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China's hardware industry export ratio
China's hardware industry exports make up nearly half of the world’s total. Jiangshan, a key player in China's hardware tool sector, still faces challenges in its development journey. The question is: Can it make a "daring leap" from being an OEM manufacturer to building its own strong brand? This has become a crucial test for the future of the industry.
Imagine you're the owner of a company with top-tier products, whether in materials or craftsmanship—but you don't have your own brand. You can either continue producing under other brands, relying on OEM orders to keep your business running, or invest heavily in building your own brand and compete against established names. What choice would you make?
OEM or autonomy? This tough decision has become a common challenge for Chinese tool hardware companies today.
Throughout the history of China's hardware industry, it has largely been defined by OEM production. Despite fluctuating economic conditions and uneven industry growth, when will China finally have its own globally recognized brand? This question has lingered in the minds of many industry professionals.
Shi Lanlan, executive vice-chairman of the China Hardware Association, has spent over 30 years immersed in this industry. From the early days of reform and opening up to the restructuring of companies after the country's economic shifts, and then the rapid export growth following China's WTO accession, the tool hardware industry has carved out its own path—remarkable, yet still lacking a strong national brand.
According to customs data, China's tool hardware exports have seen double-digit growth for years. In 2012, the total value reached $11.409 billion, up 11.06% year-on-year. By 2013, the import and export volume hit $13.865 billion, with exports reaching $9.337 billion, a rise of 8.38%. China now accounts for about 50% of global tool exports, making it the largest manufacturing base in the world.
Yet, despite this success, Shi Lanlan believes that the industry lacks internationally recognized Chinese brands. Many high-quality tools sold in developed countries are made in China but branded with foreign names. While quality is accepted, brand recognition remains low.
Shi is clear: "At this stage, we must develop our own brands." But building a brand is not easy—especially in the international market. Even domestic branding is a tough challenge.
Bao Jiangang, chairman of Ningbo Jiejie Tools Co., Ltd., once tried to enter the domestic market in 2004. He quickly learned that without control over branding and distribution, and facing untrustworthy dealers, he suffered heavy losses. Since then, he focused on the international market.
He recalls that the main issue was immature marketing channels. Meanwhile, foreign brands entered China smoothly. Why couldn’t Chinese companies do the same? The answer, according to Shi, is simple: "The independent brands are not well-known."
Many Chinese companies trying to enter the mid- to high-end market face the same problem: their products, though of good quality, are labeled with foreign brands and sold at ten times the price. Without brand recognition, they struggle to compete.
Despite these challenges, some companies are pushing forward. Wendeng Power Tools Group, the world’s largest manufacturer of adjustable wrenches, began focusing on the domestic market in 2009. Its self-branded “MAXPOWER†has grown rapidly, with domestic sales reaching over 100 million yuan today.
Another example is Shanghai Ubay Machinery, founded by Yue Erying. She successfully launched her brand "Naught" into the German high-end market and later expanded into China. She refused to lower her brand's positioning, even if it meant losing the U.S. market.
While progress is being made, Chinese users—especially in industrial sectors—still lack trust in domestic brands. As Shi Lanlan points out, more efforts are needed to promote Chinese brands and build confidence among professional users.
The road ahead is long, but the direction is clear: China must move from being the "world factory" to becoming a leader in global branding. Only then can its hardware industry truly shine on the world stage.