Author | Guo Zhaochuan
Edit | Liu Jingfeng
The steel furniture that has been preferentially purchased by Zhongnanhai in China has become popular all over the world.
On Amazon's corporate shopping platform in the United States, Europe, Japan and other countries, many of the environmentally friendly and reusable steel office furniture comes from the same place: Pangcun Town, Luoyang, Henan Province, China.
As the largest steel furniture production base in China, the steel furniture industry in Pangcun Town, Luoyang has not only created the first "China Famous Brand Product" in Luoyang City, but also has a number of "China Famous Trademarks" and "Henan Famous Brand Products", as well as more than 100 national invention patents. The industry accounts for 80% of the national market and has even become a priority procurement target for many central state agencies.
The emergence of steel furniture in Pangcun Town has benefited from the surge in demand for steel furniture in overseas markets, especially in the field of enterprise procurement.
Many overseas enterprises judge that 2024 will become the "explosive year" of China's furniture exports. As the demand for eco-friendly and sustainable furniture continues to rise from overseas customers, especially for recyclable, DIY-assembled steel furniture, it has led to a surge in demand for "steel instead of wood" furniture. Chinese steel furniture manufacturers have recognized this trend and have begun to expand overseas markets.
According to the General Administration of Customs of China, China's home furniture exports will reach 1.04 trillion yuan in 2023, surpassing the trillion mark for three consecutive years. In the first two months of 2024, the export value of furniture and its parts reached 84.69 billion yuan, a year-on-year increase of 39.8%. Among them, the steel furniture enterprises in Pangcun Town have received more than 300 million yuan of foreign trade orders, and achieved 165 million yuan of foreign trade export sales revenue.
Goods for the Japanese market are being prepared to be packaged and shipped Source: Photo by Xiaguang Society
With the products through Amazon to the European Union, North America, Japan and other overseas markets, Pangcun Town steel furniture industry is also undergoing an upgrade and innovation, not only the enterprise from a single "manufacturing" to "design and creation", and the production has also achieved a high degree of intelligence, quality inspection process maturity.
All kinds of changes reflect the new situation of the current industry to go to sea - to move towards high quality.
The steel office furniture produced in Luoyang is undergoing quality testing Source: Photographed by Xiaguang Society
The well-known Luoyang steel furniture industry belt at home and abroad has a history of more than 40 years of development.
With Pangcun Town as the core, the upstream and downstream factories of steel products formed by surrounding villages and towns such as Li Village and Koudian are the main force of production and sales of China's steel furniture industry - the steel furniture products produced here are exported to more than 120 countries and regions such as the European Union, North America, Australia, and the Middle East, with an annual output value of 18 billion yuan and an export volume of 1.03 billion yuan.
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Nowadays, after several arduous stages of industrial transformation and upgrading, a number of highly automated production and processing factories have appeared in the Luoyang steel furniture industrial belt, which is at the forefront of the era of China's steel furniture going to sea.
One of the most typical is Luoyang Kefeiya Steel Furniture Factory.
The exterior of the Kefeiya factory Source: Photographed by Xiaguang Society
Before 2000, Kefeiya was still called "Luoyang Jinzhong Iron Box Factory". At that time, township enterprises were mainly based on traditional production, but the quality was unstable, and they were still spinning in the traditional production mode. Although under the leadership of Hu Yunliang, chairman of Luoyang Kefeiya Office Furniture Co., Ltd., the quality of Kefeiya's products has been greatly improved, but the sales are still limited.
The change occurred in 2013, when Hu Yunliang brought a batch of high-quality samples from Luoyang to test the waters of the Canton Fair for the first time.
"There was a lot of pressure – how could we sell our products and get more customers?" Hu Yunliang recalled. The Canton Fair, as the most important channel to go to sea at that time, brought them unprecedented hope: "At that time, there were a lot of people who were interested in us, and it was never interrupted from morning to night. ”
To his surprise, their products stood out in the Canton Fair, and he also received the first batch of overseas orders from Singapore. From 2013 to 2018, Luoyang Kefeiya received a large number of foreign trade orders, and one after another containers of products were sent overseas, and countless European and American customers came to dock.
"Our production situation can no longer meet the market demand, and if we want to further gain customers, we are determined to take the road of automation." Hu Yunliang told Xiaguang Society.
Modern Kefeiya production workshop Source: Photo by Xiaguang Society
But after entering 2019, the situation has changed again.
Kefeiya suddenly discovered: "The foreign trade business is not as good as before, and overseas orders are slowly declining. ”
Due to the increasingly serious homogenization of products, there are more and more similar products that can replace and compete with each other, and the unit price of customers is naturally declining under the squeeze. "You know that we are from Pangcun and have very strong learning ability, and it is not easy to keep the technology leading in the same industrial belt."
In order to avoid the situation of product imitation, profit squeezing, price involution and homogeneous competition, while improving productivity, Kefeiya and other factories are trying to explore more diversified overseas sales channels.
