In the electronics market, Philips used to be a dazzling giant. Today, however, they have been reduced to European Antarctics. Philips, which once created brilliance in the name of an electrical giant, is now accused of making huge profits by selling fakes.
Philips sells products that are either not made by them or may have quality issues. This has been confirmed by recent events. The U.S. Food and Drug Administration issued a warning to Philips on Nov. 28 due to the frequent failure of one of its home ventilators. At the same time, in China, the Food and Drug Administration has also issued a product recall announcement for Philips, involving medical magnetic resonance imaging systems. The blockbuster release of these two pieces of news made Philips' stock price drop by 5 on the day44%。
The negative image of Philips is not just triggered by the events of these two days, it is the result of years of accumulation. Philips has become the "OEM king" in Europe, and in addition to razors and electric toothbrushes, the household appliances sold under the name "Philips" are likely not to be real Philips products. This approach made it easy for Philips to make money, and from January to September this year, Philips' revenue reached 1311.7 billion yuan, equivalent to about 1020 yuan200 million yuan.
This kind of OEM operation is not uncommon in the electronics industry. In order to reduce production costs, many companies license their brands to other manufacturers. In this way, companies can take advantage of the production lines and technology advantages of their partners, while enjoying the sales growth brought by the brand effect. However, problems arise when businesses lose control over the quality of their products.
Philips' approach is undoubtedly playing on consumer trust. Consumers often buy Philips products based on their trust in the brand and their expectations for the quality of the products. However, when they find out that the product they are buying is not a real Philips product, or even has quality issues, consumers' trust in Philips can be severely hit. This is undoubtedly a crisis for a brand that once dominated the industry, and quickly lost market support.
Philips' choice of such an OEM operation may be due to short-sighted interests. They are able to quickly expand their sales in the marketplace while also being able to easily make a profit through licensing fees and the difference in the price of low-cost goods. However, this practice ended up being a short-lived overnight success. Once the brand image is damaged, consumer support will gradually evaporate. The establishment of a good brand image requires long-term investment and hard work of enterprises.
For Philips, will they be able to regain the trust of consumers?It's a tough question. Consumers have lost patience and trust in Philips, and competition from other brands is getting tougher. Philips faced the huge challenge of market competition and rebranding. It is only through real effort and quality products that it is possible to regain the support of consumers.
In the electronics market, brand trust and product quality are the foundation of an enterprise's survival. Philips was once a shining giant, but now it is under fire for being a white-label king. OEM management can only obtain short-term benefits, and in the long run, only real efforts and persistence can regain success. It remains to be seen whether Philips can re-emerge.