Analysis of Challenges in Development of Zhejiang Hardware Fastener Industry

Zhejiang Province is a province with a relatively early development of the fastener industry and a relatively good foundation. It has a number of well-known national professional hardware markets. In recent years, Zhejiang's fastener industry's advantages of "changing market speed" and "using capital for capital" have weakened. Only the ability to create price differences has been lacking, and the ability to create product differences has been lacking. This situation determines the "manufacturing" property of the fastener industry, rather than the "created" property. The “big but not strong” production methods lacking core competitiveness have been difficult to sustain under increasingly fierce market competition. The fastener industry has entered a bottleneck period of development and faces new challenges.

Domestic and Foreign Market Challenges The domestic consumer market has been shrinking. Real estate is the biggest driving force for domestic demand after 1998. As long as people buy a new house, Chinese people will certainly buy new TV sets, refrigerators, furniture, etc. Naturally, the demand for domestic fasteners will be increasingly strong. . However, since the December 12, 2009 State Council promulgated the "State of the four", the government's regulation of the real estate market has not relaxed. According to the latest statistics from the Provincial Bureau of Statistics, in the first three quarters of this year, the sales of Zhejiang commercial housing fell from a 4.2% increase in the first half to a 5.9% drop. The downturn in the real estate market has actually caused a shrinkage in the domestic demand market, leading to a significant reduction in the demand for hardware fastener products in the domestic market.

The demand for foreign trade markets is also decreasing. Until today, the haze of the financial crisis has not yet dispersed. In the short-term, the recovery of the European and American markets is unlikely, and the financial crisis in Europe, Spain, Italy and other countries continues to spread this year, making these countries economic downturn and sharp decline in consumer demand. The European and American markets are the major exporters of fastener products in Zhejiang. Jiaxing Haiyan, the main fastener production base in China, has seen many orders drop by nearly 40%. This has not only caused the reduction of external demand, but also caused fewer orders due to increased export risk, rising costs, insufficient liquidity, and other reasons.

The outlets that can be tried should be quickly transferred from the outside to the inside. After the third quarter of 2008, well-developed provinces and regions are relatively balanced both inside and outside the market, and those with greater pressure are provinces with higher extroversion dependencies. Therefore, in the coming golden decade, the fastener industry in our province needs to be transferred to the inside. This process is even more critical than the industrial upgrading. We originally worked hard, exploited labor, and created the best products sold to Americans. Now is it possible to sell the best products to the Chinese people? It is worth thinking about.

Join traditional industries such as fasteners with the new economy, new technologies and the Internet. In 2010, China’s e-commerce transactions amounted to about 3 trillion yuan, while China’s total retail sales of consumer goods for a year totaled about 18 trillion yuan, showing that 1/6 of the transactions were realized through e-commerce. Now even flowers, lunches and other highly effective products can be traded online. Therefore, for fastener companies in Zhejiang, the time when a company built an industrial park has passed, and a new era has come. In the future, a large number of hardware fastener manufacturers in Zhejiang Province will embark on the “e-commerce + professional company + small manufacturing” model, which is also the general trend.

The innate geography conditions of “seven mountains, two waters and one field” in Zhejiang Province determine that the fastener industry in Zhejiang is difficult to produce one of the world’s top 500 companies in the near future. By the end of last year, the base scale of the world’s top 500 was 100 billion yuan, and the largest scale fastener manufacturer in China, Jiashan, Zhejiang Province, had a base scale of 400 million yuan, and it was one thousand Billion is still far away. When it comes to a company with a scale of 100 billion, the threshold for the 500 may be 200 billion. Therefore, it is critical to identify the positioning. We do not blindly train the world's top 500, but instead we focus on cultivating a number of invisible champions. These stealth champions occupy the top of the domestic market share, but do not have to let the world know. For Zhejiang fasteners, supporting and cultivating a thousand invisible champions is more important, more realistic, and more valuable than cultivating a world top 500 player.