In e-commerce going overseas, they hope to grasp the business opportunities of individual consumers (C-end) and commercial buyers (B-side) at the same time.
As a result, Kefeiya settled in Amazon and opened Amazon Enterprise Shopping at the same time, realizing one-stop access to the B-end and C-end markets, and amplifying the production advantages of Kefeiya as much as possible.
Different from traditional foreign trade, the new business model of DTB (Direct To Buyer) launched by Amazon Business allows sellers to directly connect with the final purchasing company and complete the transaction, eliminating multiple intermediate steps in the traditional supply chain. This model not only improves the efficiency of transactions, but also enables sellers to more accurately understand and meet the specific needs of buyers, thereby accelerating their business expansion in international markets.
Young Kefeiya employees are working in the production workshop Source: Photo by Xiaguang Society
By directly connecting global buyers with steel furniture manufacturers in Luoyang, Amazon Business has effectively shortened the supply chain and improved transaction efficiency.
At the same time, different from the traditional offline foreign trade model, Amazon sellers can have a clearer insight into the changing demand of overseas commercial procurement markets through the digital tools provided by Amazon.
For example, adapting product design in the face of different market preferences for steel furniture:
The Japanese market is more inclined to choose space-saving steel office furniture, so compact steel furniture with sliding doors has become the preferred choice for many Japanese customers. In the European and American markets, steel office furniture is in greater demand, and larger sizes are preferred, usually choosing designs with swing doors and high handles.
These meticulous and strict demand for steel furniture to go overseas are the valuable experience gained by Luoyang steel furniture industry belt manufacturers in the trend of Amazon corporate purchasing, and have also become the basis for them to innovate products and carry out cross-border e-commerce.
Kefeiya's steel furniture for global buyers Source: Photographed by Xiaguang Society
Yao Ting, deputy general manager of marketing of Luoyang Shuangbin Office Furniture Co., Ltd., told Xiaguang Agency: After three years of doing Amazon e-commerce, the scale of the factory has increased by more than 10 times, "which we could not imagine before." ”
In July 2020, when Li Yingbin, general manager of Shuangbin, shipped the first batch of steel office furniture to Amazon's overseas warehouse, he almost held a "fight against the water" mentality. At that time, they were completely unknown about the future of Amazon's cross-border e-commerce, and even the Amazon store under Shuangbin had not yet fully applied for landing.
After surviving the starting period of about a year, Shuangbin achieved a stable order volume from Amazon e-commerce, thus ending the distribution era and beginning to completely carry out cross-border e-commerce self-operation. After June 2022, Shuangbin began to build his own independent brand on Amazon Enterprise, and after half a year of hard work by cross-border e-commerce operators, he finally succeeded in getting the BS (Best seller) label in January 2023.
Behind this, Amazon's global selling business is inseparable from the localization services and strong support provided by Amazon's global store business for Chinese sellers to expand in the global market.
It is reported that since the launch of Amazon's global store business in China in 2015, it has helped hundreds of thousands of Chinese sellers successfully start their Amazon business.
At present, there are more than 2 million small and medium-sized business sellers selling products through Amazon, and the number of Chinese sellers who have completed brand registration has nearly tripled between 2019 and 2022, which also reflects Amazon's huge influence in helping Chinese sellers go global.
At present, 90% of Shuangbin's overseas orders come from Amazon. "Amazon e-commerce is a very standardized channel, and the rules are clear in all aspects, especially suitable for sellers who adhere to long-term rather than short-term interests." Yao Ting said. For many Luoyang steel furniture manufacturers trapped in involution and stock competition, Amazon undoubtedly provides them with another reliable way out at a critical moment.
Luoyang Shuangbin Furniture Source: Photographed by Xiaguang Society
At the same time, after entering Amazon, the brand building and production and operation models of many Luoyang manufacturers have also changed.
Under the DTB innovation model launched by Amazon Business, traditional B2B transactions are transferred from offline to online, eliminating the need for multi-level distribution, enabling sellers to directly connect with the final purchasing company and complete the transaction. Through the direct contact and rapid feedback mechanism of Amazon Business Shopping, it also affects the manufacturing process of Henan Luoyang Steel Furniture Factory in many details.
One of the biggest changes in the process of scale is that factories become enterprises, and companies are increasingly able to bear the greater cost of trial and error. In this way, driven by the expansion of cross-border e-commerce orders, Luoyang's steel furniture manufacturers have also changed their roles from a single "production and manufacturing" to a "design and creation" enterprise.
"In the past, we had to consider the question of 'whether we can sell it', and we only dared to change the model slightly and iterate on the existing basis. But since last year, we have been more confident and more daring to try and make mistakes. Yao Ting said.
Steel furniture workers at work Source: Photographed by Xiaguang Society
She gave an example. A product operator of Shuangbin, who was inspired by overseas YouTube home videos, found that users in the North American market have a soft spot for black and red products, so he designed a new design case cabinet with a black frame and red door.
