Wen Cao Shuangtao.
Edited by Yang Bocheng.
In the Spring Festival of 2024, the "ban on fireworks" will be loosened in many places across the country.
Including Kunming, Chongqing, Guangzhou, and Changsha, all localities have issued management measures for the prohibition and restriction of fireworks and firecrackers, and various localities have also stipulated the time and regional regulations for the prohibition and restriction in the measures.
It can be said that the continuous relaxation of policies has ignited the public's enthusiasm for fireworks and made them a new attraction for Spring Festival consumption. At the same time, Donews also found in the terminal market visit that there is still some chaos in the current fireworks terminal market, and the industry still needs to continue to explore.
After entering the tenth day of the lunar month, our daily sales are almost more than 200,000. On the fifteenth day of the lunar month, the sales directly exceeded 300,000, which was about 40% higher than in previous years, and it was still in the county-level market. Fireworks wholesaler Li Ming (pseudonym) told us.
Li Ming went on to say that because his area is at the junction of Anhui and Henan provinces, there are many consumers in Henan who drive for an hour or two to buy fireworks.
These groups of people are roughly divided into three categories: first, ordinary families, who prefer fireworks such as Gatling, fairy sticks, peacock openings, etc., with consumption amounts ranging from 300 to 1000 yuan; The second is the business owner, who prefers high-end fireworks such as thousands of miles of rivers and mountains, Milan Night, multimillionaire, etc., and the purchase amount starts at basically 10,000 yuan; The third is the fireworks vendors who come by car to buy the goods, and the main sales areas are mainly in the township markets where fireworks are allowed to be set off.
As Li Ming said, behind the people's high enthusiasm for fireworks is actually the result of the joint promotion of many factors.
First of all, in recent years, more and more people feel that the smell of the New Year is disappearing. In the childhood memories of many later, he was keen to visit relatives during the Chinese New Year, but at this stage, the phenomenon of breaking off relatives is getting younger and younger.
Source: Hu Xiaowu and Han Tianze, "Young People's "Breaking Relatives": Why Did It Happen? Go? 》
Sociologist Fei Xiaotong once pointed out that rural society is closed after all, and it is just a cycle. At that time, there was a strong blood relationship between relatives, and the clan network with blood ties was the most important social network to maintain the harmony and stability of rural Chinese society. Since the beginning of the 21st century, factors such as population movement, separation of residence and place of work, and intensification of social involution brought about by rapid economic and social development are all impacting this relationship.
Fireworks have been passed down for thousands of years from ancient times to the present day and have become an important representative of the New Year's flavor. For a special node such as the Spring Festival, behind the exhaustion and involution of the year, everyone is willing to spend more on fireworks, but also to find the disappearing New Year's flavor and childhood self through fireworks. It is also in the constant fireworks that excite yourself and your family.
Finally, the popularity of short ** provides the possibility to create explosive fireworks, and fireworks manufacturers continue to innovate in fireworks, so that the consumer base of fireworks continues to expand.
Such as Gatling, dog poop fireworks, hen laying eggs, these fireworks are not only sought after by young people, but also loved by many children. Many parents feel that it is only once a year anyway, and it is more important than anything else to make the children in the family happy during the Chinese New Year, and they are naturally willing to spend more on fireworks.
Source: **, Douyin.
The popularity of the fireworks market during the Spring Festival this year will not only drive the development of the entire industrial chain in the upstream, including papermaking, printing, saltpeter and metal mining, etc., but also in the downstream to connect with warehousing and logistics enterprises, as well as terminal sales channels such as wholesale and retail stores.
In the case of Honghe Bridge, one side of the bridge is Hongheqiao Town, Funan County, Anhui Province, where fireworks are allowed by local policy, while the other side of the bridge is Huaibin County, Henan Province, where fireworks are prohibited by local policy. The difference in policies between the two places has made many Henan consumers choose "Henan to make money and Anhui flowers" and "contribute to Anhui's GDP".
Many Henan consumers went to Honghe Bridge to purchase and set off fireworks, turning Honghe Bridge, which was originally only a rural ** town, into an "Internet celebrity check-in place" in the two provinces. Even during our visit, we found that before the Spring Festival and Chinese New Year's Eve, the local fireworks have turned the night into day, which has also driven the popularity of local fireworks, gas stations, restaurants, accommodation and other formats.
