enterprises are the cells of society and should be taken from the people, used for the people, and bear social responsibility. We all talk about the way of management, what is the way of management? I believe that the way to operate is for the enterprise to develop better. If the development of the enterprise is not good, it may be that the enterprise wants to do charity is not enough. Deer Marble Tiles launched two donation activities in this epidemic, and jointly launched public welfare activities with Tencent Home Furnishing and Aide Fund, which donated materials and showed a sense of social responsibility!
Secondly, innovation and globalization are two pillars that resist risks.
Nowadays, the market environment is full of uncertainty, and the risks faced by enterprises are more severe than ever before. This requires us to remain vigilant and have sufficient capabilities to respond to sudden market risks. For the ceramic tile industry, I believe that maintaining sustained innovation capability and building a global brand are two pillars to resist risks. Firstly, the ceramic industry needs to maintain its ability for continuous innovation. In the past, if companies had more advertising and higher brand awareness, they might have won. Today, your product must have innovation and its own core technology, which is the fundamental difference. The market situation in the ceramic tile industry has been poor in the past two years, with two types of enterprises feeling pressure from the market. One type is enterprises that rely on low prices to survive; The other type is enterprises that compete based on brand awareness. To be frank, we also came this way. Nowadays, we have embarked on the path of technological innovation, relying on technological innovation to cope with market competition. In 2019, the ceramic tile market was weak, and our Deer Marble Tiles national market grew by 63%. I think companies in the ceramic industry should break away from low prices and value innovation. Secondly, the ceramic industry needs to have the ability to create global brands. The globalization development of Chinese ceramic tile enterprises has never been so urgent. In the 40 years before the reform and opening up, we imported advanced equipment from abroad and made efforts by our ceramic workers themselves to achieve the largest production scale of Chinese ceramic tiles in the world. How to transform China from a major producer to a brand powerhouse? Where are the opportunities for Chinese enterprises? In the past, Italian ceramic tile companies have already sold 70% of their tiles at high prices globally, at a price twice that of ours. In the next 10 to 20 years, Chinese ceramic tile companies will definitely create a group of global brands. This epidemic has made me more convinced of the importance of building a global brand. If a company is a global brand, relatively speaking, China is a single market rather than the entire market. From the perspective of this epidemic, global brands have been less affected, such as Starbucks closing its Chinese stores, but the global market still rotates. With the increasing openness of the Chinese market, more global brands will enter the Chinese market to compete with us. What are we competing with them for? I believe that only global brands can compete with global brands. China's increasing global influence provides us with an excellent opportunity to create a global brand. In the past decade, a group of Chinese brands such as Huawei, Gree, and Haier have bravely taken the lead in the global market, continuously creating influence and demonstrating the unprecedented strength of "Chinese brands". China will have more products going global and more brands going global! Our ceramic industry should seize the opportunities given to us by the times.
Creating a global brand should maintain focus and innovation.
Global brands must be extremely focused. Most ceramic companies in China are small and comprehensive, because in the past, real estate development was very fast and supply was scarce. Many successful companies were unwilling to be lonely or even cross industry operations, all wanting to complete their categories. Most companies have several brands with the same products, but with different bottom standards. Many companies have not created a competitive brand, so the brand is very weak and lacks competitiveness. I am well aware of the pain and struggle of subtracting. There is also a lot of controversy in our Deer Marble Tiles subtracting. When we focus on Super Anti-Scratch marble tiles, dealers, internal teams, shareholders, media do not understand, and competitors maliciously attack, I also bear a lot of pressure. So, I understand the approach of my peers. However, focusing is a necessary path to building a global brand. In the past, the export of China's ceramic tile industry was trade oriented and relied on low prices. The important force behind Huawei's ability to become a global brand is innovation. Henglitai, an important ceramic equipment enterprise in China, is very worth learning from. By focusing on independent innovation of press machines and maintaining strategic focus, Henglitai is likely to become a globally renowned brand.
We have tried some innovations, and currently the results are quite good. Let me share with my peers:
Innovation in texture. I have personally visited Italian stone exhibitions, mines, and global stone markets to search for natural stone textures. I have used these textures as a blueprint for tile design, which was re designed by Italian design director Robert. Innovation in printing technology. We use the American Starlight SG600S nozzle, hope to combine the new generation ultra-high definition inkjet machine with traditional screen technology to make the natural stone texture clearer, more transparent, and more natural and realistic. Innovations in Super Anti-Scratch have led to the development of a new generation of Super Anti-Scratch diamond glaze in collaboration with the Italian company Corbia Glaze, which has a wear resistance three times that of ordinary ceramic tiles. 2020 is a turning point for domestic ceramic enterprises. During this period, you will find that good enterprises will get better and worse, while bad enterprises will get worse and worse. In 2019, we have taken a small step in product innovation and global branding. Based on innovation and new brand, we have carried out trademark protection in more than 100 countries around the world, applied for "Super Anti-Scratch" patent technology in the world, and reached cooperation with Hilton New Zealand, Marriott Kuala Lumpur, Shangri-La Hotels and Resorts in Kuala Lumpur, DANS LE COEUR Hotel in Japan, Sheraton Malaysia and other world-famous hotels. These hotels have listed us as their preferred supplier. Finally, I hope that our ceramic industry can build a global brand based on innovation. Let's wait and see! Best regards, good luck with the start of the project!
The author is Nan Shunzhi, Chairman of Deer Marble Tiles.
