Analysis of the Problems Faced by China's Bathroom Hardware

Due to the increase in prices of raw materials and other factors, the bathroom hardware industry not only failed to usher in the spring but it was challenged by consumers. Is it really profitable profits?

Profits have begun to decline. Now we take the current steel price as an example. The price of steel rose by RMB 100/ton during the day of March 17, 2011. In less than a month, the prices of various steel products rose 300 yuan to 500 yuan. The rise in steel prices has made it impossible for the steelmaking industry, which originally made less profits, to show its superiority. It has generally shown that profits can be almost zeroed and that the benefits of economic recovery are almost offset by an empty one.

Taking bathroom hardware as an example, the biggest cost of producing a tap product is the cost of raw materials. The current faucet products are mainly based on copper materials, and the price of copper is about 38,000 yuan/ton, according to industry insiders, raw materials. The cost accounts for more than 70% of the total production cost. According to the domestic gross profit margin of 30%, the cost price of a faucet is approximately 200 yuan.

2011 is the implementation period of the Twelfth Five-Year Plan. The mold industry has ushered in the spring, and general experts are optimistic about the development space of the mold. It was predicted that during the 11th Five-Year Plan period, the market share of the Chinese mold industry will reach 120 billion yuan. However, the reality is that because there are relatively few contacts in the high-end industries and foreign companies have received **, the profit margin is also very poor.

Many hardware and electromechanical companies, including bathroom hardware companies, are all good and bad, and they share the same low profits. Their comprehensive analysis is not exceptional:

1, there is no professional market to cultivate the general consumers to buy hardware products is the principle of proximity, in a random grocery store, daily supermarket to buy, and the hardware industry is not closely related to the development of professional markets.

The traditional hardware product distribution center is no systematic marketing strategy, and lack of related regional protection, stable price system is beyond discussion. Once the professional hardware market is formed and the market has strong supervision, the hardware companies that settled in can be guaranteed to be worthy of the name, forming the centripetal force of consumers' purchases, avoiding the production, the flocking of peers, and the phenomenon of blind purchases.

2. There is no comprehensive brand capacity Hardware products that are generally circulated in the market have a single style, outdated style, and have rough workmanship, and even no brand protection, thus failing to gain consumer trust.

According to relevant market surveys, 45.3% of hardware consumers use the brand as the primary demand for acquiring products when purchasing hardware products, which implies that it is even more difficult for unnamed brands to gain a foothold in the market. Brands are obviously a signpost in this era of complicated information. They can focus on their own unified management in order to help promote them.

3. Foreign-funded enterprises snatch the market A large number of China's hardware products are produced by small workshops, especially the mold industry. Because they are not professional and sophisticated, many foreign-funded enterprises have an opportunity.

On the contrary, foreign mold companies are mostly small and specialized, small and precise; the proportion of self-produced and self-made molds is as high as 50%, and over 70% of foreign molds are commercial molds.

The proportion of large-scale, sophisticated, complex and long-life molds in the total domestic molds is only about 30%. More than 50% abroad. The ratio of imports and exports was 4.1:1 in 2003; the net import after import and export was US$1.03 billion, which is the country with the largest net import volume.

4. The rise in raw materials began in the middle and early December of last year, and international copper prices have repeatedly set a record high since breaking through 9,000 US dollars/ton. According to Shanghai ** market data, the copper price rose by 32% year-on-year in half a year, while the steel price rise for two consecutive months will continue into the first quarter of this year.

The mainstream brands of air conditioners, refrigerators, washing machines, range hoods, cookers, sanitary ware, sterilizers, and water heaters, etc., will gradually have a 5%-10% price increase. Compared to the end of last year, the increase in raw material costs has caused production costs to rise by 5% to 8%. Zhou Xiaotian, president of Hisense Kelon, said.

The rise in raw materials was a hardware development buzzword in 2010. By 2011, it has not diminished its thermal agenda. Raw material prices have also raised the prices of general products. At the same time, the net profit promotion space cannot be compared with the past.