The shift of the focus of the hardware and electrical machinery market towards smaller and medium-sized cities is an inevitable trend.
Release time:
2013-03-30 10:26
Source:
The hardware and electrical machinery market serves as a parts warehouse for industrial enterprises. Many industries require hardware and electrical machinery products such as screws, nuts, wrenches, hammers, and bearings. Luo Baihui, the chief operating officer of Jinmo Hardware and Electrical Machinery Network, believes that the shift of the hardware and electrical machinery market's focus towards smaller and medium-sized cities is an inevitable trend. Whether or not a hardware and electrical machinery market is built in a certain region depends on many factors. The level of industrial development in a region determines the scale of the local hardware and electrical machinery market. At the same time, the local hardware circulation volume, the number of operators, the turnover, regional finances, and the ratio of industry to agriculture should all be included in the research scope.
The Taixing hardware and electrical machinery project, as a pilot program for this trend, has chosen Taixing as its location for the Jiatai Hardware and Electrical Machinery City. This is because the hardware and electrical machinery trade and circulation in Taixing were previously rather scattered, while the demand for hardware and electrical machinery products was huge, making a professional, large-scale market urgently needed. Taixing also has a strong industrial foundation. With the rapid economic development and changes in the local hardware and electrical machinery industry structure, Taixing urgently needs to integrate and consolidate the wholesale and circulation of hardware and electrical machinery products.
As is well known, speed reducers are a key industry in Taixing, and their development scale and status have become increasingly prominent nationwide. In Taixing City alone, there are more than 200 speed reducer companies and related supporting production enterprises. This suggests that Taixing City may transition from "China's speed reducer hometown" to a "strong speed reducer city," becoming the manufacturing center for speed reducers in China. Therefore, it is obvious that the rapid development of Taixing's speed reducer industry will lead to an increasingly large rigid demand for hardware and electrical machinery. According to statistics, the annual demand for hardware and electrical machinery in Taixing City is currently around 10 billion yuan. In the next few years, the demand for industrial equipment in Taixing will continue to grow, indicating that the hardware and electrical machinery industry in Taixing will usher in unprecedented historical development opportunities.
It is reported that the Taixing Jiatai Hardware and Electrical Machinery City project covers an area of 83 mu (approximately 5.5 hectares) with an investment of 300 million yuan. The first phase of development covers 50 mu (approximately 3.3 hectares), bringing together more than 10,000 kinds of famous, high-quality, special, and new hardware and electrical machinery products from home and abroad, radiating to Taizhou and surrounding areas.
The Taixing Jiatai Hardware and Electrical Machinery City is invested and constructed by Shanghai Jiatai Investment (Group) Co., Ltd., with strong support from the Taixing Municipal Party Committee and Government and relevant partners. Yang Qinghong, president of Jiatai Investment Company, told the author that this Jiaxing project is a pilot program for the group in Jiangsu Province. The group plans to promote a chain model for hardware and electrical machinery markets nationwide, and the Taixing Jiatai project is the group's first step outside of Shanghai, with plans to gradually expand nationwide.
Firm Belief, Rebirth
Currently, in addition to the Taixing Jiatai Hardware and Electrical Machinery City, the Shanghai Hardware City also belongs to Shanghai Jiatai Investment (Group) Co., Ltd. The Shanghai Hardware City has been in operation for 10 years. Jiatai's operational management team in the hardware and electrical machinery field is well-tested. The past 10 years have greatly tempered this team. In Yang Qinghong's words, "It's not because of our past successes, but precisely because our team has experienced many failures." Initially, the Shanghai Hardware City's insufficient positioning and planning led to a bumpy start. Early recruitment was difficult. Prospective clients who visited the site, seeing the empty environment, often shook their heads. However, with perseverance and a sense of responsibility, the group's senior management decided to persevere, but at a painful cost in time and money.
However, as long as the right direction is found, persistence will bring rewards. At that time, Chairman Mao and General Manager Yang were constantly reflecting and summarizing. They believed that the hardware city's positioning was not accurate enough, the product planning was too simple, and the scale was too large, all of which needed improvement. The overly large market scale was irreversible, and could only be gradually digested. The idea at the time was that as long as they persisted, even gaining one more customer per month was progress. The first year's recruitment was bleak, with 600 businesses joining and half leaving. In the second year, only 60 new businesses were added. But by the third year, the market atmosphere began to warm up, with over 100 new businesses added, and in the fourth year, over 300 more were added. From then on, the Shanghai Hardware City gradually improved.
However, unforeseen circumstances struck. Starting in March 2006, the Shanghai Hardware City suddenly entered a period of stagnation. Due to the high advertising investment, there were temporary financial difficulties. Coupled with the slow sales of properties and rental of shops, the company fell into a slump, and Mao Xianyun himself fell into the lowest point of his entrepreneurial journey.