In addition to the township market, Liuyang, Hunan, as the largest producer of fireworks in China, will hold a number of fireworks activities in Liuyang in 2023. According to Hunan **, each fireworks event in Liuyang attracts an average of more than 30,000 tourists, of which 95 are from outside Liuyang06%, driving cultural tourism consumption of more than 20 million yuan, and radiating to drive rural tourism and catering and accommodation industry, forming a leisure model of "visiting the countryside during the day and watching fireworks at night".
Although fireworks are beautiful, because they are flammable and explosive products, express delivery companies are extremely strict in controlling fireworks. Zhang Yang (pseudonym), the regional head of a rookie station, revealed that at present, Zhongtong clearly stipulates that if the outlets collect fireworks express in violation of regulations, they will be assessed according to the standard of 5,000 yuan. Under the difficulty of online circulation, it is determined that the fireworks market is a strong offline, strong wholesale, and information asymmetric market.
Based on this, it has almost become the norm in the market to increase the price of fireworks wholesalers to retailers. For example, during the explosion of Gatling on Douyin last year, the shipment price increased from 10 yuan to 30 yuan, and then to 60 yuan. The retail price in the terminal market is even more 100 yuan to 180 yuan. The factory price of the boys' favorite guns is 2 yuan, and the box is sold for 5 yuan to 6 yuan, and the profit of the whole fireworks is as high as 200%-300%.
Behind the high premium, it is actually the result of the combined influence of many factors. At the wholesale end of the fireworks market, Li Ming went on to say that first, fireworks wholesalers can only purchase goods from Liuyang fireworks factory after obtaining the fireworks wholesale certificate issued by the relevant local departments. However, the number of fireworks wholesale licenses in a region is extremely limited, and some counties only approve 3-4. In order to obtain these certificates, wholesalers need to bear customer costs, venue costs, personnel costs, etc., and it is almost difficult to handle them without millions of these certificates.
Second, regardless of whether individuals sell them based on self-consumption or secondary markups, everyone likes to go to places with more types of fireworks to buy, which requires wholesalers to continue to buy. Previously, factories and wholesalers in the fireworks industry have been in a billing period mode, and the payment cycle is extremely long.
However, when Gatling exploded last year, due to the limited production capacity in Liuyang, many wholesalers went directly to the Liuyang factory with cash to grab goods. If the cost of documents is superimposed, without tens of millions or even hundreds of millions of assets, it is almost difficult to touch the fireworks wholesale business, which also means that wholesalers need to bear cash flow costs, bank interest costs and so on.
Third, generally speaking, the hot sales cycle of fireworks is only 20 days before and after the Spring Festival. Basically, after entering the fifth day of the first lunar month, as the returnees return to the city one after another, the fireworks market has gradually returned to desertion. According to the experience of previous years, the annual inventory ratio is about 30%-40%, and these inventories can only be digested by subsequent markets such as weddings and opening ceremonies.
Moreover, fireworks are afraid of both fire and moisture, but at present, fireworks packaging is generally mainly packaged in plastic or cartons, and the entire circulation and storage process will inevitably produce extrusion. Once the deformation of the carton has an impact on the selling appearance, it is difficult to enter the market circulation, which leads to at least 10% of the inventory of 30%-40% of the inventory can not be circulated to the market. For the southern market, this proportion is likely to be higher due to the relatively long rainy season.
In order to hedge these costs, wholesalers will inevitably increase the price of fireworks exponentially during peak demand. After all, the market demand is here, if you don't buy it, someone will buy it, and if you don't buy it, someone will buy it.
Under the strong wholesale model, the fireworks sold in the terminal market are facing serious product homogeneity. Fireworks such as gatling, fairy sticks, and small goldfish can be seen almost everywhere in the market in many regions. The high degree of homogeneity of products, coupled with the high gross profit of fireworks, has also caused a series of problems.
Source: donews
On the one hand, according to the existing policy, individuals who operate and sell fireworks need to obtain a fireworks retail license. Some practitioners revealed that the entire process from approval to obtaining the certificate requires at least hundreds of thousands. Based on this, in the fireworks market in some rural areas, several retailers who have obtained compliance certificates often "huddle together for warmth" and jointly increase the price of fireworks in the area, which is why Li Minghui mentioned above that some consumers will drive for an hour or two to buy fireworks for themselves.
