China's domestic hardware companies, the road is "big fish eat fish"?

Nowadays, China's hardware companies generally have such a phenomenon. After the financial crisis, many enterprises have turned their products into foreign trade. The domestic sales channels of leading hardware companies such as Hongbao Hardware and SuperStar Technology have become wider and wider, with frequent successes. Most small businesses rely on low prices to seize the market, profits are becoming thinner and thinner, and domestic sales have been narrower and narrower.

Between this “wide” and “narrow,” we cannot help but wonder if the well-made export-oriented small and medium sized hardware companies would have to face difficulties in domestic sales. Is the domestic hardware market discriminating against small and medium-sized enterprises? "Fish" is the destiny of domestic hardware companies?

Below, please take a look with me to see the status of domestic sales of hardware companies.

Hardware leading domestic sales situation is very good

Hongbao Hardware Turns Into Profit

In the first half of 2010, Hongbao Hardware's orders returned to normal, and new forgings products were sold in bulk. The original hardware tools that had been relying on export sales were gradually entering the domestic market. The newly developed household life series of hardware products achieved domestic sales, and the gross profit of products increased significantly. In order to achieve a turnaround in the reporting period.

According to the 2010 semi-annual report, Hongbao Hardware made a net profit of 10.1 million from January to July. The net loss for the same period last year was RMB 6,916,500.

Superstar Technology actively expands the domestic market

Superstar Technology expands the domestic market in three ways, all of which are related to channels.

The first is a boutique, built in the business district of the city center. The target audience is tool enthusiasts and travel enthusiasts. In addition, it is a distributor agency that sells through multiple agents. Currently, four large regions have been established with sales expected to be 4-5. 100 million yuan.

Hardware SME profit thin: "say good or bad"

Taking Shuikou Town of Kaiping as an example, the number of local sanitary hardware plumbing companies is about 600. The company mainly produces taps, showers, bathroom accessories, and accessories, among which the output of the taps is the highest. Industry sources pointed out that this is due to the fact that there are many styles of faucets and the appearance changes are abundant, while the style of showers and Other accessories is less changed, so the output of faucets is larger.

Kaiping Sanitary Ware Enterprise has begun its transformation in the past few years, and many of the original outlet enterprises that specialize in exporting have slowly begun to set foot in the domestic market. Currently, Kaiping Shuikou's hardware and sanitary products account for more than 40% of the domestic market share. Due to the lower prices of plumbing products produced in other domestic production areas, Kaiping's current products also need to reduce their own prices and products in these production areas. competition. According to industry sources, in order to gain greater market share, some Kaiping companies are now starting to take some low-quality products at a low price to seize market share, resulting in current Kaiping products in the domestic market is not in a clear advantage.

Hardware companies do domestic sales: There should be a zero-to-do attitude

The challenges faced by export-to-domestic companies are not small. Transferring domestic sales is not just a simple matter of getting goods to domestic sales, but re-expanding a whole new market. Brand building and channel construction all need to start from scratch. Foreign trade companies have many disadvantages when they switch to the domestic market. That is: no product, no brand, no channel, no team, no experience. Many foreign trade companies acknowledged that they were tired when doing a domestic market transition. For example, they had to send more staff to do brands and channels.

In the creation of brand or product innovation, hardware leader is indeed more advantageous, but the scale does not determine everything. Take “Bull Socket” as an example. In the first few years, many outlet companies in Cixi sold more or more than “Bulls”. But later, "Bulls" established its own distribution, wholesale channels, and continued refinement. Among the more than 3,000 counties in the country, half of them have achieved full coverage of the county, town and village channels, and finally achieved sales first in the country. The experience of bull sockets tells us that the phased characteristics of domestic sales are obviously stronger than exports. Once it reaches a stage, the speed of promotion will greatly exceed exports.

comment:

Hardware companies doing domestic sales, should give up the mentality of quick success, stability, hard work. The fundamental reason for the success or failure of the domestic sales road is not whether the company is big or small, but whether it is a bitter aftertaste and a sense of building brands and channels from scratch. Although hardware leading companies have certain advantages in terms of brands and so on, this advantage does not necessarily translate into profits. On the contrary, leading hardware companies actively explore market behavior and the detours they have adopted, all of which have provided very much to the emerging SMEs. Good example.