Despite this, Mr. Mao Xianyun did not give up and continued to persevere. He believed that although the location of the Shanghai Hardware City was not ideal, it was located in Jiading District, Shanghai's main industrial area, and surrounded by industrial enterprises, thus possessing significant demand potential. It only needed careful cultivation to reveal its market prospects. Therefore, Mao Xianyun persisted while constantly seeking solutions and addressing problems as they arose. Finally, through persistent efforts, his hard work paid off, and from 2007 onwards, the hardware city's performance began to improve.
From then on, the Shanghai Hardware City emerged from the shadows and gradually grew stronger under clear skies. Now standing on Baoqian Highway in Jiading District, Shanghai, the Shanghai Hardware City has become one of the leading hardware industry exhibition centers in China.
Improving Recruitment, Operation, and Management Capabilities Through Practice
When asked about the advantages of Jiatai Investment's "Jiatai Hardware and Electrical Machinery City" Brand, Yang Qinghong replied: "Because we possess excellent capabilities in recruitment, operation, and management of professional hardware and electrical machinery markets. The core of a successful market is not how beautiful the buildings are or how low the construction costs are, but whether the team has the ability to manage a project well."
After ten years of experience with the Shanghai Hardware and Electrical Machinery City, this team has accumulated rich experience in managing hardware and electrical machinery markets. For example, they have a clear understanding of market positioning, customer capacity, product coverage, and the type of product structure customers need. Managing a hardware and electrical machinery market requires two teams: one responsible for development and the other for operational management. The two teams cooperate with each other. The management team can put forward their ideas and suggestions from the beginning of the project, such as the design of the building's exterior, room types, and water and electricity requirements. The role of the development team is to translate these ideas into reality. In addition, General Manager Yang also summarized that recruitment should begin during the mid-stage of construction of the hardware and electrical machinery market, with recruitment essentially completed upon completion. The Taixing Jiatai Hardware and Electrical Machinery City is a good example of this. This approach proposed by Jiatai Investment's management team is fundamental to their success.
After recruitment is complete, the important task is management. This requires a professional operations team to play its role. After investigation, many markets currently exhibit this phenomenon: after the developer completes the project, they essentially leave the market alone. This situation is caused by two reasons: one is that the developer cannot manage it due to lack of professional background and understanding of the merchants' needs, i.e., they "dare not manage." The other is that they are unwilling to manage because management requires costs. However, the Jiatai Hardware and Electrical Machinery City has successfully addressed these two issues. They have a strong recruitment and operational management team, familiar with every aspect of the process. Moreover, they are willing to manage and can achieve profitability through their methods. Yang Qinghong gave an example: the many empty spaces in the market are actually valuable advertising spaces, and property fees are also a source of income. There are many other ways to solve operational problems.
To attract customers, a market must demonstrate its economic viability from a business perspective. Key factors include customer base, the developer's platform appeal, the management team's competence, the credibility of the vision, and the market's future prospects—all of which must be supported by facts. The Jiatai Hardware and Electrical Appliances City team provides merchants with trust and assurance.
Customers establish trust and understand the economic benefits before considering local government incentives and developer-provided services. A professional team, a professional market, and professional management are Jiatai's strengths, advantages that will gradually spread through industry reputation. Currently, many merchants at Taixing Jiatai Hardware and Electrical Appliances City come from Shanghai Hardware City, with some referrals from industry associations nationwide and others who independently visited to investigate.
Establishing Jiatai Hardware and Electrical Appliances City Achieves Secondary Take-off
In 2010, Mao Xianyun, chairman of Jiatai Investment, decided to create a new professional regional market and launch a brand called "Jiatai Hardware and Electrical Appliances City," with its first location in Taixing, Jiangsu. He aimed to create a higher-quality, more professional hardware and electrical appliances market in the industry, using an innovative chain model to create a new type of "First Hardware City" in China. Mao Xianyun's foresight led to the second take-off of his career.
Based on his experience with Shanghai Hardware City, Mr. Mao Xianyun deeply understood the importance of enterprise informatization. In recent years, the rental rate in Shanghai Hardware City hadn't significantly increased; however, transaction volume had grown daily. This was due to the rise of numerous online stores within the city. Therefore, he resolutely decided to strengthen the company's IT construction and increase the intensity of online promotion and sales. After building the "Taixing Jiatai Hardware and Electrical Appliances City," Mao Xianyun summarized his past experiences and looked ahead to future development trends. He decided to build the Taixing Jiatai Hardware and Electrical Appliances City website in addition to the Shanghai Hardware City website and link all his hardware and electrical appliances cities together for comprehensive promotion, ultimately creating a unique "Jiatai Hardware and Electrical Appliances City" Brand.
Currently, Shanghai Hardware City has hundreds of E-Business companies and over a dozen express delivery companies—none of which were deliberately recruited by Shanghai Hardware City. Although it's just an online platform, these companies generate significant sales. For instance, one online store specializing in water pumps had annual sales of 300 million yuan, and many similar online distributors exist. For online stores in Shanghai Hardware City, the location offers low costs, a complete range of products, and convenient logistics. The invoicing volume of E-Business companies in the city almost matches that of physical transactions. However, Shanghai Hardware City itself does not build online platforms; they only provide guidance.
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