In recent years, the rapid and orderly development of hardware industry, but there are still problems in the development, on the whole, there are several major outstanding issues:

 

    First, the extensive mode of development have not completely changed, there is a device process backward, unstable product quality and other issues.

 

    More than 80 percent of enterprises rely on the transfer of rural surplus labor force, after the 1990s developed, low starting point, most devices are used equipment, some still coming out of the device, resulting in unstable product quality. Due to outdated equipment caused by mold and process backward, not only die life is short, defective rate, waste and so serious in operation.

 

    As the past few years of rising raw material and energy prices, the industry's profit margins are shrinking. Enterprises do not have a reasonable profit to maintain normal operation of enterprises have a problem, even unable to invest more funds for equipment and tooling investment, not only product quality can not be guaranteed, and low-tech products, the same phenomenon seriously, forming low price competition on price that even the blind expansion.

 

    Second, industry concentration is low, enterprise scale structure is irrational, resulting in economies of scale low.

 

    SMEs in the industry is still dominated, the market share of leading enterprises no absolute advantage, this small, multiple, weak, scattered corporate structure led to the Chinese enterprises in the international market is not high value-added products, weak competitiveness, economic inefficient situation.

 

    The current hardware manufacturers fundamental nature is a private enterprise, on medium and small enterprises, expand production scale has long been heavy, light and innovative, light science and technology funding; weight expansion, light lifting. Such as Zhejiang province as metal products, in 2010 the province over the size of more than 3,000 hardware manufacturers, investment in science and technology funds accounted for only 0.67% of total sales, compared with 2 percent of research funding in developed countries, the gap very poor. Blind pursuit of quantity expansion to seize the market, do not focus on product development, enhance the quality do not go up, only to repeat the production of low-end products.

 

    Production presents obvious geographical characteristics, "get together" phenomenon is more prominent, the development of spontaneous blindness brought investment and redundant construction. The majority of hardware manufacturers and the presence of the characteristics of small-scale enterprises, weak anti-risk capability.

 

    Personnel structure is irrational, resulting in insufficient capacity for sustained development. Hardware manufacturers are still labor-intensive as the main body, with the expansion of business scale, improve the technological level and the level of modern equipment, improve the difficulty and requirements, enterprises need a variety of senior technical staff, operational staff and management personnel, and in this regard lack of personnel constraints to enterprise development, resulting in lack of development potential. Many SMEs are developed from a family workshop, are family members of management, cronyism phenomenon largely affected the efficiency of enterprises.

 

    Third, the product homogeneity is outstanding, low-end surplus of products, lack of high-end products. Enterprises in the industrial division of the low profit sectors, and the challenges of domestic and international markets.

 

    A wide range of hardware products, but has been consistently high proportion of low-end products. The proportion of low-end products, the production is concentrated in industry leading enterprises. Low-end products, excess capacity, aggravated disorderly price competition in the domestic market of the same industry, lead to a substantial decline in corporate profits, while high-end market is basically dominated by foreign products.

 

    Industry proportion of exports accounted for about 40% -50%, product homogeneity and inexpensive tendency is obvious. In the division of labor in the international market in low-end products, the competitiveness of not only low, easily lead to trade friction, and are subject to change once the international market, will bring relatively large risk of developing the industry.

 

    Since there is no brand, more than 90 percent of export products to OEM-based. For example, Zhejiang, tools, hardware, architectural hardware, locks, stainless steel mug, scissors, zippers and other products export volume in the first country, the quality of some products have been close to the level of developed countries. But OEM product chain development in low-profit sectors. Even OEM and developed countries there is a huge price gap, as the same as the US OEM ZIPPO lighters, Wenzhou OEM price is $ 1, and the Japanese OEM price is $ 10.

 

    Since the three-point line of OEM way, resulting in existence of the business orders, production and delivery of this simple and passive export model, do not understand the end-market demand, resulting in the production of passive and inefficient, the financial crisis has brought a new outlet weak market problems. In opening up the domestic market, but also channel investment and construction experience and the brand did not influence other issues.