As one of the two pillar applications of the electronic paper industry, electronic paper price tags will ship more than 280 million units in 2022, accounting for 56% of the total electronic paper market share, and the compound annual growth rate of more than 50% in the past five years, which has begun to cross the threshold from 0 to 1 and enter the high-speed growth period, so that more and more end customers begin to recognize the value of electronic paper price tags. With stable growth prospects. In general, this category has a higher penetration rate in overseas mature markets, and the market is not large enough in the domestic market due to the difference in business formats.
The quarter think tank believes that China’s manufacturing out of the sea is not only a required action to increase sales, but a transformation opportunity that can be seized by the mainstream manufacturing industry, between the fluctuations of global supply chain restructuring, relying on “industrial genes + scene innovation + consulting services” to enhance the position, establish brand awareness in overseas industry circles, in order to avoid the recurrence of low-quality and low-price volumes.
This article contains 6558 words and takes about 17 minutes to read The author is | Wei Li Editing by | Xixi Sun “Go out or go out” has become the latest buzzword in the tech industry. However, for China’s manufacturing industry, the whole machine products to go to sea is not a new thing: from the “made in China” electronic integration foundry, to the independent brands of Huawei Xiaomi, and now the industrial chain cluster to go to sea – the process of Chinese manufacturing transformation intelligent manufacturing, the integration with overseas markets is becoming more profound and diversified. The electronic paper industry, as a fresh case, is showing an ecological panorama of the industrial chain entering the sea and then going to the sea from far and near.
Time to move forward, from the launch of Amazon’s first Kindle reader many years ago to the new concept color-changing BMW Dee BMW model that preembes the hot topic of the week during the 2023 CES, it is actually the electronic paper (ePaper) technology that is constantly iterating. Compared with traditional paper, its display information can be transformed, adding intelligent elements to the information display; Compared with the luminous screen, energy saving, eye protection, and no wiring are the biggest alternative highlights of electronic paper.
The technology has gone through quite a few twists and turns in the commercial process: First of all, the concept of electronic paper technology was proposed in 1975, and after more than 20 years of basic research and development, it was only in 1995 by a laboratory of Massachusetts Institute of Technology in the United States to produce a prototype product, and in 1997, E Ink began to commercialize the road, and in 2009 was acquired by a Taiwan paper giant Yongfengyu. It was later merged into its well-known subsidiary Yuan Pacific Technology (retained the English name E Ink). And is promoting the industrial layout of electronic paper in various application fields of smart things.
This development process is almost the epitome of the process of China’s electronics manufacturing industry after the reform and opening up. On the other hand, electronic paper takes advantage of the industrial digitalization in the Internet of Things era and has become an alternative emerging technology similar to new energy technology, and is currently in the exploration stage of developing scenario-based applications. Mainland Chinese technology companies are playing an increasingly important role in the “scene innovation and commercial expansion” of these emerging technologies, and are more likely to lead international innovation and achieve industrial transformation. At this stage, on the topic of scientific and technological manufacturing going to sea, the electronic paper industry continues to reflect its typical characteristics: This makes the electronic paper industry naturally more necessary to go to sea, and can also allow Chinese manufacturing enterprises at different stages to find their own shadow. The story of this time to go to sea is different from the product path represented by “made in China” decades ago: from single OEM, to accessory integration, to domestic manufacturers taking the initiative to export various ecological scenarios and business models. Yuan Tai Technology, the first manufacturer of upstream electronic paper material technology innovation, has released a bold statement: “To set aside ten years for ecological innovation.” Many similar technology research and development have experienced industrial exploration stories such as electronic paper, and the essence behind it is that every basic research and development topic with breakthrough innovation must find the golden key of the “killer” application in the commercial scene, and then give birth to the innovation ecology and scene, and continue to integrate and change real life. Nowadays, backed by the trillion-level market, developed network facilities, and the popularity of intelligent applications, Chinese mainland supply chain manufacturers are becoming a new force for integrating an innovative technology into thousands of industries around the world and becoming useful and easy to use.
This has become a new identity of China’s “intelligent manufacturing to the sea”. For example, under the joint promotion of the Electronic Paper Industry Alliance (EPIA) and the industry’s leading companies, the electronic paper industry is spawning a new stage and new phenomenon of clustering: Large, medium and small-scale industry manufacturers are trying to gradually transition from selling intelligent hardware such as electronic paper display modules and electronic paper price tags to scene innovation, solution integration, customized services, one-stop operation and maintenance services, etc., through more complete, more front-end and deeper integrated business operations, systematic integrated innovation and more industrial application endorsement. To integrate and achieve industrial value-added, and promote application iterations in overseas markets.
