An Analysis of the Status Quo of Development of China Gas Cooker Parts Industry

To do business first is to do the industry. Without this height, the length of the company's life can't be made. The first thing to do is to make the market the trend. Without the foundation of consumer trends and resource agglomeration, we can't do the depth and breadth of the market. The gas stove component industry is a sub-sector, and the market size is relatively small, but we should also see that small products can be made into large markets, and the development of the gas stove component industry is also promising. The author believes that the development of the gas stove parts industry is to grasp the time, rhythm, and spatial layout of the rise and fall of industrial life cycles and industrial resource flows.

one. China's gas stove parts industry has stepped into the threshold of maturity. China's gas stove parts and the whole industry breakdown was probably completed in the 1990s. This is marked by the emergence of specialized manufacturers of key components such as controllers (plug valves), burners, pulse igniters and panels. After the first 10 years of development in this century, the parts and components industry has grown into a long period of time, has entered the threshold of maturity, and formed two distinctive industrial clusters in the Pearl River Delta and the Yangtze River Delta.

At present, most of China's regions have initially completed the popularization of medium and low-end gas stoves, but differences in the regional distribution of high-, middle-, and low-grade products and the difference in the number of sales are still significant. As a subordinated component industry, it is affected by the overall machine industry pattern. At the same time, it is also squeezed by upstream industries such as raw materials and hardware processing suppliers, and is in a state of survival. The industry is also a mixed bag, and the number of companies certified by qualified suppliers is much smaller than the total number of companies. However, the opportunities in the future belong to enterprises that can grasp the trend and take the initiative to carry out capacity improvement and strategic layout.

Judging from the main and auxiliary divisional criteria of the industrial economic cycle of industrial economics, China's gas stove parts industry has the following major characteristics of the maturity period:

1. The growth rate of industrial added value began to drop rapidly, but the curve of the industrial life cycle still at a relatively high level was generally based on the time series data of the growth rate of industrial added value. The growth rate of the total sales value of the gas stove component industry It has begun to decline in recent years, but it is still at a high level of around 20%. The highest level of this level reached more than 40% before and after 2000. The growth process of the leading enterprises of several major parts and components has been close to this trajectory for more than a decade. This is due to the increase in the size of the entire market, that is, the increase in the base number and the fact that market gaps are basically filled and the first-time buying behavior is reduced. However, the elimination of low-quality products that meet the needs of the low-end products is relatively rapid, while the development of high-end demand is also relatively rapid. Therefore, the level of growth rate is still relatively high. 2. The rapid increase in brand concentration from the lowest point of brand concentration is the ratio of the total sales of the larger leading companies to the market sales of the entire industry. This proportion may be higher during the industry formation period due to fewer employees in the industry; however, as a large number of companies enter the growth stage, sales will become decentralized, and this proportion will drop to a low level as the competition intensifies. point. However, after competition and reshuffling, large-scale enterprises emerged and formed a strong brand advantage. With the strengthening of industry standards and the improvement of consumer quality requirements, the downstream industry quickly eliminated inferior supplies and shifted purchases to branded companies, and parts and components in the middle reaches. The market share of brand enterprises in the industry has naturally been expanded. After the year 2000, the development of the real estate and decoration industry led to the promotion of high-end cooking appliance parts industry, and in 2008, the amendments to the national standards including mandatory flameout protection and greater calorific value were introduced and introduced for controllers, flameout protection devices, and burners. The stimulation of sales of high-quality parts and components is the case when the industry transitions from mature to mature. Around the year of 2000, in the gas stove parts industry in China, the brand concentration of the five important components, such as controllers and flameout protection devices, burners, pulse igniters, and panels, was less than 20%. 30%, the highest has reached 40%.

3. Relative profit margin starts to decline from the highest point but the profit margin level is still high. In the past few years, when white goods and black appliances entered the era of shopping, the industry profit margin of kitchen appliances once became the industry’s high profit margin of about 50%. Dark horses, gas stoves and their parts and components industries also maintain a high level of profitability. However, in recent years, many large home appliances companies and other industries have entered the market to intensify market competition. At the same time, the world's material prices have continued to rise. The gross profit level of the stove parts industry has started to decline, and it has basically dropped to 20%. The gross profit level may be about 30%. Compared with other mature manufacturing profit levels, this is still relatively high.

