Hardware market should develop to high-end brands

The hardware market has been expanding continuously, leading to fiercer competition and the influx of numerous foreign hardware companies into China. This situation has prompted Luo Baihui, Secretary-General of the International Mold and Hardware & Plastic Industry Suppliers Association, to stress the importance of creating strong, internationally recognized brands in China. In such a highly competitive market, companies must focus on developing their own high-end brands rather than solely relying on OEM production. Luo Baihui emphasized that building reputable brands is crucial, as reputation is the cornerstone of long-term success. Over the past three decades, China's hardware industry has evolved significantly, transforming itself into a major player in the global hardware sector. Following its entry into the World Trade Organization (WTO), China has faced increased pressure due to reduced import tariffs, allowing high-quality foreign hardware products to flood the domestic market. Consequently, China's hardware industry must shift its focus from sheer quantity to quality, aiming to establish itself as a global leader in the hardware sector. This transition requires not only improving product technology but also focusing on branding and regionalization strategies. Despite being the world's largest manufacturer of hardware products, China's hardware exports currently account for only 3% of total exports. This highlights a significant gap in both technological depth and brand recognition. Luo Baihui pointed out that the concept of branding extends beyond just the product itself—it encompasses service, innovation, and trustworthiness. A strong brand can command premium pricing and enhance the overall economic contribution. For instance, if China could produce hardware under its own brands instead of relying on OEM models, the potential increase in GDP would be substantial. The involvement of large conglomerates has historically been instrumental in driving industries forward. Companies like Japan's Panasonic and Sony initially focused on unrelated sectors but later expanded into household appliances when they saw potential in the market. Their strategic moves made them global leaders. Similarly, China's hardware industry must leverage similar conglomerate-level initiatives to strengthen its position. With the arrival of numerous international brands following WTO membership, China faces what many refer to as the "wolf entering the house." While this might seem daunting, the real challenge lies in leveraging these opportunities to build stronger domestic brands. To achieve this, the industry must embrace globalization while fostering innovation and marketing strategies tailored to international standards. Currently, Chinese hardware products rarely feature prominently on the global stage. For example, while Zhejiang Yongkang enjoys a solid reputation domestically, it remains largely unknown internationally, limiting its growth potential. Looking ahead, experts believe that sustained effort will eventually lead to the emergence of more globally recognized Chinese hardware brands. Compared to countries like Germany, South Korea, and the U.S., China's hardware products still lag behind in terms of design sophistication, reliability, and market positioning. The current competitive edge largely relies on low-cost production, which results in minimal added value—a phase reminiscent of Japan and South Korea during the 1960s and 1970s. However, relying on low-cost production or OEM services is not sustainable. The industry must evolve by upgrading its capabilities to meet evolving consumer demands. In recent years, many developed nations have outsourced hardware production to China, underscoring the country's manufacturing prowess. What remains lacking, however, is a widespread recognition of Chinese brands globally. As the hardware market serves as both a reflection of industry trends and a platform for innovation, Luo Baihui insists on adopting an international outlook. By participating in global trade shows like the one held in Las Vegas earlier this year, Chinese hardware companies are beginning to explore overseas markets. Annually, Tianjin's hardware industry handles billions of dollars worth of imports and exports, primarily targeting Southeast Asia, Northeast Asia, the Middle East, and Africa. Leveraging Tianjin's strategic port location, China's northern hardware hub aims to foster medium-to-high-end brands, nurturing national champions within the industry. Ultimately, it aspires to become a modern, professional, and globally recognized logistics center for hardware products.