For example, Hanshuo Technology, a retail technology manufacturer that has long been deployed to the sea and achieved considerable results, is a more successful case in the process of going to sea in the electronic paper industry. The information shows that Hanshuo Technology currently provides products and services to more than 50 countries and regions around the world.
This also seems to imply another metaphor of market disruption geopolitics under the transformation of the global supply chain pattern: technology sources have national borders, but application innovation has no borders, and in the process of improving the business model, integration capability, and scene ecology of technology matching, there is a half-step of the transformation and upgrading of China’s manufacturing industry and the low carbon digital transformation blue ocean that has penetrated into the global market. In this sea area, the application of technology is facing the possibility of innovation, and the proposition has gradually changed from manufacturing or product import and export itself to higher value-added business models and service exports. Such a soft thinking transformation, can the domestic manufacturing industry steadily catch? — The quarter believes that it depends on whether Chinese enterprises can take the advantage of production capacity to the advantage of service capability, expand the new space for value-added innovation applications, and even establish a global industrial chain awareness from scratch, and promote the market education of technology trends such as the Internet of things to industrial applications, and accelerate the process of digital innovation in mature markets such as Europe and the United States. 01 Escape the inner coil, group out to sea
The quarter think tank learned in the survey that after the epidemic, especially into 2023, upstream and downstream enterprises in different links of the electronic paper industry are starting or deepening their own process of going to sea. The driving force of the industry to go to sea is chosen to break out at this time, first of all, because there are many head enterprises in the industry circle with the excellent performance of the sea pioneer has played a model role: Xingtai Yingke is good at shipping electronic paper modules and display solutions; Hanshuo Technology is good at retail electronic price tags and related digital solutions; Boe will invest in overseas related industries, and has acquired French electronic price tag company SES to carry out global layout in the electronic paper field. According to ePaper Insight, the global electronic price tag (ESL) machine market will grow to about $3 billion by 2025, and said that “the expansion of more and more consumer electronics applications is one of the reasons for the rapid growth of the e-paper market”; Li Zhenghao, chairman of Yuan Tai Technology, said in a speech at the world Economic Forum in July this year: electronic price tags account for less than 10% of the global overall retail label market, especially to catch up with the global high inflation, the retail industry continues to adjust product prices, high human costs, and electronic labels have a lot of room for growth.
As one of the two pillar applications of the electronic paper industry, electronic paper price tags will ship more than 280 million units in 2022, accounting for 56% of the total electronic paper market share, and the compound annual growth rate of more than 50% in the past five years, which has begun to cross the threshold from 0 to 1 and enter the high-speed growth period, so that more and more end customers begin to recognize the value of electronic paper price tags. With stable growth prospects. In general, this category has a higher penetration rate in overseas mature markets, and the market is not large enough in the domestic market due to the difference in business formats. At present, the current domestic electronic paper price tag solution providers have been temporarily involved in the whirlpool of the price war. According to the quarter think tank, some domestic electronic price tag project bidding selected the rule of unlimited bidding, the price lower limit in the bidding process is constantly depressed, and the cost of giving up the deposit after the final bid is far lower than the loss of completing the project. Therefore, like mobile phones, wind power, and new energy industries, escaping from internal volume is also a direct driving force for e-paper companies to actively expand overseas markets in 2023. The idea of the manufacturers is very simple: “Even if the overseas market is difficult, it can be more fierce than the domestic competition?” Come on, let’s roll the people outside.”
“Electronic price tags have been rolled up to deviate from normal in China, and the same is generally true in other industries.” Zuo Qiang, secretary-general of the electronic paper Industry Alliance, said that overseas markets have become the common destination of electronic paper price tag solutions for three reasons: First, as far as the electronic paper industry is concerned, the advantages of domestic industrial agglomeration still exist, which can make up for the lack of mid-end production capacity or hardware support for overseas customers; Second, overseas markets pay more attention to the long-term value of inputs and can maintain a certain space and profit margin. For example, in the application of retail electronic price tags, Europe is relatively more mature and has wider acceptance, and the market and customer education costs are low. Third, although the volume of overseas markets is vast, the threshold requirements for enterprises to go to sea are not low, in other words, having the ability to go to sea is itself a barrier to competition. Specific to the market segments, Europe, as the preferred destination for electronic price tag companies to go to sea, puts special emphasis on the concept of green and sustainable, so that electronic paper products with low-carbon, energy-saving and alternative paper characteristics have more potential demand; The United States is a potential market that has not been fully developed, and its developed retail industry still uses a large number of paper price tags, helping to reduce costs and increase efficiency and a more vivid marketing form is the source of attraction of electronic price tags for American retail enterprises.
