Comparison of the status quo and sales model of global music retail industry

As the saying goes, “Music is the common language of human beings”, it can cross regional and cultural differences, and the music sales model has also been found to have the same cross-cultural cross-regional characteristics.

In the report below, we counted and ranked sales of 324 music retailers from 44 countries on five continents. Overall, after the exclusion of US companies, the remaining company’s sales revenue in 2017 was 5.7 billion US dollars, accounting for about 60% of global music product revenue. The report shows the political, cultural and economic development of 44 countries and regions. The huge difference between the different companies is even more obvious. For example, the Musikhaus Thomann Group in Germany has an annual sales income of 954 million US dollars, while other retailers have a profit of more than 1 million US dollars. The ranking also includes pure Internet sellers like Bajaao Music in India and physical retailers like Pianos Daude, which sells pianos.

However, despite the differences between geographies, cultures, and corporate cultures, we have found that many retailers have adopted almost identical merchandising, marketing, and promotional strategies. We believe that the similarities in the personal experience of the founders of these music companies are one of the important reasons for this coincidence. Whether in Southeast Asia, Africa, or in the Nordic countries, most of these musical instrument retailers are created by musicians. Whether they are pursuing higher financial freedom, or because they insist on the career of musicians, or in order to better serve the local market, the start-ups of these companies have experienced the process of growing up from small to large. Few music retail companies rely on private equity investment or venture capital to grow rapidly. Most of them have experienced a long accumulation and precipitation.

The world’s top 30 musical instrument retailers

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Due to the obvious cyclicality and professionalism of the instrument industry, the capital market is not very active in investing in the musical instrument industry. For example, in Australia, private equity investors have had to declare a bankruptcy investment loss after taking over and operating Billy Hyde Music for several years; similarly, Bain Capital’s purchase of the Guitar Center in 2007 was not satisfactory, although the result Not as bad as Billy Hyde Music, but it also caused a certain book loss.

Obviously, having a musician or former musician as a corporate manager is very important for the musical instrument retailer. The slogan of the companies on the list is full of passion and passion for music, such as “we Living and breathing in music confirms the corporate culture of musicians as managers. Even if the company is passed down to the second or third generation, we can still see the affinity of the musicians in the corporate culture. In the musical instrument industry, there is also a popular corporate slogan “Our price is very tempting”, which reflects the global music product consumers are very concerned about the price of the product.

How do you get customers into the store and sell products to them? Traversing across continents, the sales model for music retail is almost the same. Service product spree bundled with in-store classroom, teacher guidance or preferential purchase package is often the most promotional. In China or some other Asian countries, retailers tend to place more emphasis on the promotional value of in-store courses due to the lack of infrastructure related to music education. After comparison, we found that in addition to language differences, the music retailers around the world have almost no difference in the promotion model. They are bundled with some musical instruments, performance techniques or services directed by famous artists.

With the advancement of communication technology and the development of logistics networks, more and more people have access to music products from all over the world, such as violins from China, wind instruments from France, guitars from the United States, electronics from Indonesia, and from Japanese piano. This kind of information and logistics convenience, so that the company is no longer subject to geographical limitations, especially in the field of high-end guitar, wind instrument, piano, electronic equipment or audio equipment, the rise of multinational companies today; now in the world, everywhere You can see the well-known brands – Fender, Gibson, Steinway, Shure, JBL, Yamaha and Roland. However, in the entry-level product field, the musical instrument brands in various countries have become more diverse, and various small retailers have gathered in this field.

Including the display of musical instrument products, whether online or offline, retailers from all over the world are similar. The quality level of the best-selling products can well reflect the prosperity of the local instrument market, but in general there is not much difference in the way stores are arranged in different countries. If you don’t look carefully, we can hardly distinguish the wall layout of each country’s guitar. Whether a piano display or sound room is Singapore or Spain.

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The above musical instrument retailer statistics table contains a large number of online retailers (main sales revenue from online sales). The EU chain’s Musikhaus Thomann is one of the most prominent examples, while the UK’s Gear 4 Music, France’s Woodbrass and Japan’s Soundhouse all have similar online sales channels. Each retailer on the list has its own corporate website, and most of the websites offer product sales. With the popularity of social media, these retailers also run their own Facebook accounts or Twitter accounts, and sales thinking changes from time to time.

In order to make the sales data of companies from different countries and regions comparable, we will convert the sales data into US dollars according to the local exchange rate on December 31, 2017. This ranking is also not the final ranking of global sales data, it is still a work in progress. Since we started this project five years ago, the sales of music sellers around the world have been explored one by one, and this ranking list is gradually expanding. Given the size of the global market and the complexity of the content, this work will certainly last for a while, and then all major retailers will be identified.

Regarding the source of sales data of related companies, we mainly have the following channels. In most major European countries, such as France, Germany, Italy, Northern Europe and the United Kingdom, their corporate finances can be retrieved at the National Registry. Japan also has a similar disclosure system for corporate financial status. The public report of Japanese companies is suspicious to provide most of the data needed in this project. Other sales figures are based on data from the Corporate Bulletin, estimates from distributors and suppliers, and global trade data compiled by the World Trade Organization. Since Chinese music companies do not have the habit of regularly publicizing their financial status, Chinese retailers (due to lack of data) have a limited number of rankings on our list.

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Post time: Sep-27-2018