Giant Star Technology: From OEM to Overseas Expansion, the Breakthrough Path of Chinese Hand Tool Companies

Amidst the steady growth of the global hand tool market, cross-border e-commerce is becoming a crucial engine for China’s foreign trade transformation. According to Statista, the global DIY and hardware store market generated $285.7 billion in revenue in 2023, with core tool categories accounting for approximately $85 billion. This market is projected to grow at a CAGR of 2.48% over the next few years. Previously, international brands held a significant market share in the global hardware tool market; now, domestic companies are rapidly breaking through by adopting a global strategy of technological brand expansion. Against this industry backdrop, Li Feng, Senior Vice President of Great Star Technology, a veteran who has witnessed and participated in China’s foreign trade transformation, joined the company in 1997—a company that started by selling hammers—and has personally experienced the entire process from OEM manufacturing to the globalization of its own brand. Founded in 1993, Great Star Technology has grown into Asia’s largest and one of the world’s top three hand tool companies. Headquartered in Hangzhou, its main business covers multiple categories including hand tools, power tools, and laser measuring tools. It owns several world-class tool brands such as ARROW and SK, and its products are sold to more than 180 countries and regions. In 2024, the company achieved operating revenue of 14.795 billion yuan, a year-on-year increase of 35.37%; net profit attributable to the parent company was 2.304 billion yuan, a year-on-year increase of 36.18%, both setting new historical records. How can a traditional hardware industry generate billions in revenue? Behind high profits and high growth, how does it continuously attract overseas users? Let’s explore the secrets to its successful brand expansion overseas. Great Star Technology’s overseas expansion was not achieved overnight; its starting point was a profound understanding of the drawbacks of the traditional OEM model. Early on, it became an OEM for many internationally renowned brands thanks to its strong manufacturing capabilities, accumulating a solid production foundation and market experience. However, the biggest problem with the OEM model is the lack of pricing power. Although the domestic hardware tool industry cluster can achieve partial import substitution, the profit margin is severely squeezed because the product prices are lower than international brands. To achieve sustainable development and maximize profits, expanding into overseas markets and building its own brand has become an inevitable choice. This strategic shift is inseparable from favorable conditions of timing, location, and people. As an OEM manufacturer for many well-known brands, Giant Star Technology already has a thorough understanding of the product categories and pricing requirements of the international market, which has laid a solid foundation for its subsequent R&D innovation and market expansion. More importantly, the company has continuously strengthened its capabilities through a series of strategic acquisitions. In 2015, it acquired a 65% stake in laser measuring tool company Huada Kejie; in 2017, it acquired Arrow, a US nail gun giant; and in 2018, it acquired Lista Holding AG, gradually improving its product line layout. In 2015, Great Star Technology officially entered Amazon, embarking on its own brand’s overseas expansion. Amazon played a crucial role in its internationalization process. Logistics, as a key link in cross-border e-commerce, directly affects the market competitiveness of products. Great Star Technology chose to fully utilize Amazon’s supply chain services, with over 90% of its goods shipped through Amazon Global Logistics (AGL). Leveraging Amazon’s global reach, new products can be quickly expanded to emerging markets worldwide, increasing launch speed by 30%-50%. Great Star Technology is also well-prepared for holiday season promotions such as Black Friday and Christmas. Relying on Amazon’s logistics solutions, it can not only easily handle peak order volumes during the holiday season but also reduce inventory pressure, indirectly increasing profit margins. In 2024, Great Star Technology achieved revenue exceeding 14.7 billion yuan and net profit exceeding 2.3 billion yuan. Behind this impressive performance lies its product strategy centered on independent research and development and regional customization. The company employs over 600 engineers in China and has local engineers in various countries, collaborating with different market consumer preferences to develop products. 80% of its products are independently researched and designed. Its engineering team produces an average of one patent per month, launching an average of one new product per day within a year, resulting in at least 100 patented products annually. This strong R&D capability supports the company’s premium product strategy. Looking ahead, Great Star Technology will continue its deep collaboration with Amazon, leveraging its precise market data and global reach to develop more products that meet market demands, expand into emerging markets such as Latin America, the Middle East, and Australia, and lead the Chinese hand tool industry from “Made in China” to “Created in China.”