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As domestic and foreign giants pay more attention to the marginal markets of automobiles such as lubricants and auto repairs, unified petrochemicals that have consistently avoided confrontation with competitors will have to face more and more challenges.
In March 2003, the US-Iraq War was formally launched. CCTV conducted an unprecedented large-scale coverage of live coverage. A “more lubricated, less friction†advertisement allowed more people to remember the unification of Beijing. Petrochemical Co., Ltd. (hereinafter referred to as Unipec) and their products - unified lubricants.
"More lubrication and less friction" has not only become a classic advertisement for UPC, but also an important reason for the rapid development of the company.
Crevice strategy With the rapid growth of the number of China's sedan industry and private cars, China's oil market is also increasing. China has become the world’s second largest consumer of lubricants, with an annual consumption of more than 4 million tons and sales revenue of more than 30 billion yuan. The growing lube oil market has attracted many companies including multinationals and private companies. In addition to international giants such as Mobil and Shell, 4,500 local lubricant companies, including Sinopec and PetroChina, share a share of 30 billion yuan in the Chinese lubricants market.
On the one hand, it is an international giant. On the other hand, it is a local giant. As a private enterprise with an initial start-up capital of only RMB 3 million, how does Uniform Petrochemicals survive in the cracks and eventually grow into one of the top three in the domestic lubricants market? ?
For the reporter’s question, Li Jia, general manager of Unipec, expressed his own different views: “I don’t think we are living in the cracks. For the lube market, our competitors did not give full attention to them at the beginning, and The lubrication market in China is particularly large, and only a small portion of the Chinese market occupied by Meifu, Shell, PetroChina, and Sinopec is mainly a large city, which provides us with a lot of room for development.â€
Li Jia made such a metaphor. If the entire market is a hand, the foreign brands, PetroChina, and Sinopec are all fingertips, but these fingers do not become fists. There is a gap between them. The business strategy is to avoid the facts and make it empty, not to face up with others, and what Uniform Petrochemicals is doing is to fill gaps. In the reporter's opinion, this gap-filling strategy is exactly the same as the uniform petrochemical ad: "More lubrication and less friction."
As a result, Unipec has adopted a Wal-Mart-like business strategy in its early days.
Wal-Mart has become the largest retailer in the world by establishing chain stores in mid-sized American cities. China's medium-sized cities are larger than the United States, with more than 18.1 million people in more than 100 cities. Uniform Petrochemical has a broader sales market. When Unipec first entered the lube market, it faced the situation that PetroChina and Sinopec each accounted for half of the north and south. Uniform Petrochemical chose to enter the medium-sized urban market to achieve strategic breakthrough, which greatly reduced the competition from domestic large companies and multinational companies.
Unisoft's strategy is to divide the national market into three levels. In Beijing, Shanghai, Guangzhou, such a first-tier city, mainly shaping the brand image. The competition in the secondary market is not so fierce. In the medium-sized cities, the unified petrochemicals mainly do sales, and secondly do the image and strive for the market share first. In the tertiary market, unity must strive to be absolute first. “Unified petrochemical cannot be the first in Beijing, but I’m fighting for the first in Chengdu and no more. I’m competing for Leshan and Mianyang first.â€
Perhaps because the competitors are too large, the rapid development of the unified enterprise of petrochemicals has not caused much concern and containment of them. Uniform Petrol is also happy to grow under the eyes of these giants. Until Unipec's sales reached 500 million to 600 million yuan, competitors suddenly noticed this inadvertent rising rookie, and the CCTV's "exposure" was pushing Uniform Petrochemical to the stage. Under the stimulation of Unipec, the industry leaders PetroChina and Sinopec joined the advertising campaign.
With the formation of Unipec's absolute superiority in the third-tier cities and the firm foothold of the secondary cities, it seems that the frictions between these competitors, such as Meifu, Shell, PetroChina and Sinopec, are inevitable. Are you accustomed to the unification of petrochemicals that can move forward in lubrication?
Flexible marketing is the first to give competitors headaches. It may be uniform and flexible marketing tools and strong market development capabilities. Li Jiakan, who has been “immersed†for more than a decade in the lube industry, is a marketing expert.
