Most of our factories possess one particular skill: rather than focusing on perfecting their products, they specialize in driving down prices. This phenomenon is prevalent across many industries. They become complacent over minor gains, and before they realize it, they have orchestrated their own downfall.
When prices are driven into the ground and the market is ruined, it is indeed possible to restore it to its original state. However, the recovery process will be protracted and may even require the sacrifice of numerous players in the industry. In some cases, an entire product category may vanish altogether. The revitalization of the market does not come from those who recklessly follow the crowd like moths to a flame, but from those who go against the tide—those who steadfastly adhere to their commitment to quality and price positioning.
Appropriately lowering prices can benefit industrialization and economies of scale. However, excessively low and indiscriminate pricing, especially when achieved by any means necessary, can strangle an industry. This is a truth that has been proven time and again.
Take a walk through the market today, and you will find severe oversupply of similar products, with each company undercutting the other on price. Whenever a product proves profitable, everyone rushes to produce it. Whenever a particular style sells well, everyone copies it. For the same product, prices can range from 10 yuan to 2 yuan, with no discernible difference in packaging! Customers see only the surface—they perceive little difference between the products. In reality, the differences are vast, but they lie hidden beneath the surface. Unaware of this, customers opt for the cheapest option. As bad money drives out good, even high-quality products are forced to lower their prices to survive.
Thus, we are truly in an era of self-destruction! To ensure their own survival, companies refuse to let others survive. The result? No one survives.
Can a market, once ruined by price cuts, be restored? There is an 80% chance it cannot. It is like expecting grain to remain uncontaminated from polluted soil—a mere pipe dream!
Once the land is polluted, it must be left fallow for years. Wild grass must be allowed to grow rampant, cleansing the soil of all pollutants and restoring its original purity. Only then can crops be planted again. However, during these barren years, many will be unable to endure—they will either starve or be forced to migrate. This is why niche categories, though initially vibrant and profitable for many, often lead to the demise of most businesses in the long run.
The industry must regain commercial rationality and rid itself of desperate, reckless behavior.
Price is a double-edged sword—it can harm others, but it can also harm oneself. Irrational price wars often amount to mutual destruction. The day an industry reaches a point where no one can profit is the day it approaches its demise.
We deeply admire those companies that steadfastly maintain their positioning—whether in branding, quality, or pricing. They are the backbone of the industry, its future, and its hope. These are the enterprises worthy of respect.
Truly respectable enterprises are not necessarily the fastest-growing or the largest in scale. Rather, they are the ones that consistently create commercial and social value and remain unwavering in their principles. Their existence is a blessing to the industry, to society, and to themselves.
Therefore, upholding product value, commercial value, and existential value is a critical bottom line for businesses.
If too many companies in an industry produce low-quality garbage, then the demise of such enterprises is nothing to lament. Why would we need so many garbage-producing businesses? If numerous companies in a product category churn out worthless products, their extinction is not worthy of sympathy. Why would we need so many garbage-producing businesses?
We must not allow an industry to be destroyed by garbage.
Over the past 30 years, China’s economic conditions were poor, and consumers’ purchasing power was weak. There was a need for large quantities of low-end, even substandard products to meet market demands. At that time, the prevalence of low-quality industries was understandable. However, today, with improved consumer purchasing power and discernment, producing excessive garbage products is not only a waste of resources but also a challenge to consumers’ tolerance. It is an irresponsible act toward the industry and its own future!
