A showroom full of four or five large open spaces on one floor has a dazzling array of hand tools and lithium-ion battery power tools. Foreign customers often look at goods from time to time.
On a sunny day, the author came to Juxing Technology, located in Jiubao, Hangzhou. This recruit who joined the capital market this year has actually fought for 18 years in the highly competitive hand tools market.
Unlike the noisy production environment of traditional manufacturing companies, the most popular factory site is office buildings. This can not help but make people feel curious about the operation of Asia’s largest and world’s top six hand tool manufacturers.
“The R&D and sales personnel occupy the majority here. We also have a factory in Xiasha, which is mainly used for the production of high-end products independently developed by the company.†Seeing the author wondering, Super Star Technology Secretary General He Tianle explained that with general manufacturing companies simply sells. Different from the self-produced products of the company, only about 30% of the high-end products sold by the company are made by the company. The remaining 70% of the products are produced through the processing of foreign companies and have more than 600 foreign companies.
As a typical representative of asset-light companies, R&D, channels, brands, and self-production plus external collaboration models have become the four core competitiveness of Superstar Technology. In the field of hand tools, Superstar Technology is one of the few tool hardware companies in Asia that can launch its own branded products into the world's highest-end building materials hardware chain supermarkets.
Today, the hardware giant, which sells foreign and world-class companies, has also taken advantage of domestic consumption upgrades to implement both internal and external strategies. Ju Xingjian, chairman of Juxing Technology, believes that exporting domestic sales is not a simple meaning to open up the domestic market. It is actually an upgrade of the status of enterprises in the global industrial chain. This upgrade will also achieve a major change in corporate strategy.
Consumables attributes of hand tools highlight
Innovating to become the source of development
Different from the idea that Chinese hardware products, especially hand tools, belong to the concept of durable goods, hand tools and hand-held power tools have obvious consumer goods attributes in Europe and the United States. They are mainly used for home DIY activities such as houses, gardens, and vehicle maintenance, and outdoors. Sports etc.
"For Europe and the United States, DIY has gone deep into culture and life. Consumers are often no longer content with the core functions of the product, but also attach more importance to the additional functions and comfort of the product." He Tianle said that customers in Europe and America design products. The requirements for versatility, exquisite craftsmanship, stylish look and ergonomics are increasing, and products with new designs and new features often bring new demands. In large festivals such as Christmas and Halloween, they usually choose hand tools as gifts. “For Superstar Technology, pushing innovation will become the source of corporate development.â€
According to statistics, Superstar Technology has tens of thousands of products in seven series including hand tools, cutting tools, measuring tools, lighting tools, combination tools, and lithium battery power tools. It is one of the most extensive hardware tools companies in the world, with 98% of its products used. At the exit.
The trend of domestic consumption upgrade also allows Superstar Technology to see the growth potential of high-end tools in China. Looking solely at the large outdoor sports equipment market, the total sales of outdoor equipment in China from 2002 to 2007 increased by 26 times from RMB 100 million to RMB 2.6 billion. According to industry insiders' forecasts, the market will exceed 10 billion yuan each year.
Strong new product development capabilities
Development intensity comparable to top hand tools company
As a world-class hand tool company, Superstar Technology has world-class product research and development capabilities and the largest team of engineers in the industry. The company not only invests tens of millions of dollars in new product development every year, but also extends R&D and technology innovation to each employee through a number of systems, and establishes an efficient system of innovation.
The superstar technology selected for the Top 100 Independent Enterprises of Chinese Enterprises in 2008 has a strong design capability. "We introduce about 400 new products each year, and the proportion of new product sales revenue has increased from 59% to 70% in the past three years." Mr. He Tianle, the director of the Board of Directors, said that the core strengths of R&D are personal design and rapid response capabilities.
For Superstar Technology, the mass consumption attributes of DIY tool products determine the characteristics of diverse market demands and strong personalization. As new designs and new functional products often bring new demands, the development and design capabilities of new products are The key factor that determines the popularity of an enterprise product.
The company has an international leading technology center, with product and appearance R & D design team and processing center. The efficient product and mold design center, as well as the independent injection molding workshop and rapid prototyping workshop, greatly shortened the company's new product design cycle and improved the market's response capability.
The continuous increase in the proportion of new products has also directly promoted the rapid increase in the company's profitability. Even when the financial crisis hits export-oriented enterprises, the company's gross profit margin has always been on an upward path, and its net profit has increased from 65.34 million yuan in 2007 to 215 million yuan in 2009, an increase of approximately 2.3 times. Compared with its domestic and foreign peer companies, Superstar Technology's profitability is far ahead.
