In recent years, with the acceleration of global economic integration, China’s hand tool processing industry has gradually become the main force in the world’s hardware tool production industry. No matter in the global tool market or in the Chinese tool market, the application and demand of hand tools are beyond imagination. The demand for hand tools in some developed countries is increasing at a rate of more than ten percent every year. According to the incomplete statistics of several large tool factories in Shandong Province, the annual production and sales volume reaches tens of millions.
The most common product categories produced by hand tool manufacturers in mainland China are mostly fastening tools, such as basic hand drills, impact socket wrenches, and combination tools, and these products have high growth potential.
At present, the production of hand tools is mainly affected by the price of raw materials such as steel. Manual tools are mostly low-profit products, and the market competition is fierce. It is impossible to increase the price uniformly. Individual price increases will undoubtedly mean giving up old customers, and no one dares to take the risk of losing the market. Under normal circumstances, if the products are sold to other industries, the hand tool industry is required to reduce the price by about 10% compared with the previous year. It can be seen that once the steel price rises sharply, it will directly affect the survival of hand tool manufacturers.
At the same time, in addition to the company’s own reasons, the product competitiveness of hand tools is determined by the quality of raw materials, that is, the quality of steel. At present, the steel used in some hand tools still has problems with surface quality and internal cracking. It is a problem of steel smelting technology that cannot be ignored.
At present, the main market of Chinese hand tool manufacturers is the overseas market. In particular, hand tool manufacturers in Fujian, Jiangsu, Shandong and Zhejiang are increasing their production capacity to fully cope with the expected rise in export sales, expand overseas market coverage and obtain better profit margins by producing mid-range and high-end products. Manufacturers of hand tools are full of confidence in the prospects, and more than 50% of them predict that the growth rate of overseas markets will exceed 10%.
In the past, China was mainly used as a production base for hand tools. In recent years, with the rapid growth of the domestic economy, China has become the most potential consumer market for hand tools. Industry insiders believe that the mainland domestic market is no less than the European single market or the North American market, and the number of consumers of hand tools is at least 400 million. Numerous hand tool manufacturers have entered the Chinese market.
The sources of information for Chinese consumers on hand tools are mainly concentrated in specialty stores, exhibitions, fairs, and salesperson sales. It is especially worth mentioning that consumers do not know enough about the brand when they first purchase. Know the brand and quality of hand tools after purchasing and using them. It can be said that the brand building of hand tools is the best time for Chinese hand tool companies.
Looking at international tool companies, the gap between Chinese tool companies is obvious
In terms of scale, foreign companies are relatively large, such as Carter Corporation of the United States, which is one of the top 500 S&P companies. Its products include hand tools and power tools, automotive diagnostic and repair equipment, diagnostic technology and related products, which are widely used in automotive, aviation and other commercial fields. Most of China’s tool companies are small in scale, and their product series are not rich enough, which is a typical “many but not strong”.