Analysis of the Competition and Development of China's Stationery Industry
Release time:
2018-04-12
The current state of China's stationery industry is: manufacturing enterprises are highly concentrated geographically, but market concentration is quite low, and product homogeneity is serious. Trends in the stationery industry's development: product consumption is trending toward personalization; sales are trending toward flattened channels and electronic commerce; the stationery industry's competitive model will evolve from competition between individual enterprises to competition across the entire supply chain, with manufacturers transforming into service providers.
The current state of China's stationery industry is: manufacturing enterprises are highly concentrated geographically, but market concentration is quite low, and product homogeneity is serious. Trends in the stationery industry development: product consumption is trending towards personalization; sales are trending towards flattened channels and electronic commerce; the stationery industry competition model will evolve from competition among individual enterprises to competition among the entire supply chain, with manufacturers transforming into service providers.
I. Market Capacity and Structure
The market capacity of China's stationery industry (excluding office equipment and furniture) is approximately 150 billion yuan, or US$21.5 billion. The global stationery market totals approximately US$250 billion, with China's stationery market accounting for 8.6% of the global total.
In the Chinese stationery market, office supplies account for 41%, approximately 61.5 billion yuan; file processing supplies account for 13%, approximately 19.5 billion yuan; writing tools account for 10%, approximately 15 billion yuan; notebooks and desktop supplies each account for 7%, both at 10.5 billion yuan; and teaching and student supplies account for 9%, approximately 13.5 billion yuan.
The consumption market for office stationery products in China is mainly concentrated in the economically developed coastal regions, with about 70% concentrated in the five regions of Guangdong, Zhejiang, Jiangsu, Shanghai, and Beijing. The specific distribution is as follows: Zhejiang 17.5%, Jiangsu 18%, Shanghai 7.80%, Beijing, Tianjin, and Hebei region 12.50%, Shandong and Henan 7.00%, Fujian and Anhui 5.80%, Hunan, Jiangxi, and Hubei region 5.50%, the three northeastern provinces 4.50%, and other regions 6.90%.
With a huge consumer base of 8 million enterprises, 200 million students, and government agencies at all levels, the Chinese stationery market has been growing rapidly at an average annual rate of 12% in recent years. It is expected that in the coming years, the Chinese stationery market will grow at an annual rate of 5%-10%, indicating a very broad prospect for the Chinese stationery consumption market.
II. Industry Characteristics
China's stationery industry chain has more than 100,000 upstream and downstream enterprises, including approximately 43,000 manufacturers, 30,000 suppliers, and 30,000 retail terminals. There are very few enterprises with sales exceeding 1 billion yuan, only 5 enterprises with sales exceeding 500 million yuan, and about 5% of enterprises with sales exceeding 10 million yuan, with about 10% of enterprises exceeding a certain scale. Of the more than 43,000 stationery manufacturing enterprises nationwide, 70% are concentrated in the three regions of Guangdong, Zhejiang, and Jiangsu.
China's stationery manufacturing enterprises are highly concentrated geographically, but market concentration is quite low. The total annual sales of the top ten stationery companies account for less than 10% of the total market value.
Ultimately, most Chinese stationery companies suffer from the following issues:
1. A large number of enterprises in the industry, concentrated geographically, and low market concentration
2. Low level of mechanization in production, a labor-intensive industry, and low industry profit margins.
3. Most Chinese stationery companies are export-processing enterprises, and have long relied on OEM processing for foreign companies and export sales, resulting in low product added value, weak technological innovation, and a lack of brand awareness.
III. Existing Problems in the Industry
1. Product homogeneity, excessive duplication of products leading to resource waste and excessive competition at a low level, resulting in low industry efficiency.
2. Lack of core technologies and inventions.
3. The manufacturing industry has long been centered on OEM, lacking awareness of technological innovation and brand innovation capabilities.
4. Lack of internationally influential brands.
IV. Industry Development Trends
1. Consumption Trends: Personalized, Fashionable, Multifunctional, and Low-Carbon Products
In a diversified social environment, consumer demand for stationery products will show personalized characteristics. 59% of distributors hope to highlight the individuality of products. More than 60% of respondents said they prefer to choose personalized and fashionable stationery.
From October 2008 to October 2009, the procurement of environmentally friendly office supplies increased by 63%. Among companies with annual sales exceeding US$1 billion, more than 53% consider office supplies when purchasing environmentally friendly products.
2. Sales Model Trends: Flattened Channels and Electronic Commerce
(1) Trend towards Flattened Channels
Flattening means reducing the number of channel levels and distributors, and developing more direct sales channels, including direct sales to retailers (direct supply to modern retail chains) and direct sales to consumers (such as e-commerce, directly-operated stores, and direct sales), aiming to strengthen control over retail terminals and better understand consumer needs.
The most significant characteristics of flattened sales channels are: firstly, channel direct operation; secondly, short and wide channels.
(2) E-commerce Trend
The number of Internet users in China has exceeded 384 million, with 60 million current online shoppers, accounting for only 25% of Internet users. In contrast, this figure is 57.3% in South Korea and 66% in the United States, indicating that China has a huge and even more astonishing online shopping population.
Based on the attributes of channel owners, e-commerce can be divided into three types: retailer e-commerce, manufacturer e-commerce, and online retail (i.e., independently operated e-commerce by third parties).
Retailer e-commerce: In the past few years, retail enterprises have been trying out online sales. Data shows that among the top 100 retail enterprises in China in 2009, 31 have already launched online businesses, with nearly one-third of these enterprises opening online businesses in 2009 or early 2010. However, these retail enterprises are mostly in the cautious initial stage, and online businesses have not yet reached scale, accounting for a small proportion of overall sales revenue.
Manufacturer e-commerce: Manufacturers have also launched online sales platforms in recent years, with explosive growth in the past two years.
Online retailers: Online retail is independently owned and operated online by third parties, including B2C and C2C businesses. From 2006 to 2008, the compound annual growth rate of the overall sales scale of China's B2C business is estimated to be 50%, and it has become an important sales channel.
(3) Industry Trend: Competition and Cooperation, Concentration, and Supply Chain Competition
The phenomenon of competition and cooperation is a natural product of economic development to a certain stage, and it is also the ultimate result of competition to a certain extent. Competition and cooperation start from the perspective of multiple wins, and through the use of everyone's technology, capital, and channels to jointly build a powerful new platform, it represents the requirements of technological development and market order standardization, and has become the highest stage of competition in the stationery industry.
With the development of the industry, the trend of competition and cooperation is intensifying, and the industry will inevitably move towards concentration. In the process of industry concentration, three major camps have the possibility of monopolizing the Chinese stationery market: international stationery giants, regional stationery chain organizations, and leading manufacturers of single products. These three major camps each have their own advantages, but they also face different challenges.
The competitive landscape of the stationery industry will evolve from competition among individual companies to competition across the entire supply chain. Manufacturers will transform into service providers. The development trend of the stationery industry will lead to a transformation in production methods, increased mechanization, enhanced enterprise specialization, and increasingly close industry cooperation. The inevitable result of this is a change in the competitive landscape. The stationery industry will evolve from competition among countless small and medium-sized manufacturers to competition among large stationery suppliers, or even the entire stationery supply chain. Stationery manufacturers focusing only on a small niche will be at a disadvantage in the competition and will be replaced by a few suppliers who can provide a full range of products and services. One-stop service providers, with their advantages of full product range, one-stop service, flat structure, zero lead time, and low risk, will be widely welcomed by customers of various business types.
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