For electronic paper price tag solutions at the sea at this stage, although the industry’s leading enterprises have won many large customers in Europe, the United States, and Australia, there are many small and medium-sized customers in these markets with potential demand for digital transformation – and let small and medium-sized retailers around the world use it faster, which is the greater opportunity the industry is currently facing. “The digitalization of the entire global retail industry is an inevitable process, and small and medium-sized retailers are still slowly accepting and transforming.” Xingtai Yingke general manager Xiao Xuming said. In addition, for emerging technologies and industries such as electronic paper, going to sea is not only to expand sales in the existing electronic paper price tags and e-book readers, handwritten books and other pillar scenarios, but more importantly, to develop more pillar application scenarios. This is bound to be a long-term process that requires a lot of resources and continuous verification. The key to breaking the situation is to give full play to the current cluster advantages of China’s manufacturing industry, which can be jointly led by industrial organizations on related topics, and enterprises from upstream and downstream of the industrial chain can participate in the group to jointly promote innovation and jointly bear risks. “There must be someone in the market first, and there are companies like Yuantai Technology that can push the concept out.” Then it will enter the stage of marketing and application promotion, to provide customers with a more sustainable service, which is not a company can do.” Xiao Xu name analysis way. Yuan-tai Technology, which has mastered the core technology of electronic paper, is also promoting the innovative application scenario of the entire industry in a 10-year cycle. 02 From selling hardware to selling power
Relying on the flexible supply chain, the industrial cluster will have stronger comprehensive service capabilities, help overseas customers reduce internal friction in the communication process, make services and products more flexible, and meet more personalized needs. On this basis, this clustered capacity output will become the basis for e-paper related enterprises to further enhance the global value chain position from selling products to selling services. This is a proven and valid path. Taiwanese sensor manufacturer Huanda Technology’s gross margin for standardized products in 2022 is between 55% and 60%, and the gross margin for customized products is more than 70%, higher than TSMC’s 56% in the first quarter of 2023. “Big factories despise, small factories can not come” personalized business is the key to Huanda technology to do one point. And do a good job of personalized service, product ability, industry konw-how, customer trust three indispensable. “We will divide innovation into two types, one is the original innovation of technology, and the other is the applied innovation. More technology-based innovations like core materials will occur overseas. For example, BMW’s color-changing clothing is not only a simple application of innovation, there are many original innovations in the process. Most domestic enterprises are better at technology application innovation based on the Internet of Things, such as e-paper card, e-paper bedside card, etc.” Zuo Qiang said.
From the perspective of the competitive situation of the electronic price tag industry, Hanshuo Technology can become the second largest company in the world in terms of electronic price tag revenue, an important reason is that it has invested more resources in research and development, and thus has certain innovative advantages in product performance. In the e-paper industry Alliance’s vision, the e-paper industry can form a virtuous cycle: E-paper enterprises take advantage of China’s high activity in the field of Internet of Things applications, try and develop more demand scenarios for e-paper in the domestic market, form different solutions, and then push it to more overseas markets or connect the hardware with overseas system integrators, with the increase of overseas markets to promote technology maturity and price decline, and then reverse pull the popularity of the domestic market. At present, to sell electronic paper solutions from domestic manufacturers overseas, and even rely on the advantages of industrial clusters to develop solutions directly for overseas markets, improve added value, you need to have a deeper insight into the target market, and promote the localization of various solutions in overseas markets through the continuous accumulation of industry know-how. At this point, Chinese manufacturing chain enterprises may need to be more active and smarter to integrate into the local industrial chain, and jointly promote scene innovation and program landing with upstream and downstream enterprises.
This requires each enterprise to find its own industrial chain role positioning, but also to do a good job of cross-field global market research, so that scene innovation in overseas become a true proposition. How do you find your place? Xiao Xuming said: “The iot solution is a productivity tool that reduces costs and increases efficiency, and we are laying the infrastructure for the iot solution. We need to be like companies like Bosch, where each company focuses on its core business and is open to collaboration to scale the industry together.” How to identify the overseas innovation scene? — There is a senior product person in charge of the industry said: “You can visit the local industry exhibition, touch the situation of local solution manufacturers, and find out whether our domestic market is making a big scene, and whether it is really needed in other people’s market?” For example, the domestic education market is suitable for expanding electronic paper exercise books, and overseas may not be able to introduce the same effect at this stage.” Taking Hanshuo Technology as an example, this manufacturer focusing on retail digital solution innovation pays great attention to the industry pain points and localization details in each different regional market, and deeply estimates the characteristics of the application needs of local retail stores in order to adjust the corresponding digital solution strategy. For example, Hanshuo’s DIY retail scenario application in the European region is focused on the needs of European consumers to buy various consumables in large home improvement stores, providing targeted solutions to enhance the connection between stores and consumers, and improving store efficiency with more digital and intelligent tools and solutions; At the same time, for the regional style of North American retailers who pay more attention to personalized marketing, Hanshuo also provides a variety of smart store marketing programs for local customers to choose. There is no need to deny that the current complex and changing global economic environment has always brought new opportunities and challenges to all technology manufacturers: affected by the future global market expectations, large customers may consider high-end products and services with more cost-effective mid-range products and services when making choices. Compared with other foreign enterprises, the more flexible Chinese manufacturing industry will be easier to advance from the low-end to the mid-end, corresponding to the mature market customers from high-end to mid-end procurement transition to complete the upgrading of the global value chain position. 03 Shape long-term brand power to advance layout
Another key to seizing this opportunity is to build greater trust with upstream and downstream companies overseas. In the process of going to sea in the electronic paper industry, we will encounter this lack of trust between customers. Especially from the hardware base layer into the software management, when it comes to data security, Chinese enterprises are often difficult to be recognized and obtain more profitable value-added revenue outside of hardware. Awareness and transparency influence the establishment of trust. The advantage of selling hardware is that the enterprise is oriented to the head solution provider, the concentration of customers is high, and the two sides can directly carry out point-to-point communication. Companies that sell services or even take the initiative to develop demand have a vague understanding of overseas customer groups and often cannot find out who the demand side is. At the same time, it is difficult for overseas customers to obtain more detailed information about manufacturing chain enterprises, resulting in a lack of transparency in inter-industry communication.
