Xuchang analysis of hair products industry

 Xuchang characteristics as hair products, began in the Qing Dynasty, who was initiated to acquire home has been experienced for centuries. Since the 1980s, along with the country opening up and development of international trade, hair products, Xuchang ushered in new opportunities, with "the world's largest distributing center of hair products, raw materials," in the world. Currently, Xuchang hair products industry in a number of leading enterprises, driven by industrial-scale shape, constantly upgrading the product mix, industrial advantages to further strengthen the industry chain gradually improved, has increased from raw materials of human hair distributing center of hair products and gradually developed into products distribution center, China's export production base of hair products.

    First, the current advantages of Xuchang analysis of hair products industry

    1 establish the basic advantages of scale. After reform and opening up 30 years of development, the size of Xuchang advantage of hair products industry has been basically established. Xuchang hair products export enterprises currently 120, of which more than size 77 hair products manufacturer, employing 30,000 people, hair products industry chain employing more than 20 million people. The distribution companies are concentrated in Xuchang County, City Economic Development Zone, Wei Du District, Yuzhou four counties (cities, districts), the initial formation of industrial clusters. Hair products, Xuchang has become the country's most concentrated areas of production, is China's largest production base for export of hair products. According to statistics, the U.S. hair products market demand throughout the year winding process 15 million, of which 10 million products from Xuchang hair production provided. Xuchang has become the country's current hair products information center, manufacturing center, R & D centers, industry-standard center, hair products and hair care products National Quality Supervision and Inspection Center. Hair products in China in 2009 the amount of $ 1.56 billion exports, up 18.0% over the same period Xuchang hair products companies export $ 719 million, an increase of 26.9% of total exports accounted for 46.1%. First quarter of 2010, the city made products exported $ 170 million, an increase of 44.0%, a good momentum.

    (2) structure significantly. From the industrial structure, Xuchang a large number of staff who made the purchase and sale of raw materials, a few farmers began to accumulate a certain Zuozhuang acquisition; not only the enterprises engaged in production of files made of human hair rough primary products, but also companies will file for re-issued processing winding semi gradually appeared a small group of world-class companies will catch up with clockwork further processing of finished products made of fine hair products processing enterprises.

    From the product structure, the proportion of synthetic hair products is increasing, and thoroughly change the production mode of a single human hair. Products from the middle and low grade to high-grade forward, finished the development of human hair and synthetic hair are two series of six categories, more than a thousand varieties.

    3 highlights the leading enterprises. Rebecca, the dragon is, Hengyuan, Skandia and other enterprises, export volume in 2009 of more than $ 20 million, is the major support of Xuchang City, the industry leader, Xuchang effectively promote and stimulate the industry to accelerate the development of hair products. Among them, Rebecca Hair Products Co., Ltd. is a research, development, production and sales of the world's largest multinational professional hair products, consists of nine domestic subsidiaries, three foreign subsidiaries and a foreign joint venture. More than 12,000 employees in July 2003 approved the Shanghai Stock Exchange, becoming the leading hair products company. 99% of products sold in Europe, America, Africa and other foreign markets in 2009, the main business income 1.61 billion yuan, exports $ 210 million, ranking the forefront of export of private enterprises in Henan Province. The main products are craft winding, fiber winding, women's wig, Mannequin head, men's caps, five series more than 3,000 varieties, sold in North America, Europe, Africa, Asia, more than 30 countries and regions. Hengyuan, Skandia and other companies have completed training, is seeking listing.

    4 higher R & D level and ability. By Rebecca Hair Products Company is the leading enterprise, through years of exploration, the formation of a number of key R & D team, with a number of patented technologies and core production technology, the development of a number of influential product standards, is actively creating level enterprise technical center, hair products, Xuchang toward a broader international market and the overall industry to upgrade the foundation. In 2009, Rebecca's a total of 1797 kinds of new products, new color number 70 species, the export value of new products to achieve $ 106 million contribution rate of new product output value reached 50%; 65 research projects of technological innovation, of which 45 successfully extended to the production, not only to enhance the technological content of products, but also save money, reduce production costs.

    5 rich and well-trained labor force. Xuchang as the inland cities with large population, the city's population of 4.6 million people. Abundant human resources, cheap manufacturing costs, with rich, attractive profit margins, attract foreign intermediate dealer to Xuchang seeking partners, venture capital, technology delivery, registered joint venture company for import and export procedures, product With the finishing process is also semi-finished direction of change.

