China has become the world’s largest producer and exporter of hardware products, and Africa is becoming a new frontier for China’s hardware exports.
Recently, a Chinese Hardware Brand Overseas Conference held in Shanghai attracted international buyers from Egypt, Jordan, Nigeria, South Africa and other African countries to participate. The amount of intended cooperation reached on the spot exceeded 80 million US dollars.
After decades of development, China’s export volume of hardware products will exceed US$160 billion in 2024. Tool hardware is the fastest growing field. International brand competitiveness has initially taken shape. The industry is moving from the “Product Output 1.0 Era” to the “Brand Overseas 2.0 Era”.
From a “manufacturing power” to a “brand power”, according to data released by the Autumn National Hardware Fair, the hardware industry, as the basic sector of the manufacturing industry, is expected to exceed US$1.2 trillion in global market size in 2024.
China’s hardware product exports account for 35% of the global market share, but the high-end market penetration rate is less than 10%.
At the same time, Chinese hardware manufacturers are improving their international competitiveness through strategies such as technological innovation, digital empowerment and sustainable supply chain development.
Experts from the Research Institute of the Ministry of Commerce said that my country’s hardware industry still faces challenges such as weak brand power, insufficient R&D investment (less than 2%) and international green and technical barriers (such as EU CE certification). It needs to strengthen brand building, increase R&D investment, and improve the standard certification system to promote the transformation from a “manufacturing power” to a “brand power”.
A large Saudi Arabian buyer said that Africa’s huge market potential and booming economic situation have become an important target market for China’s hardware tools exports.
Currently, Chinese hardware tools account for 46% of the Saudi market share.
China is also South Africa’s largest import source of hardware tools, accounting for 46.9% of total imports.
South Africa has always been a market that global hardware tool companies are competing to expand.
An exhibitor from South Africa said that in the past, South Africa’s building materials were generally more expensive because most of them were imported from Europe and the United States. Chinese hardware and building materials products, production equipment and construction machinery, etc., are very competitive in terms of product variety, grade, and price, and have great trade potential.
Sayed, an Egyptian young man, has lived in China for more than 23 years. He is engaged in China-Africa trade and can speak fluent Chinese.
He said that China is exporting more and more goods to Africa, and hardware products are also a popular area.
Other items he trades include consumer electronics and electric vehicles.
“Chinese products are very popular in Africa. Our company is a family business with offices in Yiwu and Guangzhou, exporting Chinese goods to African customers. Hardware is also a product type with fast-growing demand, from some small tools to production equipment.” Sayed also said, “With the rapid expansion of manufacturing industries such as automobiles, the demand for hardware will also grow significantly.”
In Sayed’s view, China is developing very fast, while Africa is like China 30 years ago, with rapid population growth and huge consumption potential.
He also mentioned that African e-commerce has also begun to gradually emerge.
In March this year, Ethiopian Airlines Group announced the official completion of the e-commerce logistics center located at the Bole Airport in Addis Ababa, the capital. This is the first e-commerce logistics center in Africa. It is expected to shorten the time for loading goods from abroad to Ethiopia to less than 7 days.
Supply chain collaboration and standard innovation face challenges.
A Saudi buyer said: “Delivery time and logistics solutions are the most prominent challenges in current cooperation with Chinese suppliers, which require more efficient supply chain coordination.” The chairman of the Power Tools Branch of the China Electrical Equipment Industry Association believes that China’s power tool industry is currently transforming from DIY and OEM to mid-to-high-end, but it is facing the challenge of standard innovation and application, and there is an urgent need for middle- and middle-end companies to pay attention and innovate in standards.
In this regard, the president of Yuyao Hardware Products Association shared the company’s overseas experience.
He said: “Promoting standardization and brand building through associations, and using government platforms to organize companies to ‘go overseas in clusters’ can effectively reduce costs and improve risk resistance.” Most hardware tool manufacturers are small and medium-sized enterprises, and these companies have also begun to “go overseas in groups” to build an ecosystem.
Some experts said that in the process of Chinese companies going to Africa, an important topic is integration into the ecosystem.
“This requires Chinese companies to cooperate with European small and medium-sized enterprises to promote a sustainable development model.” The expert said, “European companies have a strong cultural foundation in Africa, and the advantage of Chinese companies lies in their manufacturing and innovation capabilities. They have unparalleled infrastructure construction capabilities, a highly cost-effective manufacturing system and efficient project execution speed.” He believes that Chinese companies can use the retail network cooperation operated by French companies in Africa and use Chinese-style innovation to jointly develop markets locally.
This “cluster” approach to overseas operations can greatly reduce risks and increase success rates.