The exhibition has always been the most traditional, most effective, and almost the only way for many electronic solutions to reach potential customers. However, the exhibition is always temporary and can only play a nodal role in external communication. After the end of the exhibition, how to promote and efficiently establish long-term global brand communication, and solidified the innovation ability of solutions as their core brand labels in the upstream and downstream industrial chain is a long-term problem that relevant overseas enterprises need to think about. From the point of view of some of the earlier layout of the head of the sea, overseas can indeed allow some enterprises to escape the internal volume of the domestic market in the short term, but in the long term, the establishment of “intelligent brand”, get rid of the “factory” label, is to help every enterprise that wants to, will soon, has gone to sea to win the trust of overseas customers, faster increase the premium threshold and expand the key elements of cooperation. Based on this understanding, Zuoqiang’s e-paper industry alliance is trying to promote more member enterprises to take the initiative to carry out brand building and strategic layout in advance for overseas markets. In Xiao Xuming’s eyes: in the future, there will be classic manufacturing brands like Bosch in China, becoming an industrial brain with technical accumulation and cultural care, advancing with The Times, and establishing a deeper reputation and brand power in the global supply chain. However, at present, the industry group is still taking the first step to go to sea. “We realized earlier that the enterprises facing the sea is not only the financial dilemma, but also the ability dilemma.” Many member companies do not have the ability to do this thing in three or five years, do not know how to go to sea, and may not start this thing. We hope to empower the entire industrial cluster through the platform, so that more companies have the ability to go to sea in advance.” Zuo Qiang said. According to the past research of the Quarter think tank team, the key elements supporting global brand building include not only the basic product force, but also the four dimensions of organization, communication, values, and authenticity. E-paper Industry Alliance is currently guiding application innovation, building overseas media matrix, organizing overseas exhibitors, building overseas ecological network and other actions, in product innovation, overseas communication and other capabilities to provide help for e-paper related enterprises to go overseas. At the same time, supply chain enterprises themselves also need to invest in the manpower and resources related to the sea for advance layout and comprehensive planning. From the experience of the industry’s leading offshore enterprises, Hanshuo Technology has established localization teams in Europe, North America and Australia to accelerate integration into overseas markets and ecology, and deeply cultivate and tap the latest local needs; In terms of long-term brand building, it is also at the forefront of the industrial group. By investing a lot of organizational resources, it has established a set of cross-cultural customized marketing strategies and green ecological strategies for different regional markets, and has carried out a more comprehensive international brand building in multiple dimensions such as product innovation, organizational innovation, team building, community care and enterprise ESG.
The electronic paper industry is a microcosm of China’s manufacturing industry to participate in the process of international division of labor, and a glimpse of the whole leopard. The new stage of manufacturing is bound to belong to the integrated sea of industrial clusters, and only the detachable cluster upgrade and program upgrade can promote the development of each kind of new technology ecological scene, help upstream and downstream enterprises to get rid of the internal volume, but also let “for the alliance, for the tribe” is no longer a hollow word. “This year we first go to Europe to look at the organization of overseas industry exhibitions, and next year we plan to join forces with relevant industry organizations to help all enterprises in the industrial chain who are interested in going out to sea to go out together.” Zuo Qiang’s expectations have reflected the new ideas and new expectations of industrial organizations for the future development of industry integration and globalization.