In developing the Wuhan market, Unipec has found the largest “oil company†in the region (which is mainly engaged in imported oil), proposed a plan to invest in a joint marketing company, and promised to provide longer-term business authorization and personnel training. Wait. "Co-funding, while effectively reducing risk, can also use its network to allow it to sell my products wholeheartedly." This is precisely the mind of the unified petrochemical. In view of the characteristics of the Xi’an market, Uniform Petrochemical adopted the practice of establishing its own branch. When the branch company gradually entered the orbit and formed a model effect, Uniform Petrochemicals sold it again. In some places, we directly set up our own distributors and agents. In some markets, we directly implement secondary market and terminal markets.
“The way we open up the market is very flexible. For different markets, we will take different approaches. Where are we now? Mobil and Shell are afraid. I told our sales staff and dealers that we are When we haven't played yet, we must scare them and we must have such a momentum.For example, we want to do Guilin market, the market share of foreign brands has always been relatively large, Meifu, Shell may be in the entire Guangxi region, 6 people, but we We have 15 people in Guangxi and we have dealers. We have more than 30 people doing this market." Li Jia said with some excitement.
In addition, in the marketing process, Uniform Petrochemicals also pays great attention to the possession of medium-end funds. Li Jia’s approach is: “If our agents can probably digest my 10 boxes of products in a month, then we think of some attractive offers or activities that allow him to enter my 20-box product at a time. Into 20 boxes of me After the product, he will have to find ways to sell it, and he has less money to buy other branded products. His 2 months of purchase money are used to sell a unified product. We have to say that we have a good relationship. In the third month, we had another activity. In a matter of months, customers became habituated, and my competitors generally could not find it. It was too late for discovery."
At the same time, as many foreign lubricants have been sold in China for many years, the price is very transparent and the dealers have little profit. Uniform Petrochemical will adopt a "temptation" approach to allow more dealers to sell unified petrochemical products. "If you sell a bucket of petrochemical products, you will have more profit than selling a box of Mobil products. He certainly sells my products."
At present, Uni-Policy has established what Li Jia has called the “Four Best System†in the domestic market, namely, the largest sales network, the largest number of distributors, the largest number of products, and the strongest coverage. Uniform Petrochemical has 2,600 first- and second-tier distributors throughout the country, including Lhasa and Kashgar. The products directly reach the county-level market and target customers. The maximum development of product networks has become the biggest advantage of unified petrochemicals.
Product breakdown In many people's opinion, the rise of UPC seems to be overnight, but it is far from simple.
At the beginning of its operations, Unipeech wanted to sell its own products through gas stations. However, these gas stations sold PetroChina and Sinopec's products and did not dare to be interested in the unknown “unityâ€. As a result, Unipec wanted to sell through auto repair shops, but it also encountered obstacles. Finally, after consultations, the repair plant meets the requirements of the unified petrochemicals. Uniform Petrol will send an employee to the shop to help sell the product, and guarantee that half of the total number of goods will be sold in the store.
In this way, the unification of the petrochemical industry introduced the first batch of marketing teams in the lubricant industry. This move allowed Unipec to open up its sales gap and gain direct access to customers. It is easier for unification petrochemicals that have access to the end customer's first-hand information to more easily address customer needs and use this information for new product development. For example, China's vehicle oil market usually produces 4 liters of engine oil. When UPC learns that some customers need 3.5 liters, they react immediately. In Heilongjiang, sometimes the temperature reaches -40°C. It is not easy to start using traditional lubricating oil engines. Uniform Petrol immediately develops 5W-30 oil, which also shows good performance at -40°C.
In contact with end customers, Unipec found that the foreign products that had dominated China's lubricants at that time did not fully meet the needs of Chinese consumers. The lifespan of automobiles in China is generally higher than that of developed countries for 2-3 years, and traffic jams are common in Chinese cities. This will accelerate the engine's aging, coupled with more sand and dust in China, and it is prone to blockage of oil lines. Cleanliness is demanding, and “Yangyou†is tested in a relatively good environment in Europe and America, so its true purity is often discounted in China. The different vehicle conditions, operating conditions, road conditions, and climate, and the demand for lubricants from the models are certainly different.
