How to grasp the opportunity of hardware enterprises under fierce market competition

**Abstract** With the continuous integration of modern scientific and technological advancements into industrial practices, competition in the hardware industry has become more intense than ever. Whether you're aiming to establish a presence in any segment of this sector, it's essential to have a deep understanding of market trends and dynamics. Hardware tools encompass a wide range of products, including manual, electric, and pneumatic tools, cutting instruments, auto maintenance equipment, agricultural machinery, lifting devices, measuring instruments, tooling systems, jigs, molds, grinding wheels, drill bits, polishing machines, accessories, and more. Most domestic manual tool manufacturers operate primarily at the low-end or rely on OEM production, while high-end and branded products remain largely controlled by European and American companies. Additionally, with profit margins narrowing, the room for price reductions is shrinking. Competing solely on cost is no longer sufficient for companies to build sustainable core competencies, so new strategies and development paths must be explored. The hardware industry plays a crucial role in China’s light industry and is considered a rising sector filled with both opportunities and challenges. According to surveys, over 99% of enterprises in this industry are small and medium-sized private businesses, mainly concentrated in provinces such as Guangdong, Zhejiang, Jiangsu, Shanghai, Fujian, Shandong, and Hebei. China currently ranks first in the global output of many hardware products, including lighters, zippers, thermos cups, wrenches, pliers, knives, and scissors. These products hold significant shares in the international market, and China’s influence in the global hardware industry continues to grow. Hardware products from China can now be found in over 220 countries and regions worldwide, solidifying its status as a major hardware producer. According to data from Luo Baihui, the total output value of the hardware industry reached 800 billion yuan, with a growth rate exceeding 15% in 2005 and 2008. In 2008, exports amounted to $50.3 billion, representing 40% of total output. Except for a 7% increase in 2007, the industry had maintained a high growth rate of 20%-30% previously. However, the global financial crisis that struck in the fourth quarter of 2008 had a severe impact on export-oriented enterprises. Orders vanished overnight, and some signed contracts were even canceled or returned under various excuses. Industries like power tools, construction hardware, locks, cutlery, and zippers were hit hardest. Many export companies, relying heavily on OEM models without their own brands or distribution channels, exposed their vulnerabilities during this period. According to customs statistics from 2010, the total export value of national hardware products in the first half of the year reached $26.396 billion, an increase of 33.2% year-on-year. Imports totaled $7.984 billion, up 25.1% compared to the previous year. Production data from the National Bureau of Statistics showed significant growth: lock output increased by 17.5%, household gas cookers by 5.8%, domestic gas water heaters by 63.6%, range hoods by 34.7%, and daily-use stainless steel products by 51.4%. Power tools are among the most widely used hardware tools in society. As technology advances, the power tool market is expanding rapidly. However, due to quality issues, incidents of consumer harm caused by various types of power tools continue to occur. This has led to stricter demands in the domestic market. The European Union has introduced the 60745-1 standard specifically for hardware and electric tools, aiming to set safety regulations and ensure that only compliant products enter the European market. An electrical certification law has also been implemented. All power tool products exported to the EU must be certified and marked according to the EU Electrical Directive before being shipped. Products nearing expiration require timely certification applications. Companies must prepare in advance during inspection periods, accumulate experience, and adjust product designs accordingly based on EU regulations. Otherwise, they risk being excluded from the market. In the face of increasingly fierce competition, if domestic companies fail to pay attention to these changes, it could significantly hinder their long-term growth. Providing excellent after-sales service is also a top priority. Most power tools sold globally are produced and exported from China, making it the world’s leading supplier. While the power tool industry continues to develop, several challenges have become more apparent. Notably, the reform of research and development systems is progressing slowly, and the gap with foreign competitors remains significant. Exported products often have low foreign exchange earnings, poor performance, low selling prices, and limited company scale. Low concentration and rising raw material costs further restrict the industry’s growth. To overcome these challenges, power tool companies must seize new development opportunities, enhance technological innovation, actively pursue product certifications, accelerate enterprise technological upgrades, improve supporting measures, attract foreign investment, and promote corporate restructuring. Only through these efforts can they succeed in the evolving market landscape.

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