With the acceleration of global economic integration, China hardware tool processing industry has become the main force of the world’s hardware industry. The extensive applications and large demands of hardware tools go beyond imagination no matter in global tools market or Chinese tools market. The demands for hardware tools of some developed countries are increasing with the speed of more than ten percent every year. Hardware tool is a labor-intensive industry, as the hometown of hardware tools, Yong Kang City once became the gathering place of hardware tools with their traditional competitive advantage of low cost. Their products are not only sold well in domestic cities, but also exported to Europe, America, Africa, the Middle East and so on, moreover, they have consecutively hold fourteen China Fairs in China Technology Hardware City. In recent years, under the influence of a series of unfavorable economic factors such as the rising of labor force cost, the increase of raw material price and the financial crisis, etc., a large number of manufacturers and dealers of Hardware City have increased the strength of research and development and sale on their own brands.

Two year ago, the export rebate rate of hardware tools decreased, the RMB appreciated rapidly, which had reduced the hardware tools profit margin. In the next place, the production of hardware tools is mainly affected by the price of raw materials. So the instability of steel market will also result in high sales risk on hardware tools. Hardware tools are low-profit products, and the market competition is fierce, therefore, it is impossible to raise prices uniformly. Some dealers said that to increase price individually is undoubtedly to hand over old customers. With the increasingly furious competition in hardware tools market, how to keep the Hardware City’s sustainable development state has become an important problem for numerous dealers.

Relevant person analyses that when an industry entering the maturity stage after going through initial and developing stage, it often has entered a fine development stage. Hardware tools are more mature industry in Hardware City, if business operators want to develop in such environment they should find a way toward segment market. Hardware tool is a labor-intensive industry, China hardware tools account for a large share in international market with its advantages of raw materials price and low labor cost. The market competition of Yongkang City, which is the hometown of hardware, also is very fierce. In terms of foreign trade export, the situation of hardware tools is also not optimistic, in recent years it is gradually losing its original cost advantages under the impact of the raw materials price rising, the change of the export tax rebate, the exchange rate increasing and some other disadvantages, the customer loss is serious. After visit reporters find that many dealers have started to develop toward segment market on the basis of introducing into well-known brands, the segmentation trend of hardware sales is becoming increasingly obvious. From the big perspective, hardware tools can be divided into hand-power tools, pneumatic tools, combination tools, auto tools and craftsman tools. Hand-power tools include wrench, pliers, screwdrivers and so on. Pneumatic tools also cover assembly and cutting tools. The purpose of subdividing hardware tools is to make its market has pertinences. In a wide variety of hardware tools, the high-grade and fine combination and automotive vehicle tools are becoming people’s new favorite.

After more than ten years development, now with a complete range of varieties and specifications and stable product quality, the hardware tools that operated by Hardware City are gradually forming serialization, standardization and brandization, moreover, some introduced famous high-quality products also have competitive power in international market. Many dealers also said, there is a long way to go for Hardware City’s hardwareto take a firm stand in international market. As distributors, they should accelerate the research and development of new products, improve the backward technology, enhance the scientific technology content level of products and increase the added value; to be based on local culture background, establish their own brands, construct effective information channel and fast-response decision mechanism, build well-deserved reputation, supply high quality products and excellent service for customers, and believe that the future of hardware tools will be better.