Analysis: The gap between Chinese hardware and international hardware brands

With the end of China's "Eleventh Five-Year Plan" in 2010, the Chinese economy has continued to develop at a rapid rate and it has become the world's second-largest economy. The rise of China’s economic status has created a good China’s hardware industry market environment. China's hardware industry is playing an increasingly important role on the world stage. China's hardware industry is making great strides from "made in China" to "created in China" and has changed from "extensive" to "intensive". This change has ushered in a new era in China's hardware industry: the brand era. At the same time, however, there is still a big gap between our hardware companies and international hardware brands.

1. The technology design capacity and level of the multinational hardware companies and processing methods are higher than the hardware companies in China. Global hardware companies have advanced design reserves, and Chinese hardware companies lack both capital and technology. Most of the domestic hardware companies are mainly low-end products or OEM OEMs. High-end products and brand products are still controlled by international brands. Because the profit margins of Hand Tools are all being compressed, the space for price cuts is decreasing. It is difficult for enterprises to establish core competitiveness by price competition alone.

At present, China's hardware companies are mostly positioned in the middle-grade and high-grade products. This is because at home, the low-end products have no sales at all. From this perspective, it is entirely a matter of market competition that the companies go up the middle-end line. Regardless of the appearance or interior, in terms of the degree of exquisiteness, there is still a considerable gap between domestic hardware products and international hardware brands. For example, Häfele from Germany has the longest product line in the world and also has a large amount of products. A total of more than 100,000 products are recorded in Häfele's product manuals and stored in warehouses. Häfele is also one of the few companies in the world that offers both furniture hardware and architectural hardware, as well as retail channels for end consumers. The development of domestic enterprises in this area has been stagnant.

2. Although the brand of domestic hardware companies has made great progress in recent years, from the perspective of the characteristics of the company's distribution, there are still the characteristics of "South Industry, North Distribution". The industrial bases mainly in Shanghai, Zhejiang, Guangdong, Jiangsu, and Fujian provinces, and the north-based distribution bases have formed the pattern of production and sales of domestic hardware companies. The influx of international hardware brands will undoubtedly have a huge impact on the domestic market. Foreign hardware companies that have entered China are internationally renowned multinational companies. They have good reputation and can provide users with quality products and perfect services. For example, the Häfele Group is now the world’s largest supplier of furniture hardware and architectural hardware. The German Häfele Group entered China in early 1996. After years of development, Häfele (China) has become the preferred supplier of furniture hardware and architectural hardware for the domestic furniture and kitchen, home improvement companies and real estate developers.

The domestic hardware companies have appeared in large numbers, and in the past few years, there is still a gap between them and the veteran multinational hardware giants that have existed for hundreds of years or decades.

At present, the main competitiveness of hardware tools in the domestic market is still low prices. With the continuous improvement of the degree of internationalization of joint-venture brand enterprises and the further expansion of the scale of production, the cost will inevitably fall sharply. The advantages of low-price products for self-owned brands will become less apparent, and they will face even greater challenges. As the world's largest hardware provider, Häfele apart from the product itself, if the customer has special needs, also provide solutions for customers to help them solve the problem. In addition, Häfele also provides training for customers and teaches them how to install and use our products better. When new products are launched, Häfele will invite some customers to experience the company and make them the first people to understand Häfele products. At the same time, Häfele will also participate in some exhibitions to introduce products to more customers and design. division. In the end, Häfele's after-sales service will help them solve all possible problems and use a very perfect service to win customers.

With the brand effect, stylish appearance and high-tech content, Häfele's safe, environmentally-friendly and energy-saving economical hardware tools will bring tremendous pressure to domestic hardware companies.

3. Capital and Scale Currently, it is difficult for China's hardware manufacturers to get financing. Even if they can get financing, the scale is very limited. Some even have to operate in debt, want to be close to the market, lack the ability to transform, and the products are all on the same level. Therefore, the development of enterprises is difficult, often forced by helplessness and caught in a price war. This is not the same as the international competitiveness of hardware brands such as Häfele.

4. Internationalization of China and Internationalization of China The demand for the Chinese market itself is growing. Many foreign companies come to China to produce. What they value more is the Chinese market. Most of the Chinese hardware makers are based on the domestic market. However, the domestic market is undergoing changes. The traditional big commercial trade unions, trade associations, Hualian systems and cross-border power systems are all economic associations, waste of resources, and high marketing costs. China's hardware exports account for only a few percent of the total amount. Expanding overseas markets is just the beginning. It is necessary to go global and lack the talents and trade experience of transnational elites. Similarly, after foreign companies enter China, they often have to adapt to the requirements of Chinese consumers, and often have to provide something new in order to be as effective as the huge market in China. Häfele is a representative among them, and goes hand in hand with both the internationalization of China and the internationalization of China. Häfele pays attention to the development trend of the Chinese market, rather than simply introducing it from abroad. At the same time, China has been continuously developing and some things are gradually changing. Therefore, Häfele’s internationalization in China has also enabled the internationalization of China.

5. Management Mechanisms Multinational corporations have established a modern corporate system with clear property rights and operations. Even if our traditional hardware manufacturing enterprises are listed, there may be a strange circle, that is, enterprises operating in a standardized manner also retain traces and imprints under traditional management mechanisms, because they are all born out of traditional mechanisms. . Such mechanisms and traces restrict the exertion of competitiveness. As a family business, Häfele was established 86 years ago as a family business and values ​​long-term development goals. For Häfele, it is very important to establish long-term and stable relationships with customers. Similarly, Häfele has many such customers. At the same time, due to its long history, Häfele products contain many complex and delicate processes, and the product R&D team is very strong. The Häfele brand has been successful for a long time. There are two major reasons. One is that Häfele is committed to developing long-term and stable cooperation with customers. In addition, Häfele’s product quality and quality are very stable.

With the fierce competition in the domestic hardware market, the competitors of China's hardware companies will not only be their domestic counterparts, but also the giants of international hardware brands. At the same time, however, we should also see that the internationalization of international brands still has a long way to go. The Chinese market is huge and there will be differences in consumer demand. Differences between China and foreign countries are the issues that Hufflough has to face in entering the Chinese market.