Adapting to China’s new circumstances
Driving for better service in an increasingly saturated market
Almost three years after our last site visit to mould and machine builder Guangdong Guozhu Group (see PETplanet Insider No. 10/16), we returned to Fogang County, which is about an hour away from the Cantonese capital Guangzhou. In the years since our last meeting, the company has been obliged to adapt its strategy to intensifying local competition and to find new ways to retain customers over the long term. The team, managed by Sales Director Heidi Cao, is now focusing increasingly on services. Particular attention is being paid to the planning process with customers and on after-sales, in order to stand out from the crowd.
Guangdong Guozhu Precision Mold’s customer base is balanced between small businesses and large-scale customers. Its market share, which, according to the company’s own data was 50% for moulds, has now shrunk to 35-40%. The reason for this is an increasing saturation of the market due to new, smaller toolmakers in China.
“We were forced to realign ourselves in certain areas in order to stay ahead. We want to achieve this on a permanent basis with new products but, above all else, through service,” said Mrs Laura Cai, interpreting for Heidi Cao. What the company understands by service, however, is set to extend far beyond the classic area of after-sales service. The new approach is intended to provide a turnkey service, including full customer support, from the idea through to market commercialisation.
“We regard this to be essential, if we are to remain economically secure over the long term. In principle, until the market launch, all of the R&D should take place with the consistent involvement of the customer,” Mrs Cai continued. “We also want to become stronger in the fields of hot runners.” The company identified the production of injection moulds of closures and handles, along with medical packaging moulds (since 2014), to be increasingly important markets.
“We believe that there is considerable market potential in these three areas,” she explained. “Between a third to a half of our total mould production is for the manufacture of closures and handles. In the area of medical applications, the approval process that is necessary due to the exacting requirements is in progress and it is foreseeable that the approvals will be issued in good time.” Generally, the company has seen a noticeable increase in enquiries from the non-food sector, for the production of packaging for beauty care products and cosmetics, for example. The expansion of international customers and markets represents another step forwards.
“This year, we are expecting growth in markets outside China of approximately 20%. Last year, our export share for moulds and machines was 20%,” Mrs Heidi Cao concluded. The total turnover of the Guozhu Group in 2018 was US $ 34 million.
Striving for a bright future, Guozhu intends to stay in this industry and maintain its promised, ongoing support to its customers.
