Have you noticed that the hardware stores at the entrance of the community and at the end of the street are always deserted with few customers, but they are the strongest “nail shops” on the entire street.
The shop signs in the surrounding streets have changed many times, but the hardware store still stands out from the crowd.
Even though no one seems to be buying or visiting, the number of hardware stores hidden in the market across the country is twice as many as the milk tea shops that are “blooming everywhere”.
According to statistics from Chishi Consulting, the total number of retail hardware stores in my country is about 1 million. Even with the impact of e-commerce and the decline of physical retail, the survival rate of hardware stores is still much higher than that of milk tea shops, convenience stores, clothing stores and other densely populated businesses.
Behind the seemingly most “deserted” business, there is even a “China’s Little Dubai” and the “E-commerce County King”.
Divided according to the number of county units where Taobao villages gather, the top three are Yiwu, Yongkang and Caoxian.
One is the well-known “Small Commodity Capital of the World”, the other is the famous “Cosmic Center”, and Yongkang, which belongs to Jinhua, Zhejiang Province like Yiwu, is a low-key “Hardware Capital”.
30% of the world’s thermos cups, 80% of fascial guns, and nearly 70% of security doors… as well as all modern hardware products seen in daily life, almost all come from here.
Although there are no minerals, it has created an industry worth hundreds of billions by “forging iron”.
“China’s Little Dubai”, the number one county rich in wealth in Zhejiang.
If a foreigner suddenly walks into Yongkang, he will almost be forced to reshape his imagination of a “fifth-tier small city”.
In the county-level city with the largest number of luxury cars in China, not only luxury cars can be seen everywhere on the roadside, but also all kinds of Rolls-Royce, Lamborghini, Porsche, and even online ride-hailing companies have the opportunity to open a BBA-level blind box.
What these cars have in common is that they all bear the “Zhejiang G” license plate.
Even though the number of 4S stores in county-level cities is very small, they have formed a cluster in Yongkang.
In addition to cars, Yongkang is affluent. Just by looking at the housing prices, you can tell that people are ruthless and don’t talk much. It is truly one of the “Zhejiang ceilings”.
The average price of new houses in Yongkang urban area is close to 30,000 yuan per square meter, and the average price of second-hand houses exceeds 25,000 yuan per square meter. The total price of an ordinary residence can easily reach millions, which is second only to Yiwu and Cixi among county-level cities in Zhejiang.
It may not be outstanding in the eastern coastal cities, but such housing prices have surpassed many provincial capital cities in the central and western regions.
For example, Chengdu and Chongqing, one is the economic center of the southwest region, and the other is a popular municipality for enterprise relocation, they also rank behind Yongkang in terms of housing prices.
With such housing prices, the wealth of Yongkang people is among the best in the country.
In 2024, Yongkang’s per capita GDP has risen to 134,119 yuan, equivalent to 18,832 U.S. dollars. Not only is it far higher than the national average, it can even be said to have touched the threshold of developed countries. The strength of the people’s wealth is evident.
At the same time, the growth rate of per capita disposable income of all residents ranks first in Jinhua City, and the urban-rural income ratio is around 1.71, which means that Yongkang is not only “rich” in terms of total amount, but also has a level of common prosperity.
Not only is Yongkang, a city with many luxury cars, high housing prices, wealthy people, and a small place, there are 12 companies with a tax payment of more than 100 million yuan a year, and 60 companies with a tax revenue of more than 20 million yuan (2023).
What supports all this wealth is Yongkang’s hardware industry.
In 2024, Yongkang’s total industrial output value will reach 104.8 billion yuan, a year-on-year increase of 7.7%. Among them, the annual output value of the hardware industry will exceed 100 billion yuan, accounting for more than 90% of the city’s total industrial output value and accounting for more than 80% of the city’s GDP.
As the only “world-class hardware industry cluster” in the country, and one of the “top three global power tools” together with Japan and Germany, Yongkang has a permanent population of less than one million, but nearly 10% of the people are “hardware industry managers”, large or small. It has gathered more than 30,000 hardware companies, 140,000 hardware manufacturing market entities, and more than 400,000 employees.
It can be said that “all employees are hardware”.
The industrial resources in the county are often backed by mountains.
However, in contrast, there are almost no metal mineral resources in Yongkang.
The geographical conditions of “seven mountains, one water and two fields”, not to mention there are mines in the ground, even arable land is extremely scarce, so being able to grow into the “Hardware Capital of China” is a necessity for survival in the farming era.
In the small-scale peasant economy, areas without sufficient arable land must develop either by relying on ports or relying on technology.
The skill of “forging iron” is the “iron rice bowl” for Yongkang people.
Yongkang was able to produce crossbows in the Han Dynasty, iron swords in the Jin Dynasty, and copper and iron locks in the Yuan Dynasty were listed as tributes. Thousands of years of craftsmanship have never been interrupted.
