In recent years, the hardware and sanitary ware industry in China has faced significant challenges, marked by declining sales and profits. According to data from the China Building Sanitary Ceramics Association, while building ceramics companies saw a 2.93% increase in sales in 2012, the sanitary ceramics sector experienced a 3.08% decline, and the hardware and sanitary ware segment only managed a modest 0.27% growth. Meanwhile, profit growth for building ceramics rose by 8.31%, whereas sanitary ceramics dropped by 5.55%, and hardware and sanitary ware suffered a sharp 25.43% decline in profit. This dramatic drop suggests that the performance of this sector is far from normal.
Industry insiders note that while the entire sanitary ware market is in decline, the hardware and bathroom segment stands out as particularly weak. During interviews with several hardware companies, representatives expressed concerns about the difficult business environment. One manager stated, “Last year was tough, but this year might be even worse.†As sales of bathroom products fall, the decline in profits for hardware and sanitary goods is even more severe than other segments, leading experts to predict that the market is becoming saturated.
Export markets have also played a key role in the sector’s struggles. In 2011, China's hardware export market, especially in North America and Japan, saw a rapid decline. By 2012, the U.S. accounted for 19.92% of China’s hardware and sanitary exports, while Japan fell out of the top ten. With reduced export opportunities, many companies shifted focus to the domestic market, intensifying competition and triggering a price war. This has led to lower margins and an overall decline in quality as some businesses resort to aggressive pricing strategies.
The recent "lead faucet" incident, which drew attention from foreign markets through media coverage, has further impacted exports. Some countries have increased inspections on heavy metal content in hardware and plumbing products, affecting export-oriented firms. At the same time, domestic sales are dominated by price cuts, with small workshops taking advantage of the situation to flood the market with low-quality, counterfeit goods. As one salesperson noted, “Price is the first thing customers think about, followed by quality and function.â€
Rising raw material costs have also added to the pressure on hardware and sanitary companies. Since 2010, the prices of key materials like copper and steel have surged, with copper rising by 32% within six months and reaching historically high levels. These increases have forced manufacturers to raise product prices, but market demand has not kept pace, resulting in shrinking profit margins. Many dealers now find themselves struggling to cover operational costs, with some even considering closing their stores.
As the market remains uncertain, large home improvement retailers have seen fewer hardware and bathroom outlets. Most stores remain idle, and some have even withdrawn from the market entirely. The combination of stagnant sales, rising costs, and intense competition has left the industry in a precarious position, with little sign of recovery in sight.
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