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Hardware lock industry differentiation trend is obvious
In the article, it is highlighted that since 2009, the hardware lock industry has faced a long period of decline due to the global financial crisis and government policies affecting the real estate sector. While traditional hardware companies struggled, the smart home industry, particularly electronic locks, experienced rapid growth. This shift has led to a clear differentiation in the market, with traditional locks becoming less competitive and smart home solutions gaining traction.
Zhang Xiaoguang, Deputy General Manager of Zhongshan Huafeng Lock, noted that while production output continues to rise, profit margins have remained stagnant. He emphasized that transformation is essential for long-term survival. Similarly, Yan Wei from Yashanghelai pointed out that rising labor costs have eroded China's cost advantage compared to countries like Vietnam and the Philippines, forcing many companies to phase out low-value products.
Despite these challenges, companies focusing on smart security are beginning to thrive. For instance, Yangge Locks, established in 2007, has become a leading player in the electronic lock industry, securing major contracts for events such as the Nanning ASEAN Conference Center, the Shanghai World Expo, and the Guangzhou Asian Games. These successes reflect the growing potential of the smart home market in China.
Yang Ge, President of Yangge Locks, pointed out that the Chinese market for smart locks is still in its early stages, with only a 5% penetration rate compared to 95% in Europe and the U.S. This gap represents a huge opportunity for growth. He believes that as consumer awareness increases, the market will soon experience a significant boom.
However, transitioning from traditional hardware to smart technology is not without its challenges. Many companies have found that the initial investment does not yield immediate returns, making the process slow and difficult. Yang Guangui from Yangge Locks shared that they started producing smart locks in 2007, but profits took time to materialize. He remains optimistic about the future, predicting that the Chinese market will soon see an explosion in demand.
Industry experts suggest that for Zhongshan’s hardware companies to remain competitive, they must focus on specialization and regional branding. A well-known company representative warned that if Zhongshan does not act quickly, it may lose its position to cities like Shenzhen. The government should play a key role in building industrial clusters, optimizing the business environment, and developing a complete supply chain to support innovation.
Currently, two major bottlenecks in Zhongshan’s hardware industry are technological limitations and a lack of skilled talent. To address this, the government needs to invest in infrastructure, education, and research to strengthen the industry’s foundation. Building strong regional brands can also help increase visibility and trust among consumers, benefiting all companies in the sector.
In conclusion, the hardware lock industry is at a critical turning point. Companies that adapt and embrace smart technologies will be better positioned to succeed in the evolving market. With the right strategies and support, Zhongshan can once again take a leading role in the global smart home industry.