“New Man­u­fac­tur­ing” Pro­motes Busi­ness Up­grad­ing of Tra­di­tional Com­pa­nies

China's Foreign Trade (English) - - Industrial Watch - By Ada Wong

Dur­ing Spring Fes­ti­val, the Zhangqiu hand-made iron pan was first high­lighted in the third sea­son of the doc­u­men­tary “A Bit of China”. Within four days, its flag­ship on­line store had wit­nessed a 6,000 times in­crease in sales. The over­whelm­ing pop­u­lar­ity of the iron pan led to short­age of sup­ply and the busi­ness sup­pli­ers had to made a dec­la­ra­tion that con­sumers shall be rea­son­able in con­sump­tion whiling re­spect­ing the tra­di­tional art.

The ex­am­ple high­lights a new pop­u­lar phrase — “new man­u­fac­tur­ing”.

Gain ad­van­tage via big data

The emer­gence of new con­cepts like big data, cloud com­put­ing, the In­ter­net of things and mo­bile in­ter­net is al­le­vi­at­ing the predica­ment of tra­di­tional man­u­fac­tur­ing com­pa­nies. The in­no­va­tion is bold and the prod­ucts have more rec­og­niz­able fea­tures.

In­sid­ers of the in­dus­try pointed out that the big data of the ser­vice in­dus­try will pro­vide more tai­lored de­sign, man­u­fac­tur­ing and pro­duc­tion ser­vices for tra­di­tional man­u­fac­tur- ers, mak­ing the in­dus­try smarter and smarter. Mean­while, the in­ter­min­gling be­tween big data and tra­di­tional man­u­fac­tur­ing in­dus­try will pro­duce new pro­duc­tive ser­vice in­dus­try and pro­mote the in­dus­try up­grad­ing.

Ac­cord­ing to 2017 China Elec­tron­ics and Elec­tri­cal Ap­pli­ance In­dus­try Re­port re­leased by GFK, in 2017 Chi­nese elec­tri­cal ap­pli­ance brands are mak­ing progress through “made in in­ter­net”. The new types of prod­ucts, like dish-wash­ing ma­chine, sweep­ing ma­chine, blade­less fan, mimi wash­ing ma­chine, em­bed­ded mi­cro steam roast­ing ma­chine and high elec­tric cooker have be­come driv­ing forces of the growth of Chi­nese elec­tri­cal ap­pli­ance. It is es­ti­mated that in 2017 the top 5 elec­tri­cal ap­pli­ance prod­ucts sold on Tmall plat­form in­clude air-con­di­tioner, mo­bile phone, LED tele­vi­sion, kitchen ap­pli­ance and re­frig­er­a­tor. Th­ese five prod­ucts take an over­ar­ch­ing po­si­tion with the share of sales sur­pass­ing 50%.

The per­son re­spon­si­ble for Haier’s e-com­merce busi­ness said that by way of Tmall’s big data tech­nol­ogy, Haier has found that con­sumers have pain point when wash­ing cur­tains and bed­ding prod­ucts and large-ca­pac­ity wash­ing ma­chine has large mar­ket po­ten­tial. Haier de­cided to grasp this op­por­tu­nity by pro­mot­ing 10-kg fre­quency-con­ver­sion and rolling wash­ing ma­chine, which be­came a hit of the mar­ket. Sim­i­lar sto­ries hap­pened to the dish wash­ing ma­chine of Midea. By the end of De­cem­ber 2017, Midea, Haier and Xiaomi have wit­nessed their sales sur­pass­ing RMB 1 bil­lion on Tmall plat­form.

“The new re­tail of China’s elec­tri­cal ap­pli­ance is not about sell­ing well, but man­u­fac­tur­ing good prod­ucts.” Yin Jing, pres­i­dent of Home Ap­pli­ance De­part­ment of Tmall, said that Tmall’s big data has be­come new pro­duc­tion ma­te­ri­als of the home ap­pli­ance man­u­fac­tur­ing in­dus­try. It is up to con­sumers to de­cide what to pro­duce by en­ter­prises, which will trans­late into an ef­fi­cient and in­ten­sively-op­er­at­ing C2B model.

