Zhejiang Small and Medium-Sized Fastener Enterprises Begin to Make their "Second Choice"

By , 2008-03-08 12:00:00

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In the past, as there were quality problems in fasteners, most of the fastener products could only access the maintenance and fittings markets. Nowadays after innovation, a group of leading fastener enterprises in Zhejiang Province are no longer the same as the situation in the past in terms of equipment level, technical level, product grade, service level and R&D capacity.

After interviewing some small and medium-sized fastener enterprises in Zhejiang, a reporter noticed that those fastener enterprises featured small and household workshop at the beginning has greatly improved in aspects of profession, differentiation, technical contents, quality, etc. It indicates that these enterprises have begun to make their "second choice".

According to the main economic indicator of China fastener industry in 2006, the overall profit level of domestic enterprises was relatively low. The profits of quite a few enterprises were less than 3%, which is related to their small scale, and low technical contents of the products.

Insiders hold the view that a lot of small and medium-sized fastener enterprises have not walked out the traditional profit mode and still keep the old practice¡ªlow cost, low price, low technical contents, and low value-added. It is definitely a kind of choice, but not a long-term and strategic one. What small and medium-sized enterprises need is their "second choice". In Wenzhou, Ningbo and Haiyan where private-owned fastener enterprises gather, over 50% of the products that most of the small and medium-sized enterprises produce are the low-end standard fasteners. They are of low technical contents and have competitive price. However, they lack core technology and their own feature, so their competitive strength is accordingly weak.

The enterprises that reporters visited all consciously transfer to produce products of high technical contents and high value-added. These enterprises share the same background: Developed from machine parts and established in the late 1980s. Nearly 20 years of accumulation, they begin to step into the pattern-transforming phase. They access the automotive fittings system and therefore achieve progress in terms of technical upgrade and management. Some enterprises have passed ISO/TS 16949, which is considered as an essential passport when products are fitted for domestic machines or exported to overseas market.

Insiders also maintain that the profit space of fastener industry will become smaller and smaller under the tight competition environment. The expansion of low price results in the expansion of low profits. Before long, enterprises will find little space for their existence. Therefore, small and medium-sized fastener enterprises have to make their second choice and step into the mid and top-end market. Four transitions should be carried out in fastener marketing idea: From simple product operation to market operation; turn the focus from machine factory to distributors and serve for customers; from single market body to multi-market groups; their attention to domestic market exclusive turns to both domestic and international markets.

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Zhejiang Small and Medium-Sized Fastener Enterprises Begin to Make their "Second Choice"

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