This article is from the wechat public account: Quadrant
The electronic paper cluster goes to sea, and the manufacturing industry “wisdom” takes Europe and the United States
As one of the two pillar applications of the electronic paper industry, electronic paper price tags will ship more than 280 million units in 2022, accounting for 56% of the total electronic paper market share, and the compound annual growth rate of more than 50% in the past five years, which has begun to cross the threshold from 0 to 1 and enter the high-speed growth period, so that more and more end customers begin to recognize the value of electronic paper price tags. With stable growth prospects. In general, this category has a higher penetration rate in overseas mature markets, and the market is not large enough in the domestic market due to the difference in business formats.
The quarter think tank believes that China’s manufacturing out of the sea is not only a required action to increase sales, but a transformation opportunity that can be seized by the mainstream manufacturing industry, between the fluctuations of global supply chain restructuring, relying on “industrial genes + scene innovation + consulting services” to enhance the position, establish brand awareness in overseas industry circles, in order to avoid the recurrence of low-quality and low-price volumes.
This article contains 6558 words and takes about 17 minutes to read
The author is | Wei Li
Editing by | Xixi Sun
“Go out or go out” has become the latest buzzword in the tech industry. However, for China’s manufacturing industry, the whole machine products to go to sea is not a new thing: from the “made in China” electronic integration foundry, to the independent brands of Huawei Xiaomi, and now the industrial chain cluster to go to sea – the process of Chinese manufacturing transformation intelligent manufacturing, the integration with overseas markets is becoming more profound and diversified. The electronic paper industry, as a fresh case, is showing an ecological panorama of the industrial chain entering the sea and then going to the sea from far and near.
Time to move forward, from the launch of Amazon’s first Kindle reader many years ago to the new concept color-changing BMW Dee BMW model that preembes the hot topic of the week during the 2023 CES, it is actually the electronic paper (ePaper) technology that is constantly iterating. Compared with traditional paper, its display information can be transformed, adding intelligent elements to the information display; Compared with the luminous screen, energy saving, eye protection, and no wiring are the biggest alternative highlights of electronic paper.
The technology has gone through quite a few twists and turns in the commercial process: First of all, the concept of electronic paper technology was proposed in 1975, and after more than 20 years of basic research and development, it was only in 1995 by a laboratory of Massachusetts Institute of Technology in the United States to produce a prototype product, and in 1997, E Ink began to commercialize the road, and in 2009 was acquired by a Taiwan paper giant Yongfengyu. It was later merged into its well-known subsidiary Yuan Pacific Technology (retained the English name E Ink).
And is promoting the industrial layout of electronic paper in various application fields of smart things.
This development process is almost the epitome of the process of China’s electronics manufacturing industry after the reform and opening up.
On the other hand, electronic paper takes advantage of the industrial digitalization in the Internet of Things era and has become an alternative emerging technology similar to new energy technology, and is currently in the exploration stage of developing scenario-based applications. Mainland Chinese technology companies are playing an increasingly important role in the “scene innovation and commercial expansion” of these emerging technologies, and are more likely to lead international innovation and achieve industrial transformation.
At this stage, on the topic of scientific and technological manufacturing going to sea, the electronic paper industry continues to reflect its typical characteristics:
This makes the electronic paper industry naturally more necessary to go to sea, and can also allow Chinese manufacturing enterprises at different stages to find their own shadow. The story of this time to go to sea is different from the product path represented by “made in China” decades ago: from single OEM, to accessory integration, to domestic manufacturers taking the initiative to export various ecological scenarios and business models.
Yuan Tai Technology, the first manufacturer of upstream electronic paper material technology innovation, has released a bold statement: “To set aside ten years for ecological innovation.”
Many similar technology research and development have experienced industrial exploration stories such as electronic paper, and the essence behind it is that every basic research and development topic with breakthrough innovation must find the golden key of the “killer” application in the commercial scene, and then give birth to the innovation ecology and scene, and continue to integrate and change real life. Nowadays, backed by the trillion-level market, developed network facilities, and the popularity of intelligent applications, Chinese mainland supply chain manufacturers are becoming a new force for integrating an innovative technology into thousands of industries around the world and becoming useful and easy to use.
This has become a new identity of China’s “intelligent manufacturing to the sea”. For example, under the joint promotion of the Electronic Paper Industry Alliance (EPIA) and the industry’s leading companies, the electronic paper industry is spawning a new stage and new phenomenon of clustering: Large, medium and small-scale industry manufacturers are trying to gradually transition from selling intelligent hardware such as electronic paper display modules and electronic paper price tags to scene innovation, solution integration, customized services, one-stop operation and maintenance services, etc., through more complete, more front-end and deeper integrated business operations, systematic integrated innovation and more industrial application endorsement. To integrate and achieve industrial value-added, and promote application iterations in overseas markets.
