The scale of China's hardware bearing industry is rapidly growing at an average annual double-digit growth rate. However, in this era where brands compete in the industry to survive, are many enterprises in China's bearing industry also prepared to welcome the arrival of the "brand era"?
What is a brand? Making good products can give you value for money, while making a good brand can give you value for money!
This is a "brand era". If we were laying the foundation for product quality in the first decade, then in the future, we should build a brand based on our products. Otherwise, companies will have no competitive advantage and their profit margins will not be comparable to others. You should know that the average profit margin of China's bearing industry is only around 5%.
Looking back at the development history of China's bearing industry, during the 15th and 11th Five Year Plans, there has been significant technological progress throughout the industry. In addition, the Bearing Industry Association has conducted a technical breakthrough throughout the industry, which has greatly improved the product's lifespan, reliability, noise, materials, and other technologies. Especially for small and micro bearings, the quality of small and micro bearings produced in the Jiangsu and Zhejiang regions is on par with that of Japan's products. However, later on, due to increasingly fierce competition among enterprises, some were unwilling to share their specialized technologies with their peers, resulting in slower progress. In 2012, the sluggish construction machinery market had a significant impact on bearings. From January to December, the sales revenue of China's bearing industry decreased by 6%, and profits decreased by 25%. But the economic crisis is also an opportunity, and many companies have been abandoning low-end products and starting the research and development of medium and large bearings since 2009.
For example, Renben, whose products have been exported to Japan and the United States, saw a 19.96% increase in sales in November 2012; For example, with the upgrading of the national brand of sedans, the hub bearings of the new Torch have gradually upgraded, and its sales have increased from 520 million in 2009 to 860 million in 2011. From January to November 2012, sales increased by 14.56%; In addition to supporting future development through technological innovation and equipment transformation, some enterprises also integrate services into production. Zhongshan Yingke is a typical example. Although the scale of the enterprise is not large, they not only sell bearings, but also provide customers with solutions and shift towards service-oriented.
The service-oriented manufacturing industry will become a trend. According to China's bearing industry plan, by the end of the 12th Five Year Plan, revenue from services will account for about 25% of the main business revenue. From product development to providing equipment and sales services, this is a big chain. However, currently, bearing enterprises place more emphasis on processing and manufacturing, lacking the awareness of "branding".
This is also where our association needs to work hard: to promote powerful large enterprises to provide services, establish brands, and compete with giants in the international market. It should be noted that currently, the eight major multinational corporations have established 43 bearing factories in China. These factories used to produce high-end bearings, but now they are gradually extending to the mid-range, taking advantage of China's lower labor costs and existing brand advantages to form a direct collision with domestic bearing enterprises. However, there are over 1400 bearing enterprises in our country, but none of them have a well-known international brand. When competing with large multinational corporations, they have a competitive disadvantage in terms of brand and relatively lower profit margins.
However, after years of development, some bearing enterprises in China have initially acquired the ability to build international brands. They all have a strong product foundation and strong support for brand building, and one step further can make them world-renowned brands. Once the brand is established, pricing power naturally comes into one's own hands.