4. Industrial organization structure is a monopolistic and competitive environment where large and small enterprises coexist The main gas stove component industries have formed large enterprises with large scale, high brand awareness, and high market share, such as Xintao in the controller industry. , Botton, Vantage, Xiangfeng, Mingke, etc., combustor industry's Hesheng, Feiya, Xiangji, Guangling, Handan, etc., pulse igniter industry Budweiser, China Fortune, etc., flameout protection device industry Three countries, overseas Chinese, Budweiser and so on. However, medium-sized enterprises and small-sized enterprises still coexist, and the market competition relationship is a state of monopolistic competition. That is, monopolies are formed in different product grades and market regions, but competition among large enterprises, small and medium-sized enterprises, and large enterprises still exists. Downstream vendors have a relatively stable supplier base. Most of them are large brand suppliers and two to three small and medium sized suppliers.

two. Problems in China's gas stove parts industry 1. The degree of brand concentration does not meet the requirements of the ideal industrial resource efficiency model. China's brand manufacturers of gas stove component industries have all formed, but compared with the ideal industrial resource efficiency model and the developed regions of the world, the scale of the enterprise is still relatively small, and the whole Most of the machine manufacturers' support is limited to the local market, the market area has not yet been completely broken, and the industry brand concentration is not high enough. According to statistics, the production and sales volume of the four giant manufacturers in the European market such as Sabaf and Kaprolis together accounted for more than 70% of the total production and sales volume of various types of kitchen appliances and accessories in Europe. Disappeared. From the perspective of business size, the annual sales of the Sabaf and Kaopuixi controllers range from about 15 to 20 million units, while the sales volume of several brand controller companies in China is up to 10 million units per year. Judging from the base of market demand, the scale of China's branded enterprises should be much larger than that of European brand enterprises.

Although excessively high brand concentration will have a negative effect on monopoly, it is of great benefit in strengthening standardization, raising the level of standardization, and improving the efficiency of the industrial chain. Gas stove parts technology content itself is not high, the entry threshold is low, SMEs tend to be competitive strategies tend to cost leadership strategy, the investment in new product development, quality assurance are relatively small, intellectual property awareness is not strong, it is difficult to reach The consensus of industry norms that it is difficult to achieve industry norms has limited the overall level of the industry. The parts and components industry is the intermediate link of the industry chain, and does not touch the terminal market channels. There are many factors that are constrained. There is a lack of strong conditions for the whole machine industry, the advantages of industrial concentration are obvious, and the advantages of the whole machine industry outweigh the disadvantages. The negative effect of monopoly is far less than the positive effect.

2. The product structure of the leading parts and components leading enterprises is relatively simple. In addition to Guangdong’s Hesheng and Budweiser, a few leading component manufacturers are producing more than two components of stoves, such as Xintao, Bolton, Feiya, Xinda. , Qiaoheng, Yi, Taim, etc. only produce one type of component. Although from a professional point of view, in line with the idea of ​​doing a special job, but after all, the market value of these products are relatively small, after a single enterprise annual sales of over 100 million after lack of stamina. The industrial relevance of these parts and components is very high. The quality and function level of the whole machine is a comprehensive reflection of each key component. The synergy effect in the market, production capacity and technology is also very obvious, and the single product has obvious waste of resources. From the perspective of the cost reduction of parts and components companies, increase of business growth points, and avoidance of industry risks, a single product structure is not optimal. From the point of view of supporting the continuous improvement of the quality of the whole machine industry, continuous product innovation, and cost reduction, it is beneficial to strengthen the coordinated development of different parts and components and implement a multi-dimensional product structure. In terms of product structure layout, Guangdong Hesheng Co., Ltd. has done the best. The leading product quality involves many series such as burners and water heater controllers.

3. There are obvious regional limitations in industrial cooperation. As far as the two major industrial clusters of the Pearl River Delta and Yangtze River Delta are concerned, the parts and components industry is mainly dependent on the complete machine industry in the region, and there are obvious regional colors in the development and competition strategies. Guangdong's complete machine companies and parts and components companies mostly adopt diversified development strategies and cost-leading competitive strategies. For example, Vantage has not outsourced components such as controllers, and Evergreen has evolved from the controller business to the downstream in the entire area. Enterprises in the Yangtze River Delta region have adopted centralized development strategies or associated diversified development strategies and quality-leading competitive strategies. Almost no brand companies have made key components in addition to the panels. Branded parts and components companies are all year round. Adhere to a single species of business. The ecological relationship between the two major industrial clusters is also based on local supporting local procurement. However, in terms of the market layout of a single product, Zhejiang Xintao Company has done its best, in addition to Zhejiang local brand customers, but also with the northern, southern and central regions of Boxihua, Haier, Sakura, Wanhe, Wanjiale and Xunda. The customers have established a stable and cooperative relationship.

4. The R&D power is relatively weak, and there is a need to establish a pilot system to assist product innovation activities. The production of these important components and parts in China is a labor-intensive model. The added value is relatively low, and innovation results in functions, environmental protection, energy conservation, and cost-effectiveness are not significant. . Brand enterprises all have certain R&D strength, but they are still weak in adapting to the requirements of customers' product development. In recent years, they have not seen a revolutionary new product development success. Many small and medium-sized enterprises have very weak R&D strength, indifferent intellectual property rights, and inability to eliminate infringements. This has a great impact on the enthusiasm of large companies for independent innovation. The profit margin of the industry during the mature period will continue to decline, and the quality of consumer demand will generally increase. If there is no product innovation to avoid homogenous competition, the price war will rise one after another, and the entire industry will enter the recession in advance.