    Second, hair products, Xuchang impact of industry factors and key issues

    In recent years, as the international financial crisis, and the hair products business competition becomes more intense, Xuchang City, hair products industry is also facing a number of factors and major issues, mainly in the following areas:

    1 Most companies ahead of a general lack of awareness and courage the development, limiting the development of enterprises. Xuchang hair products business production, sales and business development are explored in practice, out for a long time to form a "look, two count, then try to dry" sense of the potential conservative. In the development of enterprises, the lack of scientific and rational in the long-term planning, missed the rapid expansion of business, bigger and stronger opportunities.

    2. Irrational product mix, product profitability is poor. Currently Xuchang rough-based products to hair products, most are still primary products, semi-finished products. Most hair products manufacturer of the existence of strong profitability in the high-end products less profitable than low-end products; less chemical products and strong earnings, weak profitability of human hair products and more; processing plant production files hair, winding, The production of finished products of few caps, even the best Xuchang Rebecca's hair products company, is the winding process for the company's leading product, the proportion of its total sales 80%, while the winding process outside the high-end women's wigs, synthetic hair, Mannequin head, men's caps and other products sold only about 20% of total sales.

    3. The lack of new products and technologies independent R & D capabilities, relatively low value-added product mix. In recent years, human hair raw material prices, production costs increase, synthetic hair has become a trend, momentum. The chemical fiber raw materials, production technology in Japan, Korea, under the control, in addition to leading enterprises Rebecca has started a new R & D and production of synthetic hair, the other enterprises are still blank. Meanwhile, industrial production, hair products, Xuchang City, there is not a mature technology, complete sets of standard equipment, the majority of equipment by enterprises in the manufacturing process to create self-experience, the lack of world advanced level of mechanical equipment. Shortage of senior professional and technical personnel, scientific and technological innovation ability, tend not to have independent research of core technologies to develop new products. Slow adjustment of high value-added product mix, low-tech products, products in the international market competition is weak and difficult to form industrial advantages.

    4. The lack of brand awareness, sales channels, a single, market risks. Xuchang City, the vast majority of hair products sold to foreign buyers, by deep processing, sales to end markets, of which 80% of sales to the U.S. market. Because of its lack of end-product brand, not to develop a network of independent sales channels, can not control the terminal market, it is difficult to adapt to market changes, subject to foreign buyers, business risk is relatively large, at present in Africa, started the brand in addition to Rebecca, the Other companies have not started their own brand, resulting in hair products, Xuchang city as a whole, although large-scale industrial production, competitiveness is not strong, and once the U.S. market, launched an attack changes or buyers, hair products, Xuchang city will face enormous risks.

    5. The lack of specialization and disorderly competition, leading to inefficiencies within the industry. Rebecca and a few other companies in addition to strong technical force and entered into the hoods and other high-tech products deep processing, the vast majority of enterprises due to low levels of technology and lack of development funds, the majority of small business development in order to survive, not only the acquisition of its own people made for the early processing of human hair combing, and hair re-file in the pickling process, semi-finished products directly to the spring sales to foreign buyers, large companies are engaged in their own integrated production, from primary production to semi-finished products to finished product. Xuchang hair products because the lack of division of labor among enterprises, the industry has shown a low level of competition in homogeneous disordered state can not regulate the formation of industrial operations and in accordance with comparative advantage and capital and technology companies are focused on hair products industry value chain, production system, the vicious competition is widespread. Since human hair is scarce resources, small businesses compete with big business of human hair raw material, the race to raise the price of raw materials, increased production costs of the entire industry, and because small businesses the extensive processing of raw materials, low added value, lead to serious waste of raw materials.

    6. The development of its own lack of funds business prevalent, difficult starting point of the scale. Many companies because small scale, is not standardized and is facing financial difficulties, restricted the size of the business development. Hair products industry is a high liquidity into the industry, human hair, lack of resources, resulting in high raw material prices. One ton long hair nearly one million purchase price, a cash flow period, the demand for capital flows as little as six or seven hundred million than 2,000 million, to establish an offshore company, owned nearly a million need to flow. Most SMEs affected by the size of credit limit, only a small financial institutions to obtain short-term loans. Direct funding constraints delayed the pace of development of most enterprises.

    7. The exchange rate of the decrease in business caused by adverse effects. Dollar exchange rate continues to decline, leading to exchange rate risk faced by companies, enterprises had to take orders and not take. The appreciation of the renminbi, weakening the hair products export price advantage, but also the profit margins are plummeting, hair products for export-oriented businesses had a negative impact. While the international financial crisis on the United States, Europe and other developed countries the impact of major consumer products, in a certain period of time, hair products, Xuchang will adversely affect exports.

