More opportunities than challenges in the Chinese ceramic industry

As a subsector of the home decorative products industry, the ceramic industry has kept a low profile in China. But now its status in the general decorative market is gradually increasing. Whether viewed from the perspective of staff quality, managerial mindset, management practices, or operational processes, the ceramic industry in China is promising. Increasing pressures from environmental regulations, fierce market competition, and the rising RMB have not dampened the vitality of the Chinese ceramic industry.

Improve the quality of management

Since the 1990s, the boom in domestic and international demand for ceramics had led to the development of some large-scale ceramic companies, which in turn had given rise to some quasi-professional talents in the ceramic industry. The rapid development of China’s electronics industry in recent years is partly due to its effective cultivation of a large number of management talents, so the ceramic industry is willing to keep pace to improve the quality of its own endowment. of staff, by hiring management talent from other successful industries. .

That said, there are still many family businesses in the Chinese ceramic industry, and the widespread nepotism among these companies will undoubtedly limit their long-term development. Although some family businesses are beginning to appreciate the importance of professional managers, trust between them is still lacking. It is not unusual to see the boss flush an entire management in this industry. The key to this problem is probably not whether a business is family owned or not, but whether the owner has the conscience to employ modern management philosophies and methodologies to run the business.

Advanced production techniques

Today, China’s ceramic production has been quite modernized and industrialized, and the degree of automation is also increasing. Although management practices and company cultures may differ between provinces, the use of technologies and production processes are quite similar between companies. This has inevitably led to homogeneity between product styles, with high-volume but low-differentiation products on the market. The high volume could certainly bring price advantages to China’s ceramic exports, but they have also attracted a considerable level of anti-dumping criticism from other countries. Many Chinese ceramics are sold as OEM products for foreign brands without origin labels. Otherwise, many imported Chinese consumers will likely find that their TOTO toiletries at home are actually “Made in China”.

Therefore, some industry experts have pointed out that while the manufacturing processes are quite good now, the Chinese ceramic industry still lacks a brand and marketing mindset. On a positive note, some companies have realized the importance of international management and innovation and have started to test new management and operating models.

Innovative thinking and design remain weaknesses

Imitation products are rampant in China’s decorative products industry. Many Chinese ceramic companies are good and fast at copying products, and this is the reason why Chinese ceramic representatives are not welcome at some international trade shows. While Chinese companies can make perfect knockoff products, many of them are lacking in innovative ideas and design work. Dr. Zhang Mengyou, CEO of Eagle Brand Holdings, a Singapore-listed Chinese ceramic company, commented that in addition to technological and manufacturing developments, Chinese ceramic companies should also pay attention to marketing innovation. He said that comprehensive marketing awareness is not about planning a single campaign or event, but about mobilizing the entire staff of the organization to achieve marketing innovations all the time, hence a qualitative leap from “Made in China” to ” Created in China “.

Pollution problems

Compared to other decorative products such as flooring, furniture and lighting, the Chinese ceramic industry now faces more environmental pressures and controversies in an already competitive market. The energy efficiency measures recently introduced by the central government will undoubtedly lead to stricter environmental requirements for ceramic companies in most provinces. Whether environmental problems can be adequately resolved is not only the key to a ceramic company’s compatibility with its local environment and resources, but also an important measure of a company’s social responsibility in the community.

Low industrial concentration

Compared with many other overseas ceramic tile or sanitary ware industries, the Chinese ceramic sanitary ware industry still does not have a dominant brand in the market, and this is also reflected in the entire decorative products industry. There are some larger companies, but there have been no real leaders. Although many large companies have established sales networks nationwide, their competitive advantages are often contained in their home regions. Therefore, the Chinese ceramic industry is asking for more brand influences.

On the other hand, the need for improvements and consolidations can also mean opportunities and prospects. For those decorative product companies trying to build their brands, or those pioneers who have benefited from the capital markets boom, they certainly have the potential to get bigger and stronger. The relocation and restructuring of provincial ceramic industries and the rise of regional brands will undoubtedly intensify market competition in certain regional markets. Despite their differences in brand positioning and target customers, the rise of regional brands is likely to have a significant impact on the Chinese ceramic industry in the near future.

conclusion

The ceramic industry may not be your typical dawn industry, but it still has many opportunities ahead. The strong demand for ceramic products in China, as a result of the general economic development and positive real estate demand, has presented an unprecedented opportunity for the ceramic industry. From a macro point of view, there is still considerable room for growth for Chinese household decorative consumptions, and the country’s demographic mix also points to a peak period for family establishments and associated consumptions. The trend of using more fashionable and niche decorative products in China is also generating great potential for the ceramic industry. Therefore, it can be reasonably concluded that although there are certain problems, we should remain optimistic about the prospects for the ceramic industry in China.

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