Hardware Mould Industry: Market Brand Boosts Enterprise Upgrades

As a gathering place for sales, the professional market in Dongguan is the place where “manufacturing capital” products have become a place of income. It is also a distribution center for all kinds of information and an information hub. Various professional markets in Dongguan are developed, with different scales and different forms. The "Dongguan Factory Outlet Center" located in Wanjiang South China Mall opened at the end of April 2010. It has taken steps to try and, after the baptism of the market, Dongguan will truly achieve a transformation and upgrading.

Dongguan professional market boosts the transformation and upgrading of the manufacturing industry. Dongguan's professional market can be traced back to 1993. The town of Fumen Fashion in Humen Town was born. The original processing companies poured themselves into independent brand marketing to test the water, creating a miracle in Dongguan's industrial development history. So far, Humen has more than 2,000 garment companies. It has one well-known Chinese trademark, three China famous brand products, 12 national inspection-free products, 16 famous trademarks in Guangdong, and 11 brand-name products in Guangdong Province. The indicators are far ahead in Dongguan. Humen garment industry also became the only mature brand in Dongguan except furniture.

To transform a large-scale Dongguan processing and manufacturing company, there must be a platform to act as the “touchstone”. Only by accessing the market can companies know how to deal with the storm and it is possible to get rid of the old model. This platform is a professional market.

17 years ago, Humen, an ancient town famous for Lin Zexu's sales of cigarettes, rose to a rich-minded fashion city and achieved brand myths in the Dongguan garment industry. Since then, Dongguan has no second wealthy people, until the financial crisis has forced a new professional market. With the promotion of private capital and the guidance of the government, the professional market in Dongguan has been gathering up. Enterprises have “borrowed ships to the sea” and the atmosphere of transformation and upgrading is spreading to all walks of life.

According to Luo Baihui, head of the International Mould and Metals and Plastics Industry Suppliers Association, as of the end of April 2008, Dongguan has opened 151 professional markets, 11 under construction and unopened markets, covering garments, IT, light textile, agricultural and sideline products, hardware machinery molds, food, furniture and more than 20 industries. Driven by the professional market, in 2009, the total retail sales of the wholesale and retail industry in the city increased by 14.7% year-on-year, which became an important driving force for GDP. In the three industrial structures, the proportion of the tertiary industry increased by 5.6 percentage points year-on-year, and the total scale of the industry surpassed that of the second industry in the history of Dongguan.

It is precisely because of the major role of the professional market in industrial upgrading. When identifying industrial clusters, Dongguan also requires that there must be an integrated professional market within the cluster to form a relatively complete industrial chain. In 2009, Dongguan began to explore the “factory outlet center” model, trying to use financial funds to support the professional market, so that Dongguan companies can explore the market at low cost and embark on the road to brand marketing. Up to now, Dongguan has identified four direct sales centers.

In 2009, under the influence of the financial crisis, the manufacturing industry in Chang’an suffered serious setbacks, with GDP growth only at 3.1%, which was lower than the average level in the city. This result is because the metal molds and electronic information industry in Chang'an City rely heavily on OEMs' external sales. There is no mature commercial atmosphere behind the high value of production. The Humen Town, which has competed with Chang’an for a long time, relied on the clothing industry that had long been engaged in domestic sales and brand management, as well as the mature commercial and trade industry such as Fumin Fashion City, and was less affected by the financial crisis. The GDP growth rate reached 13.8%.

In the face of such a sharp contrast, Chang'an Town is not reconciled, and they also want to create their own myth of rich people. On April 26th, 2009, Changan Township, a publicly-owned “Zhongyuan City Jewelry Trading Center”, had a total investment of 1.6 billion yuan, a planned total construction area of ​​560,000 square meters, and more than 13,000 shops. Chang’an’s enterprises were mainly export-oriented. The sales model was just production of orders, and there was almost no channel for construction. What Public Source City needs to do is to change the sales model for enterprises, establish sales channels, provide incubators that build brands, and achieve industrial transformation and upgrading. At present, more than 1,300 foreign-funded enterprises in Chang'an have more than 400 metal molds. Among the more than 1,000 private enterprises, more than 600 of them focus on the production and sales of this industry, with an annual output value of 15 billion yuan.