China Relay Market Overview

In 2011, the overall economic situation in China presented the distinctive feature of “high prices, high growth, and high inflation”. The CPI index in the consumer sector continued to hit a new high, and the purchase price of industrial production PPI also remained high for a long period of time. The growth rate of the general industrial relay market Continuing the high growth rate in 2010, which recorded a year-on-year growth rate of 15.0%, the industrial general relay market reached 621 million yuan.

In 2011, the industrial general relay set a new high market scale for deep-seated reasons.

Relays, especially industrial general purpose relays, are the most common types of relays and are widely used in various fields of the national economy. Including construction, transportation, energy, industry and other applications that have safety, time, and monitoring relay products, all field relays with automatic control are essential.

The obvious feature of China's economic development in 2011 was that the economic growth rate in the western region was significantly improved, the urbanization and industrialization process in the second and third tier areas was accelerating, and various types of infrastructure projects increased significantly. The demand for all types of industrial general relays, for example, had increased significantly. In addition, China's affordable housing projects and commercial real estate still have a large contribution to the growth of the construction industry; the government has strict control over the prices of residential real estate, but the number of affordable housing starts has continued to increase, and some large-scale public construction projects benefit people's livelihood. Both have stimulated the development of the industrial electrical appliance market.

The average industrial product price in the industrial general relay market was raised by 5% to 10% in 2011. Under the premise of increasing demand, the increase in price played an important role in boosting sales. The main reasons for price increase were rising labor costs and upstream raw material prices. Rising, which can be confirmed by the increase in the annual PPI index.

In the industrial general relay market, due to relatively easy technology implementation, the market entry threshold has been reduced, and the number of suppliers has gradually increased. Many suppliers who started with low-voltage power distribution products have been actively conducting R&D and production of industrial general relays in recent years.

In 2011, Pilz was still the market leader in the general industrial relay market. The growth rate of Chint's general-purpose relays in the industry is strong. This is mainly due to the fact that Chint is a major domestic brand and is committed to years of deep plowing in low-voltage power distribution products such as industrial general relays. Moreover, CHINT is focusing on new product development and market opportunities. better. In addition, many domestic brands such as Xinling, Delixi, etc. also occupy a place in the industrial general relay market.

The main players in the industry's general relay market sales channels are distributors, OEMs, and complete sets of disk cabinets. In addition, system integrators have a certain amount of say in selecting and purchasing decisions for general industrial relays.

From the manufacturer's end point of view, due to the relatively simple working principle of industrial control electrical products, installation and application are also more convenient, and can be used directly. Most manufacturers are sold through distributors. International brands such as Pilz, Schneider, and domestic brands such as Xinling and Chint are one of the most important factors for success in the IPC market is its strong channel network. Chint has more than 1,000 distributors nationwide, Schneider has more than 800 distributors, and ABB also has more than 300 distributors.

From the user's perspective, users in the building and industrial sectors are mainly sourcing from the disk cabinet plant; the industrial project construction mainly depends on the success of the system integrator project for relay product selection; most of the OEM market users purchase separately. The main products of relay products, there are also some users of the industry, such as lifting equipment, textile machinery and other industries, will purchase low-voltage cabinets from the cabinet factory.

Judging from the brand decision-making power, there is also an important role - system integrators, especially design institutes in industries such as metallurgy, glass, ceramics, and mining, which have strong influence when users choose brands. Although the cabinet factory cannot make the final purchase decision, in the selection process, the cabinet factory can influence the buyer according to their own experience. And for some panel companies with strong professional influence, end-users will no longer be involved in the selection of components inside the cabinet because of their trust in their own brands.

Generally speaking, suppliers mainly rely on the power of distribution and direct sales to sell products. For different products, suppliers rely on different distribution and direct sales forces.

Industrial general-purpose relays are characterized by their small size and simple principle, which determine that most industrial general-purpose relay products are sold through agents. In the industrial general relay market, most relatively simple products have relatively simple requirements, and customers can use them directly without the need of third party guidance. Customers usually only purchase through the channel vendors. Some customers have their own matching cabinet factories. Electrical engineers usually only need to issue drawings and specify brands, which are purchased and installed by the cabinet factory.

Whether it is Schneider or ABB, whether it is the local company Chint or Delixi, one of the important factors for the success of the relay market in China's industry is the success of the channel network.

Product and technology trends

1) Intelligence, composition, and modularization. Industrial electrical appliances will present a trend of intelligence, complete set and composition. In order to be used in conjunction with a computer monitoring system, industrial general-purpose relays are required to have functions of display, memory, test, self-diagnosis, and alarm.

