"OEM OEM" makes the hardware market worry
In the first half of 2010, China's hardware industry continued to show strong growth. According to customs data, total exports of hardware products reached $26.396 billion, a year-on-year increase of 33.2%, while imports amounted to $7.984 billion, up 25.1% compared to the previous year. The National Bureau of Statistics also reported significant increases in the output of key hardware products. Locks produced during this period totaled 850 million units, reflecting a 17.5% rise. Domestic gas stoves saw output reach 12.588 million units, up 5.8%, and gas water heaters increased by 63.6% to 6.868 million units. Household range hoods rose to 8.305 million units, with a 34.7% growth, while daily stainless steel production hit 1.105 million tons, an impressive 51.4% increase.
As technological advancements continue to reshape the industry, competition has become more intense. Hardware tools span a wide range—from manual and electric tools to cutting equipment, automotive maintenance tools, agricultural instruments, and measuring devices. Most domestic manufacturers focus on low-end or OEM (Original Equipment Manufacturer) products, while high-end and branded items remain dominated by European and American companies. With shrinking profit margins, price competition is no longer sustainable, pushing firms to explore new strategies for long-term success.
The hardware sector plays a crucial role in China’s light industry and is deeply connected to everyday life. Over 99% of enterprises are small-to-medium private businesses, concentrated mainly in provinces like Guangdong, Zhejiang, Jiangsu, and Shandong. China now leads in global production of various hardware goods, including lighters, zippers, knives, scissors, and more. Chinese hardware products are present in over 220 countries and regions, solidifying the nation's position as a major player in the global market.
Despite this success, the 2008 financial crisis severely impacted export-oriented companies. Many faced sudden order cancellations and payment issues, particularly in sectors like locks, Power Tools, and construction hardware. As one observer noted, this crisis exposed weaknesses in China's reliance on OEM models without strong brand presence or distribution networks.
Power tools, which are among the most widely used in society, have seen rapid market expansion. However, quality issues have led to stricter regulations worldwide. The EU introduced the 60745-1 standard and the Electrical Appliance Certification Act, requiring all power tool products exported to Europe to meet strict safety and technical specifications. Companies must ensure their products are certified before export and stay updated with evolving regulations to avoid market exclusion.
With global competition intensifying, Chinese manufacturers must prioritize innovation, quality, and service. While China remains the world's leading supplier of power tools, challenges such as slow R&D progress, low product performance, and rising raw material costs continue to hinder growth. To thrive, companies should invest in technological upgrades, enhance certifications, and improve supporting systems to strengthen their competitive edge in the international market. Only through continuous improvement can they sustain long-term success.
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