    Third, optimization and hair products industry recommendations Xuchang

    1. Deepen product structure adjustment. Hair products, Xuchang City, most of the face as primary processed products, low value-added, profit margins shrinking, vicious competition and other issues, must guide enterprises in the product structure adjustment and upgrading, to increase added value. Intermediate products to achieve the end product of the transformation, primary processed products deep processing of products to change, mainly middle and low low to high school combine and highlights the changes in high-end products, for the establishment of high-end brand products lay the foundation, resulting in a new round of competition in the formation of new advantages.

     (2) to build the whole industrial chain advantage. Industry leaders to play on the industry value chain integration role in bringing hair products company in the same value chain work together, and, respectively, in the enterprise in which the level of industry value chain to start full competition, survival of the fittest. In hair products manufacturing sectors, through the introduction of international advanced production equipment and processes, the introduction of advanced research and development and technology personnel, improve product quality, optimizing product mix, gradually increase the synthetic hair, women's wigs and men's caps and other high-end products share, developing new products, new technology development efforts, enhance product quality and core competitiveness. In the raw materials sectors, while continuing to strengthen the global distribution center for raw materials of human hair Xuchang of construction, raw materials, synthetic hair to increase R & D and production efforts to address the shortage of resources, human hair, synthetic hair materials controlled situation for the formation of hair products industry create the conditions for the cluster. In the marketing chain, through increased networking, encouragement and support to Rebecca Hair Products, represented by companies to open up the courage to explore domestic and foreign markets, the success of developing the African market in the European market, based on the American market continues to intensify efforts to develop and build own sales network, to speed up the construction of outlets and stores, and quickly occupied the domestic market.

     3. To enhance their core brand. Xuchang hair products for many companies has not its own brand of low processing fees for foreign distributors to work the problem, Xuchang hair products companies must build their own brand, create a strong competitive edge. Rebecca and a few other companies have been the first step, in Africa and Europe started its own brand, hair products, Xuchang other companies have to broaden sales channels, network-building, to create a more well-known international brands of hair products, the expansion of international market share .

    4. To strengthen human resources. Xuchang hair products company is currently a lack of senior management personnel. By accelerating the training and introduction of professionals, good talent pool work. Strengthen technical training to improve the overall quality of staff, strengthen management training, improve the management level. Gradually establish a scientific incentive and restraint mechanisms. Joint schools with colleges and universities, colleges and universities do business practice and theory of continuous integration, complementary advantages for all types of qualified companies continue to develop high-quality personnel for the global base of hair products continue to provide excellent human resources.

     5. Adhere to science and technology leader. Technology leadership is to create the basic premise of the industrial chain advantage. Actively introducing and absorbing foreign advanced technology, increase research investment and technology development efforts, speed up technological progress, improve efficiency and improve the technological content of products, quality and grade, improve product quality and added value, take the path of development quality and efficiency, and enhance enterprise competitiveness in international markets. Support and guide enterprises to accelerate the development of machinery and equipment, to encourage businesses and universities, scientific research institutions, engaged in hair products, machinery and equipment development and production, and thus as soon as possible the formation of hair products in Xuchang city, special equipment manufacturers, to provide superior hair products processing equipment enable enterprises to more complete chain.

     6. To promote the scientific management. Strengthen the entrepreneurial ranks, to further emancipate the mind, and actively introduce advanced management experience and management philosophy, to a large number of international business acumen and global business strategy concept of entrepreneurs. Through the transfer of shares in order to let the leader of a great new business entrepreneurs. Strengthen management, to strengthen accounting, pay attention to savings, reduce costs, improve capital utilization, and gradually make the company into the scientific management of the track; the concept of the modern enterprise system, managed by the family to the norms of corporate restructuring, and gradually form a corporate survival of the fittest , the operator or demoted, and personnel can be hired, and income can be increased or reduced, the normal operation of technological innovation mechanism. To guide the enterprise from past experience to "science and technology made" change of consciousness, the development of real hair products industry focus on promoting the upgrading of industrial technology, and guide enterprises to enhance the management level.

    7 of capital operation strategy. By means of capital operation, through horizontal mergers, acquisitions, expansion of production scale, the pursuit of scale cost-effectiveness; by controlling the vertical integration of industry value chain, the formation of production, supply, research, and marketing system of integration; through good management of assets into the listed companies, investment funds to raise further development of enterprises; through the acquisition of the United States and other countries and regions, hair products commercial circulation enterprises, access to international brands and mature sales network channels; synthetic hair through the acquisition of raw materials, manufacturers, raw materials for synthetic hair, advanced machinery and equipment, mature process, R & D personnel and synthetic hair materials sales network channels; through joint ventures, partnerships or strategic alliances and other cooperation for industrial upgrading, product optimization, market.