For example, Hanshuo Technology, a retail technology manufacturer that has long been deployed to the sea and achieved considerable results, is a more successful case in the process of going to sea in the electronic paper industry. The information shows that Hanshuo Technology currently provides products and services to more than 50 countries and regions around the world.
This also seems to imply another metaphor of market disruption geopolitics under the transformation of the global supply chain pattern: technology sources have national borders, but application innovation has no borders, and in the process of improving the business model, integration capability, and scene ecology of technology matching, there is a half-step of the transformation and upgrading of China’s manufacturing industry and the low carbon digital transformation blue ocean that has penetrated into the global market. In this sea area, the application of technology is facing the possibility of innovation, and the proposition has gradually changed from manufacturing or product import and export itself to higher value-added business models and service exports.
Such a soft thinking transformation, can the domestic manufacturing industry steadily catch? — The quarter believes that it depends on whether Chinese enterprises can take the advantage of production capacity to the advantage of service capability, expand the new space for value-added innovation applications, and even establish a global industrial chain awareness from scratch, and promote the market education of technology trends such as the Internet of things to industrial applications, and accelerate the process of digital innovation in mature markets such as Europe and the United States.
01
Escape the inner coil, group out to sea
The quarter think tank learned in the survey that after the epidemic, especially into 2023, upstream and downstream enterprises in different links of the electronic paper industry are starting or deepening their own process of going to sea. The driving force of the industry to go to sea is chosen to break out at this time, first of all, because there are many head enterprises in the industry circle with the excellent performance of the sea pioneer has played a model role: Xingtai Yingke is good at shipping electronic paper modules and display solutions; Hanshuo Technology is good at retail electronic price tags and related digital solutions; Boe will invest in overseas related industries, and has acquired French electronic price tag company SES to carry out global layout in the electronic paper field.
According to ePaper Insight, the global electronic price tag (ESL) machine market will grow to about $3 billion by 2025, and said that “the expansion of more and more consumer electronics applications is one of the reasons for the rapid growth of the e-paper market”; Li Zhenghao, chairman of Yuan Tai Technology, said in a speech at the world Economic Forum in July this year: electronic price tags account for less than 10% of the global overall retail label market, especially to catch up with the global high inflation, the retail industry continues to adjust product prices, high human costs, and electronic labels have a lot of room for growth.
As one of the two pillar applications of the electronic paper industry, electronic paper price tags will ship more than 280 million units in 2022, accounting for 56% of the total electronic paper market share, and the compound annual growth rate of more than 50% in the past five years, which has begun to cross the threshold from 0 to 1 and enter the high-speed growth period, so that more and more end customers begin to recognize the value of electronic paper price tags. With stable growth prospects. In general, this category has a higher penetration rate in overseas mature markets, and the market is not large enough in the domestic market due to the difference in business formats.
At present, the current domestic electronic paper price tag solution providers have been temporarily involved in the whirlpool of the price war. According to the quarter think tank, some domestic electronic price tag project bidding selected the rule of unlimited bidding, the price lower limit in the bidding process is constantly depressed, and the cost of giving up the deposit after the final bid is far lower than the loss of completing the project.
Therefore, like mobile phones, wind power, and new energy industries, escaping from internal volume is also a direct driving force for e-paper companies to actively expand overseas markets in 2023. The idea of the manufacturers is very simple: “Even if the overseas market is difficult, it can be more fierce than the domestic competition?” Come on, let’s roll the people outside.”
“Electronic price tags have been rolled up to deviate from normal in China, and the same is generally true in other industries.” Zuo Qiang, secretary-general of the electronic paper Industry Alliance, said that overseas markets have become the common destination of electronic paper price tag solutions for three reasons: First, as far as the electronic paper industry is concerned, the advantages of domestic industrial agglomeration still exist, which can make up for the lack of mid-end production capacity or hardware support for overseas customers; Second, overseas markets pay more attention to the long-term value of inputs and can maintain a certain space and profit margin. For example, in the application of retail electronic price tags, Europe is relatively more mature and has wider acceptance, and the market and customer education costs are low. Third, although the volume of overseas markets is vast, the threshold requirements for enterprises to go to sea are not low, in other words, having the ability to go to sea is itself a barrier to competition.
Specific to the market segments, Europe, as the preferred destination for electronic price tag companies to go to sea, puts special emphasis on the concept of green and sustainable, so that electronic paper products with low-carbon, energy-saving and alternative paper characteristics have more potential demand; The United States is a potential market that has not been fully developed, and its developed retail industry still uses a large number of paper price tags, helping to reduce costs and increase efficiency and a more vivid marketing form is the source of attraction of electronic price tags for American retail enterprises.
