Development trend of tool hardware industry chain in 2023

Hardware tools is a general term for various metal devices manufactured from iron, steel, aluminum and other metals through forging, calendering, cutting and other physical processing. There are many kinds of hardware tools. According to the use of products, they can be divided into tool hardware, building hardware, daily hardware, lock and abrasive tools, kitchen and bathroom hardware, household hardware and hardware parts and so on.

 

Hand tools and power tools are the main components of hardware tools. Hand tools, also known as hand tools, hand tools, refers to the use of hand to twist or force tools, mainly including the following categories of products: wrench, pliers, hammer, screw (screwdriver), file, saw, scissors, etc. Power tools refers to tools that are driven by power sources. According to the power source, power tools can be divided into electric tools, pneumatic tools, fuel tools, hydraulic tools and so on. Power tools are mainly divided into metal cutting, grinding, assembly and railway power tools. Common electric groundbreaking with electric drill, electric grinder, electric wrench, electric screwdriver, electric hammer, electric drill, concrete vibrator, electric plane and so on. Hand tools and power tools are the most widely used, the largest value of two kinds of hardware tools.

 

 

Hardware tool industry chain

From the upstream of the industrial chain, in recent years, the iron and steel industry in the upstream of the sufficient supply of raw materials and downstream demand continued growth driven by rapid development, the output of its products also increased year by year. According to data, the pig iron output in 2021 will be 868.57 million tons, down 2.3% on 2020. Crude steel output was 1,032.79 million tons, down 3% year-on-year in 2020; Steel output was 1336.67 million tons, up 0.9 percent year-on-year in 2020.

 

Output of major products in China's steel industry from 2016 to 2021

1. Global market

From the perspective of the global hardware tool market scale, according to statistics, the global tool market space in 2021 will reach 67 billion US dollars, among which the power tool market space is about 41.5 billion US dollars, accounting for about 62%. Hand tools and other market space is about 25.5 billion yuan.

 

Market size of major products in the global hardware tool market from 2016 to 2022

Asia Pacific is the largest consumer of hardware tools, North America, Europe residents are the main consumer groups of high-end hardware tools. The global demand for hardware tools is mainly in North America, Europe and Asia Pacific. Among them, the demand in the Asia-Pacific region is mainly concentrated in China, Japan and other countries. According to data statistics, in 2020, the demand for hardware in North America accounted for 29%, 25.8% in Europe and 38.6% in Asia Pacific.

 

The proportion of regional demand of global hardware and tools industry in 2020

2. Chinese market

In terms of the domestic hardware tool market, according to relevant statistics, the domestic hardware tool market scale in 2021 is more than 250 billion yuan, among which the market scale of power tools is 187.3 billion yuan, and the market scale of power tools is relatively large.

Market size and growth rate of China's power tool industry from 2017 to 2022

 

In terms of export status, the main export areas of Chinese products are the Belt and Road, the United States and 28 EU countries, among which the highest proportion is the Belt and Road part, accounting for 28%. In the hardware tools export product structure, the top three are hand and storage, professional power tools and power tools accessories, the total proportion is 65%, among which hand and storage accounted for the highest proportion, 26%.

Distribution of Export Structure of China's Hardware Tools (Unit :%)

1. Market competition pattern

 

In terms of the competition pattern of the global hardware tool market, according to relevant statistics, the top five companies in the global tool revenue in 2021 are Stanley Black & Black, TTI, Bosch, Makita and Snap-on, with the top five taking up about 67% of the market share in 2021. Superstar Technology has a market share of about 2.6%.

 

Market competition pattern of global hardware tool industry in 2021

In terms of the market competition pattern of hand tool industry, there are up to 500+ kinds of hand tool products designed for different demand types such as maintenance, repair and industrial operation. Low manufacturing threshold and diversified product types also result in a fragmented market pattern of the hand tool industry. At present, CR3 of the global hand tool manufacturers accounts for 32.3%, among which the domestic giant technology market accounts for 6.2%.

 

Market competition pattern of global hand tools industry in 2021

2. Operation of Superstar Technology

Giant Star Technology has grown into the largest hand tools company in Asia and the third largest in the world. The company's main products include hand tools, power tools, laser measuring instruments, storage cabinets four categories. From the perspective of the company's operation, according to the annual report data disclosure, in 2021, the total operating revenue of giant technology 10.92 billion yuan, net profit reached 1.27 billion yuan. Among them, the revenue of hand tools and power tools was 6.541 billion yuan and 1.021 billion yuan respectively, accounting for 59.90% and 9.35% respectively.

 

Total revenue and net profit of Giant Star Technology from 2013 to 2021

1. Market demand is driven by the emergence and adoption of advanced and intelligent technologies

The increasing emphasis on innovation and new product development by major power tools and OPE market players to increase differentiation and maintain a competitive edge is expected to drive further incremental growth in the industry in the future. Major market players have been introducing new products equipped with advanced technologies to meet the diverse needs and preferences of end users. In addition, the Internet of Things, sensors or AI-enabled products are potential future growth areas due to their ability to enhance the user experience. This technological advance has the potential to increase productivity and drive demand for power tools and outdoor power equipment in a variety of usage scenarios.

 

2. The demand for professional power tools increases

Market demand for power tools and OPE products is also expected to increase due to infrastructure and commercial building activity, growth in residential construction, and increased new home sales in the US market, with increased demand for power tools from industrial projects contributing to market growth.

 

3. There is a significant increase in the demand for power tools in the Asia-Pacific region

The global demand for hardware tools is mainly in North America, Europe and Asia Pacific. Among them, the demand in the Asia-Pacific region is mainly concentrated in China, Japan and other countries. In terms of market segments, North America, Europe, Asia and Latin America hand tools market accounted for 35%, 30%, 8% and 6% of the global market in 2018, and North America and Europe together accounted for 65% of the market. In 2020, the power tool market in Asia Pacific, North America and Europe will take up 33%, 26% and 30% of the global market. Compared with hand tools, the demand for power tools in Asia Pacific has significantly increased. The main consumer groups of high-end products are located in Europe and the United States and other developed countries. Take tool industry leaders Stanley Black & Decker and Tron as an example. In 2020, the United States and Europe together contributed 79% of the revenue of the former's tool & storage business segment, while 92% of the latter's turnover was realized in North America and Europe.