2) In order to follow the pace of the market, the mainstream suppliers, especially Pilz, Schneider, and other new products are updated very quickly. Industrial general-purpose relays represent the industry's general relay products can be said that the industrial control market "fast consumer goods." Continuous innovation, to meet the new needs of customers, can occupy market opportunities.

Price trend

1) Generally, the industrial general relay companies in the industry have formulated their own price strategies and incentive mechanisms. Compared with foreign companies, domestic companies have more mature and perfect incentive mechanisms and have greater protection for channel providers.

2) The price of foreign companies through some sole proprietorship companies or joint venture companies established in the country is often higher than the price of domestically produced products. In the past two years, some large foreign companies have reduced their prices in order to squeeze the domestic industry's general relay market, but the price cuts are not too large.

3) The price competition for industrial general-purpose relays is fierce. The formation of the buyer’s market is oversupply. Compared with other automated control products, the price of industrial general-purpose relays is low, basically relying on volume, and price competition leads to a decline in profits.

4) The industrial general relay market conducted a price adjustment in 2011 as a whole, mainly because of the increase in labor costs and raw material prices. In order to promote sales under the conditions of economic crisis, the mainstream companies in the industry adjusted the incentive mechanism for channel providers.

5) The price protection policies for important projects and the reasonable price control strategies for the channels have increasingly become the key to the success or failure of the industrial general relay business.

Service trend

From the point of view of industrial general-purpose relays, the concept of service is usually to improve logistics efficiency due to the simple products. Delivery time is a very important point for customers. Therefore, it is advantageous for some enterprises that have established foreign factories and logistics systems in their factories.

Emerging markets and trends

Industrial general relay products are widely used in various fields of the national economy due to the special nature of their products. Including the project market: metallurgy, electric power, petrochemicals, transmission and distribution, building and other project markets, while in the OEM market, such as textile machinery, rubber machinery, lifting machinery, each stand-alone equipment has industrial general-purpose relay applications.

In the second half of 2011, the major industries were affected by tightening control policies and the growth rate slowed down. Industrial general relays and other low-voltage power distribution equipment have reduced demand. It is expected that the downside risk of the economic situation will increase in the future, the number of industrial projects will decrease, and the demand for various kinds of automation equipment OEMs will decrease, the new real estate operating rate will be poor, and the risk of shrinking market capacity will be higher.

At present, the domestic new energy industry has developed rapidly in the past few years, for example, in wind power, solar energy, etc., but at present there is an overexpansion period and the development speed is slowing down. The number of new projects is decreasing, and the demand for industrial general relays is likely to increase in the future. cut back.

In 2011, the state continued to regulate and control the real estate industry, and the development of the construction industry slowed down. Product selection will also select some domestic products with high cost performance ratio. Safe housing and large-scale infrastructure projects such as office buildings, government offices, hospitals, schools, etc. will be the fast-growing industry in the future.

Challenges for Future Development of China's Industrial General Relay Market

1) Industrial general relay market After 20 years of development, industrial general relay enterprise clusters are mainly distributed in Beijing, Tianjin, Liaoning, Shanghai, Jiangsu and Zhejiang. From the perspective of business size. Most companies are small in scale and lack the competitive strength and advantages. At present, China's low-voltage electrical enterprises enter the country's large-scale enterprises are few, and SMEs account for more than 90% (the annual sales revenue and total assets of 100 million yuan and above for large-scale enterprises; 50 million yuan and above for the medium-sized Enterprises, the rest are small businesses.

2) The industrial control electrical products are in the same pattern as the medium and high voltage electrical appliances, and the three major competitors, privately-owned, state-owned enterprises and joint ventures, have formed a competitive situation. In the low-voltage electrical industry, the dominant position of private enterprises seems to be increasingly prominent, but overall, the technology content is relatively low, once the foreign companies through the merger and localization model, will seriously impact the domestic industrial electrical market control.

3) China's industrial general-purpose relay products have low production costs. This is a favorable factor for exports. However, at this stage, product quality is not uniform, and it is not in line with international practices and is not conducive to the export of China's industrial general relay products. China's accession to the WTO has created macroscopic favorable conditions for Chinese enterprises to open the international market. However, domestic enterprises must adapt to relevant international standards and policies as soon as possible and learn to study the situation in the entire international market. In addition, through the export of complete sets of products, the accelerated development of new products and the production of internationally recognized products are also measures that can be taken by domestic industrial general relay companies.