For electronic paper price tag solutions at the sea at this stage, although the industry’s leading enterprises have won many large customers in Europe, the United States, and Australia, there are many small and medium-sized customers in these markets with potential demand for digital transformation – and let small and medium-sized retailers around the world use it faster, which is the greater opportunity the industry is currently facing. “The digitalization of the entire global retail industry is an inevitable process, and small and medium-sized retailers are still slowly accepting and transforming.” Xingtai Yingke general manager Xiao Xuming said.
In addition, for emerging technologies and industries such as electronic paper, going to sea is not only to expand sales in the existing electronic paper price tags and e-book readers, handwritten books and other pillar scenarios, but more importantly, to develop more pillar application scenarios. This is bound to be a long-term process that requires a lot of resources and continuous verification. The key to breaking the situation is to give full play to the current cluster advantages of China’s manufacturing industry, which can be jointly led by industrial organizations on related topics, and enterprises from upstream and downstream of the industrial chain can participate in the group to jointly promote innovation and jointly bear risks.
“There must be someone in the market first, and there are companies like Yuantai Technology that can push the concept out.” Then it will enter the stage of marketing and application promotion, to provide customers with a more sustainable service, which is not a company can do.” Xiao Xu name analysis way. Yuan-tai Technology, which has mastered the core technology of electronic paper, is also promoting the innovative application scenario of the entire industry in a 10-year cycle.
02
From selling hardware to selling power
Relying on the flexible supply chain, the industrial cluster will have stronger comprehensive service capabilities, help overseas customers reduce internal friction in the communication process, make services and products more flexible, and meet more personalized needs. On this basis, this clustered capacity output will become the basis for e-paper related enterprises to further enhance the global value chain position from selling products to selling services.
This is a proven and valid path. Taiwanese sensor manufacturer Huanda Technology’s gross margin for standardized products in 2022 is between 55% and 60%, and the gross margin for customized products is more than 70%, higher than TSMC’s 56% in the first quarter of 2023. “Big factories despise, small factories can not come” personalized business is the key to Huanda technology to do one point. And do a good job of personalized service, product ability, industry konw-how, customer trust three indispensable.
“We will divide innovation into two types, one is the original innovation of technology, and the other is the applied innovation. More technology-based innovations like core materials will occur overseas. For example, BMW’s color-changing clothing is not only a simple application of innovation, there are many original innovations in the process. Most domestic enterprises are better at technology application innovation based on the Internet of Things, such as e-paper card, e-paper bedside card, etc.” Zuo Qiang said.
From the perspective of the competitive situation of the electronic price tag industry, Hanshuo Technology can become the second largest company in the world in terms of electronic price tag revenue, an important reason is that it has invested more resources in research and development, and thus has certain innovative advantages in product performance.
In the e-paper industry Alliance’s vision, the e-paper industry can form a virtuous cycle: E-paper enterprises take advantage of China’s high activity in the field of Internet of Things applications, try and develop more demand scenarios for e-paper in the domestic market, form different solutions, and then push it to more overseas markets or connect the hardware with overseas system integrators, with the increase of overseas markets to promote technology maturity and price decline, and then reverse pull the popularity of the domestic market.
At present, to sell electronic paper solutions from domestic manufacturers overseas, and even rely on the advantages of industrial clusters to develop solutions directly for overseas markets, improve added value, you need to have a deeper insight into the target market, and promote the localization of various solutions in overseas markets through the continuous accumulation of industry know-how. At this point, Chinese manufacturing chain enterprises may need to be more active and smarter to integrate into the local industrial chain, and jointly promote scene innovation and program landing with upstream and downstream enterprises.
This requires each enterprise to find its own industrial chain role positioning, but also to do a good job of cross-field global market research, so that scene innovation in overseas become a true proposition.
How do you find your place? Xiao Xuming said: “The iot solution is a productivity tool that reduces costs and increases efficiency, and we are laying the infrastructure for the iot solution. We need to be like companies like Bosch, where each company focuses on its core business and is open to collaboration to scale the industry together.”
How to identify the overseas innovation scene? — There is a senior product person in charge of the industry said: “You can visit the local industry exhibition, touch the situation of local solution manufacturers, and find out whether our domestic market is making a big scene, and whether it is really needed in other people’s market?” For example, the domestic education market is suitable for expanding electronic paper exercise books, and overseas may not be able to introduce the same effect at this stage.”
Taking Hanshuo Technology as an example, this manufacturer focusing on retail digital solution innovation pays great attention to the industry pain points and localization details in each different regional market, and deeply estimates the characteristics of the application needs of local retail stores in order to adjust the corresponding digital solution strategy.
For example, Hanshuo’s DIY retail scenario application in the European region is focused on the needs of European consumers to buy various consumables in large home improvement stores, providing targeted solutions to enhance the connection between stores and consumers, and improving store efficiency with more digital and intelligent tools and solutions; At the same time, for the regional style of North American retailers who pay more attention to personalized marketing, Hanshuo also provides a variety of smart store marketing programs for local customers to choose.
