China International Hardware Show Powered By PRACTICAL WORLD

About the Market

Shanghai is a city that seems to have broken out of a time capsule and fast tracked 30 years of modernisation! Cars have replaced push bikes as the primary means of transport and its infrastructure and communication systems rival that of any major city.

As an observer at the world’s second largest Hardware Show I was awed by the reality of exponential growth that China continues to offer. Much of this insight came from speaking to the organisers and my Chinese counterparts, who publish trade journals for the Chinese hardware and Import/Export industries.

An initial search in the Lonely Planet guide provided me with the following basic information in Shanghai. In 2004,

 

  • Shanghai’s GDP totalled US$90 billion (annual increase of 13.5%);
  • industrial profits totalled US12.2 billion (car production, steel, petrochemicals, IT, biopharmaceuticals and chemicals). A 23% increase from the previous year;
  • Shanghai received the largest amount of direct foreign investment of any world city – Foreign-funded businesses makes up 60% of total imports and exports;
  • foreign investment soared to US$11.7 billion, with a projected double-digit growth in 2005 – almost 40 times that of 1985;
  • annual exports amounted to US$73.5 bilion, (an increase of 51.7% on the previous year); and
  • 281 companies on the Fortune 500 list set up offices in Shanghai, with 97 multinationals having a presence in the city.China’s economic profile in current terms reveals the following in the first quarter of 2007:
  • The national economy kept steady and fast growth with a estimation of the GDP at RMB5,028.7 billion (year-on-year increase of 11.1%).
  • Of the above total, secondary industry contributed RMB2,555.2 billion (led mainly led manufacturing and industry growth – up by 13.2%).
  • Improved efficiency led to the speed up of industrial production. The total value added of the industrial enterprises above designated size was up 18.3% year on year. Of this total heavy industry was 19.6% (up 2%) and light industry was 15.6% (up 0.9%).According to recent statistics , not only is China growing in terms of sales, but profits are also soaring. In the first two months of 2007, profits stood at RMG 293.2 billion (year on year increase of 43.8%).

    As a result of China’s industrial might, retail sales on the domestic front are also growing. This is an indication of a rapidly growing and changing economy. Domestic retail sales of consumer goods reached RMB2,118.8 billion (year on year increase of 14.9%) and in the first quarter, the consumer price index rose by 2.7%.

    Exports also continued at a feverish pace thanks to foreign direct investment. Total value of imports and exports of the first quarter was US$457.7 billion (up 23.3% year on year).

    About the Trade Show

    The event is a gateway for international exhibitors to gain a successful foothold in China. Owned and organised by the China National Hardware Association (CNHA) since the 1990s, the show was initially set up as an export vehicle. Two shows ago, Koelnmesse partnered with CNHA to bring in their professional exhibition experience and background to attract more international participants and buyers.

    In 2007 an estimated 45,000 professional visitors attended the show, including 5,000 overseas professional buyers from 80 countries and territories. Spanning eight halls over 80,000 square metres of gross exhibition space (2006: 1,600 exhibitors on 70,000 square meters), the trade show housed approximately 1,700 exhibitors from 25 countries and regions. The largest contingents were from Germany, Taiwan, China and Italy, while India accounted for the greatest increase in exhibition space.

    About the Exhibitors

    Michael Dreyer, Vice President Asia Pacific of Koelnmesse said that adding an international exhibitors component to the show created competition for quality amongst exhibitors. “It shows the domestic Chinese exhibitors what the world market is like,” he said. “It demonstrates what the quality standards overseas are, what the requirements are, and what non-Chinese competitors are putting into the market.”

 

For Denz Enterprises, manufacturer of hardware fittings and a second time exhibitor, the show represented a good investment because businesses are moving towards the source of the product rather than the destination. Kanwar Deep Junejam, Chief Executive of Denz Enterprises, said that the show not only provides a platform for buyers sourcing products, it also created opportunities for the creation of exclusive partnerships.

The show also presents an excellent opportunity to showcase new lines and products. “Two to three years ago, we didn’t have leather, acrylic or glass handles,” he said. “Next year we will introduce a range of drapery hardware to complement our range of door, window and furniture handles – one design story for the entire room.”

This year’s show was also particularly rewarding for China-based European tool manufacturer M-CRAFT. Their innovative COSMOS atomic hexagonic screw driver uses 3-material injection moulded handle technology developed in China and unique wave-form ergonomics to generate huge torque transfer and reduce work-stress. It was awarded the 2007 Product Innovation Design Award.

Michael Kim, Commercial Director of M-CRAFT, noted that many retailers and industries are steadily relying on high-quality and innovative products. “M-CRAFT provides customers with really comprehensive methods for combining high-quality industrial hardware with full-scale logistic supply”. It is evident that Chinese-made products have moved from cheap tool manufacturing to products with innovation, R&D, quality and logistics supply expertise. Benjamin Dalziel, Regional Sales Director of Positec, says China has evolved dramatically. Dalziel says that manufacturing has moved away from copying products and becoming more of a market leader than a market follower. “China has been about getting cheaper products, the low end opening price point stuff… they are now capable of manufacturing to the level of Bosch Blue to compete with other brands.” Dalziel sees the Shanghai show as the future for expos in china, where the venue offers larger display stands and a better image compared to other fairs. It allows his company to effectively showcase the 4-levels of Positec. “We call ourselves the one-stop destination… we can basically find the cheaper products that you need – the price fighting items… right up to the Bosch Blue level.”

About the Visitors

Travis O’Sullivan, Managing Director of Melbourne-based Hardware Supply Company and a show visitor in 2007, says that the show offers an excellent platform to source for product, ideas and packaging style. “Certainly some factories have improved considerably with technology and QC… (we are) looking for any ideas we can bring back into our business,” he says.

Fellow Aussie visitor Phillip Mansfield, National Sales Manager from Fix A Tap agrees, “The perception of China equals cheap is improving… as their technology advances, it enables them to produce better quality products while still offering competitive pricing.” Phillips says that he benefited from the show because he could experience first hand the products used in other markets (USA and Europe) and thereby ascertain if they are suitable for Australia. In general, everyone I spoke to agreed that the event was brilliantly organised and managed.

Next year’s show is scheduled for September 17 – 19, 2008 at the same venue. Visit www.cihs-practicalworld.com for more information.

Ray Quek is the Director of Sales & Marketing for Glenvale Publications.

ChinaMachinePress