"The problem of foreign products is that there is a formula in the world, what formula in the UK, or what formula in the country. China's car is still beautiful when it opened 300,000 kilometers, and 80,000 kilometers abroad will have to change a new car. Mercedes-Benz, BMW use you The foreign brands are good, but what are the 400,000 kilometers of Honda that you have opened? You want to improve the updated products according to the Chinese market, according to Chinese consumers, so as to surpass the foreign brands. We're 'unified' for the Chinese market. The breakdown of the product's efficacy is unmatched by international brands," said Li Jia.
Marketable products soon opened the door for UPC. “Our company was established in 1993. In 1994, it had a turnover of only 6 million yuan. By 1995, it had achieved 33 million yuan. It was a very good achievement for us, which was only 25 companies. All of this comes from our understanding of consumers and targeted product research.The year we segmented markets and products into the truck oil market, the turnover rose from over 30 million to 8,000. More than 7 million. Nowadays, motorcycle oil and truck oil are basically domestic brands and there are basically no foreign brands."
At present, UPC's products cover a wide range of petrochemical fields such as car oil, truck oil, motorcycle oil, industrial oils and greases, brake oil, antifreeze, and car care products. Multiple varieties, achieved sales of more than 4.3 billion in 2001.
Due to the large number of products, in order to better control the cost and better manage and produce more than 10,000 products, in 2002 the unified petrochemical cost more than 10 million, the introduction of SAP ERP management system, and achieved very good results.
Breakthrough high-end As we all know, the domestic lubricants market has been experiencing such a phenomenon: Although there are 4,500 lubricants factories in China, the main products produced are medium-end and low-end products. There are few high-end products, and there are 4,500 domestic lubricants. The total sales of high-end oil produced by oil plants account for only 20% of the current high-end market. The other 80% of high-end markets are occupied by foreign brands such as Mobil, Shell, Caltex, and BP. Although high-end lubricants accounted for only 30% of the entire vehicle oil market, the profits greatly exceeded the total profit of middle and low-end products. In this market environment, breaking through the high end will become the key to whether domestic lubricants will be established tomorrow.
In this regard, Li Jia showed great confidence. “Unified Lubricant is positioning the high-end market from the beginning. Yes, low-end oil is a good sell, no brand can sell, but the profits are too low. And we started I really want to create my own brand. Of course, this requires excellent products and excellent quality.â€
It is well known in the industry that the quality of raw materials and additive technology for the industry are crucial to the quality of lubricants. According to Li Jia, Uni-Policy is well known for its extensive use of imported base oils and additives for its domestic lubricant brands. More than 90% of its raw materials come from Fortune 500 companies. “We are the same raw materials as Mobil, and all of our raw materials are imported. You bought it from Mobil and I also bought it there. The first thing is to have the same quality, so that you have the capital to manage, fight, and fight marketing!â€
In fact, for the import of raw materials, unified petrochemicals are somewhat helpless. “A lot of oils in China are the same color as tea, and some are deeper than tea, but the color of foreign lubricants is similar to that of mineral water. The three types of foreign oils in foreign countries are not only better than domestic ones, but they are also no better than domestic ones. How much more expensive."
The "unified" base oils come from internationally renowned companies such as Japan Energy, Risshi Mitsubishi, etc. The import of composite additives is also highly adaptable to base oils, with good product quality stability and a high level of reconciliation, but the cost is much higher. As domestic raw materials could not keep up, Uniform Petrochemicals could only abandon the localization of raw materials and adopt a lot of imports.
At the same time, in order to ensure high quality, Unipec has also taken the lead in establishing a technical cooperation relationship with Far East Additives Company, a Shell company based in Singapore, introducing its compounding agent and blending technology formula into the country for the purpose of reconciling high quality grade automotive lubricants. At present, Unipec has gradually established a technical cooperation relationship with Exxon, Mobil, Lubrizol, Rohm and Haas, and a large number of internationally renowned brands to quickly absorb and digest the world's latest additive technology.
However, another question has subsequently arisen in the minds of reporters. 90% of raw materials come from imports. Through the establishment of technical cooperation with foreign companies to obtain more advanced technology formulas, unified petrochemical seems to have too many things in the hands of others, which can not be said to be a concern.