There is no need to deny that the current complex and changing global economic environment has always brought new opportunities and challenges to all technology manufacturers: affected by the future global market expectations, large customers may consider high-end products and services with more cost-effective mid-range products and services when making choices. Compared with other foreign enterprises, the more flexible Chinese manufacturing industry will be easier to advance from the low-end to the mid-end, corresponding to the mature market customers from high-end to mid-end procurement transition to complete the upgrading of the global value chain position.
03
Shape long-term brand power to advance layout
Another key to seizing this opportunity is to build greater trust with upstream and downstream companies overseas. In the process of going to sea in the electronic paper industry, we will encounter this lack of trust between customers. Especially from the hardware base layer into the software management, when it comes to data security, Chinese enterprises are often difficult to be recognized and obtain more profitable value-added revenue outside of hardware.
Awareness and transparency influence the establishment of trust. The advantage of selling hardware is that the enterprise is oriented to the head solution provider, the concentration of customers is high, and the two sides can directly carry out point-to-point communication. Companies that sell services or even take the initiative to develop demand have a vague understanding of overseas customer groups and often cannot find out who the demand side is. At the same time, it is difficult for overseas customers to obtain more detailed information about manufacturing chain enterprises, resulting in a lack of transparency in inter-industry communication.
The exhibition has always been the most traditional, most effective, and almost the only way for many electronic solutions to reach potential customers. However, the exhibition is always temporary and can only play a nodal role in external communication. After the end of the exhibition, how to promote and efficiently establish long-term global brand communication, and solidified the innovation ability of solutions as their core brand labels in the upstream and downstream industrial chain is a long-term problem that relevant overseas enterprises need to think about.
From the point of view of some of the earlier layout of the head of the sea, overseas can indeed allow some enterprises to escape the internal volume of the domestic market in the short term, but in the long term, the establishment of “intelligent brand”, get rid of the “factory” label, is to help every enterprise that wants to, will soon, has gone to sea to win the trust of overseas customers, faster increase the premium threshold and expand the key elements of cooperation.
Based on this understanding, Zuoqiang’s e-paper industry alliance is trying to promote more member enterprises to take the initiative to carry out brand building and strategic layout in advance for overseas markets. In Xiao Xuming’s eyes: in the future, there will be classic manufacturing brands like Bosch in China, becoming an industrial brain with technical accumulation and cultural care, advancing with The Times, and establishing a deeper reputation and brand power in the global supply chain.
However, at present, the industry group is still taking the first step to go to sea. “We realized earlier that the enterprises facing the sea is not only the financial dilemma, but also the ability dilemma.” Many member companies do not have the ability to do this thing in three or five years, do not know how to go to sea, and may not start this thing. We hope to empower the entire industrial cluster through the platform, so that more companies have the ability to go to sea in advance.” Zuo Qiang said.
According to the past research of the Quarter think tank team, the key elements supporting global brand building include not only the basic product force, but also the four dimensions of organization, communication, values, and authenticity. E-paper Industry Alliance is currently guiding application innovation, building overseas media matrix, organizing overseas exhibitors, building overseas ecological network and other actions, in product innovation, overseas communication and other capabilities to provide help for e-paper related enterprises to go overseas.
At the same time, supply chain enterprises themselves also need to invest in the manpower and resources related to the sea for advance layout and comprehensive planning. From the experience of the industry’s leading offshore enterprises, Hanshuo Technology has established localization teams in Europe, North America and Australia to accelerate integration into overseas markets and ecology, and deeply cultivate and tap the latest local needs; In terms of long-term brand building, it is also at the forefront of the industrial group. By investing a lot of organizational resources, it has established a set of cross-cultural customized marketing strategies and green ecological strategies for different regional markets, and has carried out a more comprehensive international brand building in multiple dimensions such as product innovation, organizational innovation, team building, community care and enterprise ESG.
The electronic paper industry is a microcosm of China’s manufacturing industry to participate in the process of international division of labor, and a glimpse of the whole leopard. The new stage of manufacturing is bound to belong to the integrated sea of industrial clusters, and only the detachable cluster upgrade and program upgrade can promote the development of each kind of new technology ecological scene, help upstream and downstream enterprises to get rid of the internal volume, but also let “for the alliance, for the tribe” is no longer a hollow word.
“This year we first go to Europe to look at the organization of overseas industry exhibitions, and next year we plan to join forces with relevant industry organizations to help all enterprises in the industrial chain who are interested in going out to sea to go out together.” Zuo Qiang’s expectations have reflected the new ideas and new expectations of industrial organizations for the future development of industry integration and globalization.
This article is from the wechat public account: Quadrant