Gadgets have a global market
Meet one-stop shopping needs of large customers
With its powerful product design capabilities and quality management capabilities, Superstar Technology has become a very small group capable of providing a full range of personalization for the world’s largest home building and building chain supermarkets, including Lowes, HomeDepot, Greatneck, UK, Kingfisher, Bricodepot and CTC. Product hand tool business. In the world, there are more than 20,000 large-scale hardware, building materials, auto parts, department stores and other supermarket chains selling the company's products.
Thanks to its significant channel advantage, Superstar Technology has significantly expanded its product line to tens of thousands of products by sourcing products from other manufacturers in China to meet the one-stop shopping needs of large foreign customers. Currently, Superstar Technology has designed and developed more than 650 kinds of products for British Kingfisher, designed and developed more than 600 kinds of products for Lowes, designed more than 260 kinds of products for Carrefour, and designed and developed over 120 kinds of products for HomeDepot.
This will not only further strengthen the company’s cooperation with foreign retail giants, but also expand the company’s sales scale and profitability. In 2009, Superstar Technology has owned more than 600 outsourcing factories and the proportion of product outsourcing has reached 70%.
At present, the annual growth rate of the global hand tools industry is 3-5%, and the US as the first consumer market for hand tools has an average annual growth rate of 10%-15%. The global hand tool market has a capacity of about 40 billion U.S. dollars, and China's exports account for about 14%. From the proportion of China’s exports and the proportion of the company’s exports in China, the company’s growth as an industry leader will be very broad.
Three types of business develop together to open up the domestic market
Exporting domestic sales to reveal industrial chain upgrade
Compared with the past, relying almost exclusively on exporting alone, with the help of the capital market's power, the super-rich star technology began to expand the business opportunities in the domestic market, and the simultaneous consolidation of the three types of business will undoubtedly accelerate the process of its domestic layout.
“The domestic market has become a major market for the growth of the world’s hardware. The company is able to grasp the opportunities for upgrading domestic consumption through three ways: Sheffield boutique stores, hardware chain stores and distributors.†He Tianle said.
In the strategy map of Superstar Technology, it includes the development of DIY and outdoor sports high-end hardware consumption through boutiques, and the development of domestic industrial-grade tool market through hardware chain supermarkets and distributors.
On May 1, 2010, the first Sheffield boutique in China was opened in Vientiane City, Hangzhou. The boutique stores its own brand “Sheffieldâ€, which is mainly for high-end consumer groups. At present, the company has opened three boutiques in Hangzhou and plans to open 500 boutiques nationwide in the next 3-5 years.
Superstar Technology has set up Hangzhou Superstar Steel Shield Co., Ltd. to develop the domestic market through the dealer model and developed more than 1,200 products specifically for the domestic market as the first product line to enter the domestic market. Currently, Superstar Steel Shield has established more than 20 primary dealers and more than 30 secondary distributors in China.
Ju Xingjian, chairman of Juxing Technology, believes that domestic sales for domestic sales is not a simple meaning to open up the domestic market. It is actually an upgrade of the status of enterprises in the global industrial chain. This upgrade will also achieve three fundamental changes in corporate strategy. : The transformation of business model, profit model, management and operation mode; transformation from processing workshops to brand suppliers and even industrial chain managers; the company's core capabilities are made up of manufacturing advantages, cost advantages, productivity advantages, quality advantages, and technological advantages. Brand advantage, marketing advantage, and R&D advantage.
From simple manufacturing companies to companies that can control both manufacturing and commercial circulation in upstream manufacturing and downstream terminal consumption, Superstar’s asset-light model gives it the right to speak in the market, and is considered by the star technology as another domestic business. The journey is also more emboldened than before.
Actively seek out expansion opportunities
Build own brand to increase gross profit margin
Compared to most of the domestic tool hardware companies still adopting OEM (generation processing) business model, the company's business model has been in the stage from ODM (original design manufacturer) gradually to the OBM (original brand manufacturer) transition.
Although it has entered the top six global hand tools, its own "GreatStar", "Sheffield" and many other own brands have become internationally more well-known tool hardware brands, but the goal of superstar technology is obviously more than that.
"Compared with Stanley's gross profit margin of more than 40%, there is still a large gap between our gross profit margin of about 30%. The main reason is that the company's own brand share is still relatively low." Superstar Technology executives agreed that the future development It is crucial to build their own brand.
As early as the listing, Superstar Technology has always had the desire to expand through the acquisition of well-known foreign manufacturers of hardware tools. Nowadays, the successful listing of the company, especially the super-raised funds, has provided an opportunity for the expansion of extensions.