On the other hand, due to the early holiday of many factories this year, the peak of returning to the hometown is earlier than in previous years. Many people who returned home early and local people have sold fireworks in various ways. However, because the small traders did not obtain legal documents, they directly played "guerrilla warfare" with the relevant departments.
At the same time, some small traders have grasped the problem that consumers do not understand fireworks, and they have "sky-high prices" and "watching people cook".
During our visits to many towns and villages in northern Anhui and eastern Henan, we found that some vendors in Gatling asked for 30 to 40 yuan, while in some towns and villages, Gatling asked for 50 to 60 yuan. If you see students and little girls coming to buy, you will directly ask for 70-90 yuan. In other words, the entire fireworks market** is currently extremely chaotic, and consumers may be slaughtered if they are not careful.
In 2023, the consumer market will accelerate into the fourth consumption era, and consumers will pay more and more attention to sex price comparison. The excessive price increase of the operators of all parties to the fireworks and the disorder of the market may be able to temporarily boost the prosperity of the fireworks market during the Spring Festival. However, if it is not regulated for a long time, it will also restrict the further development of the fireworks market.
Not only on the sales side, but also on the fireworks transportation side. Rong Lei, who has been engaged in the freight industry for many years, told us that because fireworks belong to a class of dangerous goods, the policy has strict requirements for fireworks transport vehicles. Common 4m2 6m8 13m6 high guardrail trucks can not be transported, and the transport personnel must obtain a hazardous chemical transportation certificate.
At present, the vehicles transporting fireworks on the market as a whole are modified vans and van semi-trailers, such as these vehicles must be equipped with fire extinguishers, install corresponding sign lights, signs and GPS navigation and communication equipment, snow chains have higher requirements. And each vehicle must be able to be networked and controlled throughout the province and comprehensively monitored by the provincial transportation department.
For freight vehicles illegally transporting fireworks, the Liuyang area stipulates that there are rewards for reporting, which makes the owners of some local fireworks factories also seize the loophole. In some groups of freight drivers, they give high freight rates of 8-10 yuan kilometers, and say that they can take national highways to avoid inspections in some service areas. After some freight drivers were "tricked" into loading by sky-high freight rates, the owner of the fireworks factory reported it directly, which also made some compliant vehicles dare not go to Liuyang easily, for fear of being caught by the other party and fined for reporting loopholes.
The high demand in the market and the lack of compliant vehicles have also increased the cost of fireworks during the Spring Festival, and the freight for 1,000 kilometers can sometimes be reported to 20,000-30,000. Under the relatively fragmented chain, the owner of the fireworks wholesaler will inevitably increase the price of fireworks in order to hedge costs, which is another reason for the high current fireworks market.
Moreover, the strong wholesale model mentioned above also brings another problem, which is the asymmetry of demand between supply and demand. In the case of Gatling, for example, the manufacturing process of Gatling is extremely simple, and this product has been around for more than ten years. However, due to the cold in the domestic market, the products are generally export-oriented. After the explosion of the short ** platform, it opened up sales for Gatling in the domestic market.
However, in addition to the high attention of the market during this year's New Year's Day, although the Spring Festival in 2024 is approaching, the popularity of Gatling has not increased, and there is a lack of a second Gatling in the fireworks market at present. Therefore, how to create more "Gatling" with the help of social **, how to meet the differentiated needs of more consumers, and make fireworks really fun is also another test for the follow-up fireworks factory.
Source: WeChat Index.
Conclusion:
Xu Zhiqiang, deputy director of the Liuyang Municipal Emergency Management Bureau, said in an interview that in recent years, Liuyang City has eliminated nearly half of the fireworks and firecrackers production capacity, and all the enterprises with backward safety management and poor warehouse conditions have withdrawn.
With the gradual improvement of the safety performance of fireworks production in Liuyang and the relaxation of policies in many places, Liuyang fireworks will also burst out with new vitality in the future. Of course, from the production end to the sales end, from the transportation end to the brand end, the market needs to continue to improve. But it is undeniable that this Spring Festival, more people will bid farewell to the old and welcome the new year in the splendid fireworks and enjoy a rare good time.