From the perspective of raw material purchases, Uni-Policy and Meifu may belong to the same supplier, but Meifu’s purchase volume and scale advantages must be unmatched by Uni-President. While UPC is ensuring the price advantage of its own products, how to more effectively control costs and ensure profits is a question that people have to think about. The current situation is that although the brands of state-owned enterprises led by “Great Wall†(Sinopec background) and “Kunlun†(PetroChina background) and private enterprises led by reunification have an absolute advantage of 80% market share, they only scored 20 points. % of market profit.
At the level of technology research and development, Unipec does not actually have any substantial development capabilities. Most of them are still collaborating with subordinate research institutions such as Mobil to use their purchase methods. The advantage of Unipec may be its “indigenous digestion†of technology.
However, when the international giants no longer slumber, understand the Chinese market with intentions, and expand sales channels, how can too many lifebloods master the unity of others?
The capital chain may be precisely because of these concerns. Uniform Petrochemical attempts to reduce the potential risks it faces by sticking to international capital.
“Now, the development of a company depends on walking on two legs. One is product marketing, and the other is capital operation. We have always had capital operations, but it is rarely published.†According to Li Jia, many projects of UPC are currently There are money from foreign investment funds.
“Our approach is to split the existing business of UPC into different sections or projects such as trucks, motorcycles, cars, etc. Different sections attract different investors. As a result, you do not account for the proportion of my entire company. , you only account for the proportion of one of my projects.The risk of such projects is relatively small, but also to maintain the independence of the company. Of course, there are also some large investment companies have been looking for us, from the beginning to require holding, we are Did not agree."
It is reported that Unipec has plans to go public. The company’s current audit and finances are operating in accordance with the requirements of market companies. According to Li Jia’s words: “We are now waiting for a good time to market. Now that the price of raw materials is rising so much, the financing situation is not very good, so we are still waiting. In fact, we already have the conditions for listing. As for the location of the listing, Uniform Petrochemical prefers overseas markets such as Hong Kong, the United States, and Singapore. This is not difficult to understand, because from raw material suppliers to technology partners, most of the unified petrochemical partners are foreign companies. At present, Unipec is actively carrying out the company's joint-stock reform.
“We hope to absorb the participation of some upstream companies, such as large international suppliers, and also hope to attract downstream companies such as automobile manufacturers to participate in shares, and of course there are some large distributors.†According to Li Jia’s concept, Uniform Petrochemical is trying to create an ecological chain of capital from the upstream to the downstream, to the circulation field, in order to attract capital and consolidate cooperation.
"Dispute" is the development of a unified petrochemical industry sooner or later. This step is not far from the positive confrontation between domestic and foreign giants. Especially in the lubricant OEM market competition.
According to industry insiders, the entire vehicle lubricants basically come from three major needs: First, the car before the factory, there are manufacturers of lubricants; Second, before the end of the mandatory vehicle maintenance period, by the designated 4S shop or dealer Replacement of lubricants; the third level of demand is after the mandatory maintenance period of the car, the owner of the service lubricants for maintenance.
From the perspective of demand, the first two parts of the market have played a decisive role in the selection of lubricants. Therefore, this part of the market is also known as the "lubricant OEM" market. At present, almost all Sino-foreign joint venture vehicles are shipped on "accompanying documents", you can only use certain foreign brands of lubricants that are "designated" or "resolute"; otherwise, some of the vehicle accidents and damages that may be caused may require your own bear. As a result, the nepotism in the lubricant OEM market has become a unique landscape: Volkswagen uses the "Folkhaus of Germany"; Hyundai uses the "Korean SK" and Toyota uses the "Japanese Initial Light."
At the same time, this year, the three main forces of domestic oil, the Kunlun PetroChina, the Great Wall of Sinopec and the unified petrochemical company of private enterprises have also begun a fierce competition in the designated oil field for vehicle loading.
Recently, Kunlun SL/CF 5W-40 was certified by German BMW, which is another OEM approval certificate after Kunlun Lubricants was approved by Volvo, General Motors, General Electric, Siemens, and ABB. Many of UPC's products have also passed the approval of API SL, SJ, CF-4, and CI-4/SL of the American Petroleum Institute, and original manufacturers of Volkswagen, Porsche, Dongfeng, BMW, Renault and Cincinnati Machinery Corporation. At present, Uniform Petrochemical has become the "lubricant OEM" manufacturer of Dongfeng Motor Corporation.
The real competition is just beginning.
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