I have to admit that industry involvement is not uncommon in real life. Industry involution means that under certain economic and social conditions, fierce competition in a certain field, insufficient market demand and other factors, enterprises in the industry compete with each other, engage in vicious competition, seize each other's market share, and even engage in price wars, The chaos of the subsidy war has led to excessive concentration of industry resources, broken industrial chains, and intensified corporate risks, ultimately forming an unsustainable industry cycle.

Industry involution is the result of a variety of factors, such as excessive monopoly of market share by industry leaders and insufficient market demand. Especially in the era of digital economy, the rise of emerging companies is accelerating, the evolution of the industry is accelerating, and the possibility of industry involution is gradually increasing.

Reasons for the existence of industry involution

1. Market limitations. The only source of market demand within the industry is the enterprises within the industry, and the lack of a broader market space has led to intensified competition among enterprises.

It’s like there was only one large supermarket in our community before. Its operation was relatively smooth and profitable. However, in just one year, three new supermarkets appeared in the community at the same time. The supermarkets in the community cannot support the normal operations, including profits, of the three supermarkets within the fixed population of the community. Then there will be involution and a price war. Your price is low, I am cheaper than you, your service is good, I can deliver to your door. But there is no innovation and change, just endless digging in the original business, the final result can only be to suppress the opponent with price, see Whoever can hold on longer will be the first to fail.

2. Lack of policies and regulations. At present, for most domestic industries, policies and regulations are not mature, and the cultivated industries do not even have a healthy competitive environment and fair market mechanism, so it is easy to form industry involution.

For example: the cleaning appliance industry, which is currently in a rapid development stage, especially emerging categories such as floor washing machines and cloth cleaning machines, faces many difficulties in management and supervision due to the lack of relevant policies, regulations and standards.

For example, in 2020, Vanke Enterprise Co., Ltd. filed a complaint against Changsha Wansen Decoration Materials Co., Ltd., which has the exclusive rights to the "Vanke Flooring trademark", to court on the grounds of trademark infringement and unfair competition. The Changsha Intermediate People's Court ordered the defendant Wansen Decoration to immediately stop the trademark infringement, stop the unfair competition involved in the case, publish it in the newspaper to eliminate the negative impact, and compensate for the economic loss of 500,000 yuan.

In recent years, as the company has With the increasing improvement of patent construction and the increasing public awareness of intellectual property protection, patent disputes in many industries have become more frequent. Especially when an industry is undergoing rapid expansion, intellectual property issues are more prominent. Therefore, policies and regulations have become more prominent. Improvement is the best way to make the industry more standardized and avoid involution.

3. The industry advantages are not significant enough. Some industries lack core technologies and outstanding advantages, and the result of fierce competition among enterprises in the market is price. Vicious competition represented by war and subsidy war

To give a simple example, the supermarket downstairs may not know how to innovate and change, but only competes with peers on price. Without any significant differences, he can find his own disadvantages and change them. He can just use simple prices to attract consumers. He can highlight his own characteristics, weaken the price difference, and make his business more efficient from another angle. Smooth, such as more humanized services, adding more business projects to facilitate surrounding consumers, such as door-to-door delivery, and providing some additional services for free, such as receiving express delivery, phone recharge, and more communication with consumers More interactions.

4. The shrinking of consumer purchasing power. For mature industries, consumer purchasing power will gradually experience bottlenecks, which will also contribute to industry involution. < /p>

How to crack down on industry involution?

1. Improve industry regulations. Government departments should improve relevant industry regulations, clarify industry regulations, raise industry thresholds, guide companies in the industry to operate in accordance with the law, and curb the industry. The development trend of involution.

2. Strengthen the industry ecology. The government should guide high-quality enterprises to enter the industry through policies, promote the intelligent and clustered development of macro-decision-making, and help enterprises build a healthy and orderly ecosystem. < /p>

3.?Technological innovation.

Enterprises should continue to improve their innovation results and technological levels, build personalized products and services through advanced technical means and models, enhance core competitiveness, and reverse the trend of industry involution.

4. Protect the rights and interests of consumers. A sound consumer protection mechanism should be established and improved to guide enterprises in the industry to provide relevant products and services that meet consumer needs in accordance with market rules and ethical principles to meet growing consumer demand.

In short, it is difficult to avoid industry involution now, but we can make appropriate changes and find new innovations to change the status quo of internal inspections. We can improve industry standards, strengthen industry ecology, and technology A series of countermeasures including innovation and protection of consumer rights will be implemented to prevent and mitigate industry involution. Only in fair market competition can enterprises continuously improve their own strength, further grow and continuously promote the healthy development of the industry.