Hardware companies move in the long-term, transformation or upgrade, or a way out

The increase in costs and the decrease in profits have made labor-intensive enterprises have to try their best to deal with them. The author notes that internal migration, transformation and upgrading, and domestic sales are the most frequently used methods in the hardware industry in the Pearl River Delta, but in reality, the internal migration is not In the long run, transformation and upgrading are the way out, and domestic sales are different for different companies in the hardware industry.

Inward migration is only a respiration
"Foxconn" moved in, allowing more hardware companies to once again turn their attention to the inland areas where manpower and land have advantages. Hardware is a labor-intensive industry, and labor-intensive industries started in Europe. When costs could not be supported, they moved to South Korea, Japan, and China's coastal areas.

Experts analyze that as the cost rises and the company cannot support it, it will continue to migrate to Bangladesh, Vietnam, and China's inland areas. However, the period of development of enterprises after the transfer seems to be getting shorter and shorter, and companies must plan ahead. Other outlets.

Affected by the migration of some labor-intensive enterprises, some hardware companies began to look at the cheaper labor market abroad, but the final result was not satisfactory. "Although the wages there are much cheaper, but the labor efficiency is quite low, and the infrastructure is very bad, the raw materials are not matched. Considering these factors, the simple advantage of human resources will be weakened." A person in charge of a hardware company said .

The person in charge also complained to the author that under the existing supporting resources and logistics conditions in Bangladesh, the products produced cannot quickly meet the needs of customers. More companies have chosen to move inward than outward migration.

Some hardware companies have also begun pilot projects for inland migration. Taking into account the larger proportion of the cost of raw materials, they chose a place closer to the raw materials. "Our line, the problem facing Guangdong is that it may be necessary to leave this place to a remote place, otherwise it will be difficult to compete." Some companies said. However, the inadequacy of supporting facilities in the Mainland has also made many companies discouraged. Ye Zhenbo, manager of Runfeng Metal & Plastic Co., Ltd., said to the author, “Like a company that is completely exported like us, the possibility of inland migration is relatively small, because if you move to the middle and west, transportation, procurement, and supporting can't keep up. Once you have a more urgent order, you will not be able to complete it."

The important factor that drives the company's internal migration - the cheap labor force will no longer exist in a few years. "Now the salary increase has become a nationwide trend." Ye Zhenbo said, "People in our industry have said that if you want to move out, you will die immediately; if you move out, you will die later, and you will die sooner or later." Li Shaoxi, director of the director of Pioneer Hi-Tech (Dongguan) Co., Ltd., said, “Some companies moved back after moving, because the logistics cost is too high, the supply of parts and components can not keep up, and the wages in the inland areas have risen after two years. ""Guangdong Dongguan and other coastal areas are taking the road of Hong Kong 20 years ago, and the mainland is now taking the road of Dongguan. With the development of society, the development cycle of labor-intensive industries will also be shortened." Lin Xiaoning said, "We are Some investments in the inland can be supported for 5 years."

Enterprises actively transform and upgrade
In the case that the internal migration does not solve the problem fundamentally, many hardware companies have chosen to increase investment in research and development and carry out transformation and upgrading.

Runfeng Metal & Plastic Co., Ltd. used to produce traditional household products such as CD racks and stainless steel trash cans for household use. Under the pressure of survival, the company has begun to develop new products. According to Ye Zhenbo, in the first half of the year, the company has newly developed 15 kinds of products, which are relatively large in research and development, and will continue to research and develop new products in the future.

Pioneer Electronics Dongguan Co., Ltd. has already tasted the results of transformation and upgrading. According to Li Shaoxi, the company mainly produced traditional DVDs and optical drives. Due to the financial crisis, orders have been greatly reduced. However, since the end of 2009, it has begun to seize the opportunity to switch to the production of high-definition Blu-ray DVDs, and the order volume has been fully recovered. "Because HD Blu-ray DVD has just emerged, the market space is still relatively large. The company has more orders in this regard. The current order has increased by more than 30% compared with the same period in 2008. And the high-definition Blu-ray DVD has a high unit price, so the output value has doubled." Li Shaoxi said.

Turning domestic sales companies into different attitudes
Export-to-domestic sales were once considered an effective way for export-oriented companies to cope with the financial crisis, but after more than a year, the perception of this choice has diverged.

A person in charge of the company told the author that from the end of 2008, the company's products began to be partially transferred to domestic sales, and now it will slowly put some energy into the domestic market. "The Chinese market is very amazing." Ye Zhenbo also said that The company is developing the domestic market in a planned manner. However, some hardware companies do not believe that export to domestic sales is a way out. In China, although hardware companies are in the extensive production stage, there are many brands. If 30% of hardware export enterprises are exported from domestic to export, serious commodity flooding will occur. Nowadays, companies are doing branding and selling domestically, and this is done as a "domestic movement". The result is very serious.

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