In the past production and processing mode, such bold attempts are often not implemented, and manufacturers will be more inclined to make traditional colors such as blue. However, due to the quick feedback on Amazon, this bold cabinet design with black frame and red door was so popular that it was mass-produced and loved by American buyers.
"It was also at Amazon that we started paying attention to the bad reviews of our products from overseas customers." Yao Ting said. When domestic sellers are paying attention to the praise of the e-commerce platform, Yao Ting feels that bad reviews are more meaningful than good reviews, "Bad reviews are actually unmet needs." ”
Because of this, manufacturers can conduct straightforward analysis and research on market changes in distant European and American sites.
Handling of finished steel furniture Source: Photographed by Xiaguang Society
With the continuous maturity of Luoyang's steel furniture industry belt, Amazon's global store opening has promoted the expansion of the entire industrial chain to the international market and fully tapped the potential of the manufacturing cluster.
Last year, Amazon Business released the Industrial Belt Accelerator Program, which not only incubated and empowered the Luoyang Steel Furniture Industrial Belt to go overseas, but also created a superimposed effect of cross-border e-commerce in China's vast industrial belt. In the three-year period from 2023 to 2025, the Amazon Business Belt Accelerator Program will cover hundreds of China's industrial belts, deeply tap the manufacturing power of China's industrial belts, and bring Chinese industrial belt enterprises a more accurate and direct grasp of overseas market dynamics.
Shao Jing, general manager of overseas business of Luoyang Kefeiya Office Furniture Co., Ltd., told Xiaguang Agency, "Amazon's algorithm is indeed very accurate in the control of products and users, and the impact of positive and negative reviews on the order volume is very direct." This makes Luoyang steel furniture manufacturers who have crossed the threshold of overseas e-commerce pay more attention to the improvement of the product itself.
On the one hand, manufacturers need to broaden their horizons to provide a better product experience for overseas users. On the other hand, factories also need to pursue more extreme product design and quality in production.
Today, Kofia has built a highly automated factory. In the clean and new workshop, a robotic arm is working: "The robotic arm can realize the automatic grasping of the steel plate, if you use manual grabbing, the layout is very easy to deform, and the machine is not only very fast but also not easy to deform, from spot welding to palletizing, the whole process can be completed by only one worker." ”
The automated robotic arm is at work Source: Photographed by Xiaguang Society
In addition, the factory has a complete quality testing area. For example, the switch test experiment of the steel filing cabinet should be guaranteed not to be less than 100,000 times. In addition, hardware accessories, spraying and other processes have corresponding tests.
In the small villages and towns of Henan, this kind of highly intelligent factory workshop and orderly and rigorous quality inspection process reflect the current situation of the overseas industrial belt - moving towards high quality.
The quality inspection form of the factory Source: Photographed by Xiaguang Society
Especially after joining Amazon and opening Amazon Business, the industrial belt is deeply linked to the international market. From the appearance, design, to price and after-sales of products, the whole process is almost completely transparent, so that many of the overseas merchants in the Luoyang Industrial Belt have a way of thinking of "embracing competition", prompting businesses to think about and upgrade their products and services.
In the case of paying more attention to marketing and more transparent competition, the arrival of the era of cross-border e-commerce global commercial procurement model has further brought industrial and talent upgrading to Luoyang's steel furniture industry.
"Now everyone is recruiting Amazon operations, Luoyang's overseas operation talents are scarce, and the salary is even higher than that of Shenzhen, and many salaries can reach 15,000 yuan / month." A person related to the industrial belt factory told Xiaguang Agency.
The upgrading of the Luoyang Industrial Belt has involved a lot of competition for foreign trade talents. In addition to the operation talents of overseas online procurement, young people with overseas study background and multilingual ability are also the object of competition for many manufacturers - they need employees who understand Japanese, German, and Spanish to do some after-sales services.
Similarly, in the production hall of Kefeiya, many young skilled workers can be seen operating next to the robotic arm. One of the young employees who graduated with a bachelor's degree has been working in the factory for more than two years, and has brought intelligent and automated production methods to traditional industrial production.
Due to the development of the industrial belt promoted by overseas orders, the upstream and downstream related industrial chains have also ushered in vigorous development, bringing great changes to the lives of local people.
"Young people can do e-commerce, we also have logistics resources here, we can also transfer goods back and forth, and relatives can also do upstream and downstream support, which is very perfect." Luoyang steel furniture industry belt factory related personnel told Xiaguang Agency. As a result, the income of the local people has increased, and the local people can achieve a relatively high income in the local area without going out to work, and take care of their families at the same time.
The expansion of overseas business is making the entire Luoyang steel furniture industry belt move towards branding, specialization and overseas in-depth localization.
"Everyone will gradually break through the homogenization of products and form their own path, and everyone is more willing to start a business and innovate, pay more attention to intellectual property rights, pay more attention to brands, and bring more dividends to this industry." Hu Yunliang said.
There is no doubt that this road to the sea, driven by new opportunities for global business procurement, is bringing the industrial belt in China's rural areas into a new era.