A good testing system is very important for product development and quality improvement. As a safe product and highly demanding product, the industry does not have a scientific and reliable test system to participate in product development and ensure product quality. It is very dangerous to directly take the market and consumers to do the test. It always depends on the test system of the entire customer. It is not very convenient. Japan's stove testing system is very mature. Japanese product companies establish a product experience center that employs housewives of different backgrounds to engage in full-time product experience and help improve product functionality and quality. The reason why the development of many smart gas stove control systems in China can not mature is the lack of a sound and reliable operating parameters, and these operating parameters is to rely on the test system to obtain.

Attempts to establish industry-oriented research and development and testing institutions have begun in the leading companies in the parts and components industry. In the past two years, under the authorization and support of the Hardware Association of the Hardware Association, Zhejiang Xintao Co., Ltd. has established the China Gas Appliance Controller R&D Center, and Guangdong Hesheng Co., Ltd. has established the China R&D and manufacturing base for gas burners. Service industry plan. However, a set of scientific, economic, and effective test systems still needs further improvement.

5. There is still a big gap between quality and the world's leading level. There is still a wide gap between world-leading performance, performance, materials, and energy consumption. Regarding the acceptance rate of customers, China's gas stove parts brands are still hovering above and below the level of 2000 PPM, and there is a big gap compared with the world's leading level. The China Gas Appliance Quality Supervision and Inspection Center took the lead in formulating the Class A product standards for the two products of controllers and flameout protection devices that are in line with European standards. However, there are only a few companies that can truly meet the standards.

The reasons for the quality gap are, on the surface, existing in design technology, equipment level, process technology, and quality control. The fundamental reason lies in the investment in business philosophy and R&D expenditure.

three. Some suggestions for the development of China's gas stove parts industry believe that this segmented industry of gas stove parts and components industry in China will have a greater role in the context of domestic economic development and globalization. From my limited knowledge, I believe that strengthening some of the work from the following aspects will be conducive to the development of the industry.

1. Adopt coordinated development strategies and quality-leading competitive strategies. The synergy of marketing, the synergies of production capacity, the synergies of supply chain and logistics, and the synergistic effects of operating management resources all contribute to the diversified operation of parts and components companies. Conditions. The development of multiple parts is conducive to improving the overall level of technology of different parts and components, which is beneficial to the guarantee of after-sales service, and is more conducive to reducing costs and stabilizing the cooperative relationship with the complete machine manufacturers. The life cycle of several components, especially the trend of decline or transformation, is affected by the development of energy and electronic technology. The fate will also be different. In this sense, technological development and manufacturing that involves several parts at the same time will be of great benefit in coping with the uncertainties of the industrial recession and capturing opportunities for industrial transformation.

In the same industry competition, quality is advocated instead of low-cost competition. Increasing the cost-effectiveness under the premise of quality assurance is a competitive strategy that is beneficial to the long-term development of the industry. Relative to the entire industry, gas stove parts have a smaller weight in the cost structure, but they are at the core of their function and quality. Therefore, the space for low-cost components and parts is very limited, and the space for optimizing functions and performance and increasing the cost-effectiveness is very broad, and it also attracts the attention of the entire manufacturers.

2. Study consumer trends, establish product testing systems, develop forward-looking products for complete machine manufacturers, increase demand levels and consumption requirements, and develop new technologies. The development of component products should change the passive pattern processing model. It should be positive. Study consumer trends, develop forward-looking products for complete machine manufacturers, comply with and guide consumer trends, and take the initiative in market competition. Environmental protection and energy conservation, anti-dry burning, large firepower, non-polar fire, instant ignition, smoke stove linkage, integration of smoke stoves, touch-sensitive control, and cooker concepts with scheduled and timed model intelligent control systems are all at an experimental stage. The stylish appearance of the appearance has also become an important product design factor. In short, safer, more economical, and more humane should be the guiding ideology for forward-looking product development.

Leading qualified companies should establish an economical and effective test system through cooperation with complete machine manufacturers, other parts and components companies, research institutes and even terminal consumers to speed up product innovation and improve the efficiency of product development. . Companies should design documents such as projects, specifications, and record requirements for product testing and experience. Training, implementation, and data collection may be more reliable and helpful than market research.

3. Strengthen industry self-discipline, cooperation and exchange, and raise the awareness of society and consumers Gas stoves, parts and components and other electrical products are also imported, but due to the special features of the function and cultural differences, together with the domestic industry With the efforts of insightful people, we have established an industry standard with local cultural characteristics, obtained a lot of independent intellectual property rights, and established a professional committee for parts and components. All these have laid a good foundation for industrial development and participation in international competition. However, industry supervision, self-discipline and cooperation and exchange activities.