Yin Jing men­tioned that in 2018 Tmall will work with fa­mous brands to es­tab­lish a new brand in­no­va­tion cen­ter and IOT group to breed new prod­uct va­ri­eties, to make Chi­nese prod­ucts smarter, more per­son­al­ized and tai-

lored. Also, Tmall will pro­mote “China Crafts­man” plan on­line and com­bine with off­line plat­forms like Sun­ing and Rt-mart, to pro­mote the growth of Chi­nese pro­duce.

Tra­di­tional com­pa­nies need smart ren­no­va­tions

Zhang Xing­hai, chair­man of Chongqing Sokon In­dus­try Group, said that the smart era of big data has ar­rived and smart ren­o­va­tions of tra­di­tional in­dus­tries and en­ter­prises are quite ur­gent. But some com­pa­nies still face dif­fi­cul­ties in in­dus­try tran­si­tion and up­grad­ing, es­pe­cially in terms of cap­i­tal.

Sokon In­dus­try Group is a pri­vate com­pany fo­cus­ing on the man­u­fac­tur­ing and sales of whole ve­hi­cle, ve­hi­cle en­gine and com­po­nents, with a to­tal rev­enue of more than RMB 10 bil­lion. Zhang Xing­hai deeply felt the ur­gent needs for the up­grad­ing of the man­u­fac­tur­ing in­dus­try. He said that Chongqing is a big city of tra­di­tional man­u­fac­tur­ing in­dus­try. Since 1980s, Chongqing has wit­nessed the emer­gence of a batch of state-owned and pri­vate man­u­fac­tur­ing com­pa­nies in­volved in the pro­duc­tion of mo­tors and mil­i­tary sup­plies. Chongqing ranks top in terms of man­u­fac­tur­ing of whole ve­hi­cle and com­po­nents, with Jial­ing Mo­tor and Changan Ve­hi­cle as the best ex­am­ple. “How­ever, as the era of big data ar­rives, the tra­di­tional in­dus­tries will fall be­hind if there are no in­dus­try tran­si­tion in place.”

In fact, the big data tech­nol­ogy is ex­pand­ing the sales chan­nels of tra­di­tional man­u­fac­tur­ing in­dus­tries. Shen­zhen Keteng Co. Ltd. is a smart ve­hic­u­lar ex­pe­ri­ence com­pany that op­er­ates Ten­cent’s ro­bot smart prod­ucts. Its Chengge brand has been seen on the Didi car-hail­ing plat­form of Hangzhou.

The founder of Keteng Zheng Chongjian said that the Chengge brand will uti­lize big data tech­nol­ogy to pro­mote and op­ti­mize the shar­ing econ­omy, to con­nect car pas­sen­gers with their tai­lored needs. The GPS po­si­tion­ing and other per­son­al­ized ve­hic­u­lar data will be used to com­bine con­sumers with their real live ex­pe­ri­ences, to make their ve­hic­u­lar ex­pe­ri­ences more col­or­ful.

Zheng Chongjian said that as a ve­hic­u­lar ser­vice com­pany, its ser­vices like mu­sic sys­tems and on­line sales plat­forms would be im­pos­si­ble with­out the sup­port of a large num­ber of man­u­fac­tur­ing com­pa­nies. He said that big data is the ba­sis of smart man­u­fac­tur­ing and its man­u­fac­tur­ing process in­cludes data col­lec­tion and man­age­ment, or­der man­age­ment, smart man­u­fac­tur­ing and cus­tom­ized plat­form. The core of the process is cus­tom­ized plat­form.

Guizhou Ori­ent Steel Mar­ket, which has been crowded with buy­ers and sell­ers, now sees few visi­tors be­cause of the big data tech­nol­ogy. But its busi­ness is ex­pand­ing. The com­pany’s vice pres­i­dent Han Xun said that as Guizhou’s largest steel trans­ac­tion mar­ket, the com­pany has con­trolled a com­plete set of trans­ac­tion data. It uses “bulk com­mod­ity trans­ac­tion plat­form”, which in­cludes e- com­merce, stor­age and lo­gis­tics plat­forms, to clearly dis­play in­for­ma­tion about trans­ac­tion, pay­ment, bill, trans­ac­tion price and vol­ume. He said that in the era of big data, all th­ese data is a gold mine for the steel mar­ket.

Tai­lored man­u­fac­tur­ing as a new trend

Nowa­days both small com­modi­ties like cups and T-shirts and so­phis­ti­cated prod­ucts like cell­phone and elec­tri­cal ap­pli­ance need de­sign. In that sense ev­ery­one is a de­signer.

Con­sumers are free to choose their pre­ferred prod­ucts. You may lie on bed and use a tablet com­puter to click on prod­ucts you like, and the man­u­fac­tur­ers will pro­duce the prod­ucts tai­lored to your needs. This is a typ­i­cal hall­mark of new man­u­fac­tur­ing.

Con­sumers want to spend less and achieve more per­son­al­ized and high-qual­ity prod­ucts. This has posted a lot of new chal­lenges for the in­dus­try. “Com­pa­nies shall use the big data tech­nol­ogy to up­grade their busi­ness, im­prove the data trans­parency of the pro­duc­tion process to bet­ter sat­isfy con­sumers’ de­mands.” Sun Ron­glei, pro­fes­sor of Huazhong Univer­sity of Sci­ence and Tech­nol­ogy, said that the tai­lored and per­son­al­ized pro­duc­tion will be­come the trend of the man­u­fac­tur­ing in­dus­try.

Ac­cord­ing to ex­perts, dur­ing the era of new man­u­fac­tur­ing, the prod­ucts are fac­ing shorter life cy­cle and in­creas­ing diver­sity. This re­quires com­pa­nies to be more adapt­able to the chang­ing con­sump­tion needs. “To pro­mote tai­lored man­u­fac­tur­ing will deeply af­fect the whole in­dus­try. Those who fol­low the trend will sur­vive and those who don’t will be wiped out.” Sun Ron­glei warns that the com­pa­nies, the whole man­u­fac­tur­ing in­dus­try shall deeply un­der­stand the new trend and fea­tures of the man­u­fac­tur­ing in­dus­try. They shall put more in­vest­ment into re­search and devel­op­ment, an­a­lyze con­sumers’ needs and pain points, to seek the best so­lu­tions to such pain points. Mean­while, man­u­fac­tur­ing com­pa­nies shall be more open in shar­ing ex­pe­ri­ences, es­pe­cially pro­mot­ing in­te­gra­tion be­tween com­pa­nies and uni­ver­si­ties or re­search in­sti­tu­tions. The pur­pose is to achieve com­ple­men­tary ad­van­tages and pro­duce more prod­ucts.

The 2018 Re­port on the Work of Gov­ern­ment men­tioned that it shall use new tech­nol­ogy, new types of busi­ness and new busi­ness model to trans­form and up­grade tra­di­tional in­dus­tries. In the new round of com­pe­ti­tions, those pi­o­neers of in­no­va­tion will ac­cu­mu­late ad­van­tages. The devel­op­ment of in­for­ma­tional and smart tech­nol­ogy will cre­ate more op­por­tu­ni­ties for the in­dus­try up­grad­ing and tran­si­tion.

The emer­gence of new con­cepts like big data, cloud com­put­ing, In­ter­net of things and mo­bile in­ter­net is al­le­vi­at­ing the predica­ment of tra­di­tional man­u­fac­tur­ing com­pa­nies.

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