In order to make a living, Yongkang’s “hardware dealers” walked around the streets, repairing pots, forging iron, and repairing locks all over the country.
The long-term working life of Yongkang people has also allowed Yongkang people to complete three major primitive accumulations: first, they have cultivated exquisite hardware skills and formed a craftsman culture passed down from generation to generation; second, they have understood the market demand and established the earliest industrial model; third, they have found the solution of “making iron without ore”.
Scrap iron and copper ware across the country are the “invisible minerals” of hardware manufacturing.
In the early years, we could always hear the call to collect scrap copper and iron in the streets and alleys. Many of these large pieces of recycled hardware became resources flowing back to Yongkang.
After decades of development, Yongkang has formed a specialized division of labor of “one village, one product, one township, one industry”. For example, scales are generally concentrated in Huku, files are mostly concentrated in Gushan, and power tools are concentrated in Guli, forming a whole industrial chain system including raw material smelting, parts processing, finished product assembly, and logistics sales.
In addition, Yongkang is only 50 kilometers away from Yiwu and 200 kilometers away from Ningbo-Zhoushan Port. High-speed rail and high-speed networks are also accessible in all directions.
Relying on Yiwu’s global business network, Yongkang Hardware is rapidly spreading across the country. Currently, in the hardware category of Douyin e-commerce, the number of Yongkang merchants accounts for almost half, especially in categories such as smart door locks, thermos cups, and power tools, which have dominated the sales list all year round. In 2024, its city-wide express delivery business volume reached 871 million pieces.
Ningbo Port provides a more convenient channel for Yongkang’s products to go overseas.
The rise of cross-border e-commerce has given Yongkang companies the opportunity to directly reach overseas consumers. In the same year, the export volume of Yongkang hardware industry also reached 38.257 billion yuan, a year-on-year increase of 20.3%.
Although Yongkang hardware industry has reached the top level in the country, its business is also highly dependent on foreign trade. Export is the core driving force for industrial growth, which also causes the industry to be greatly affected by the international economic environment and trade policies.
However, Yongkang’s hardware industry still has its core advantages – a complete industry chain cluster and a keen sense of trends.
Before the popularity of e-commerce, the sales of Yongkang Hardware were highly dependent on the offline wholesale of China Technology Hardware City and the offline channels of dealers. It was difficult for small and medium-sized enterprises to directly reach end consumers.
If e-commerce is like a big river that gathers the flow of countless industries, then Yongkang is the “pawn crossing the river”, always moving forward to catch up with every wave of trends.
In order to follow the market trend and ship large quantities of products in a short period of time, the industrial belt itself also needs to have the ability to move from large-scale production to flexible customization.
After all, the traditional hardware industry is dominated by large-scale standardized production, while consumer demands in the e-commerce era are becoming more and more personalized and fragmented.
The e-commerce platform’s small-batch and multi-batch orders, as well as the “market demand-driven products” model, require companies to have rapid response capabilities. Yongkang’s complete industrial cluster can exactly meet such needs.
Jiangsu, Zhejiang and Shanghai have the best supply chain resources for hand power tools in the country.
Yongkang and Yuyao in Zhejiang and Qidong in Jiangsu are known as the “three major manufacturing bases” of China’s power tools. They are the first places in China to form a large-scale power tool industrial base.
Mutual supply between adjacent industrial zones maximizes Yongkang’s “purchasing” costs and response speed in the supply chain.
In recent years, there is a famous saying in the domestic consumer circle that any consumption can be done again.
And Yongkang is also the place where all the conditions for “remaking” are gathered. Any hardware product that has become popular on the market will be remade by Yongkang.
For example, if outdoor sports suddenly become popular, a hardware factory that originally made wrenches will immediately open or borrow a production line to make outdoor flashlights; a factory that originally made clothes drying sticks will immediately search for resources and start investing in the production of popular products such as hiking poles and outdoor tent brackets.
The high-priced outdoor products sought after by the urban middle class have once again become a “cash cow” in Yongkang, sweeping across the countryside in the form of low-priced white-label products.
As long as you are fast enough, you can make this wave of money.
And Yongkang people are very smart, and they also know the way to “make quick money, you must stop when it is good” – when a suitable product with a large profit margin appears, or even just get some information about it, they will immediately “capture” it and join the competition; and when the product no longer has suitable profit margins or is in danger of losing money, they will quickly close the production line, take the quick money they earned, and turn around to look for the next “exploding” new product, thus forming Yongkang’s “wave economy.”
You can say that only low-end products can be produced quickly, but there are always sinking groups who choose not to buy big brands.
The mainstream view is often discussing how white labels should become brands.
In particular, the hardware industry in the county-level market is not attractive enough for high-end R&D, design, brand operation and other talents. At the same time, young people’s willingness to work in traditional industries is getting lower and lower. Many factories are facing “a gap in front-line technical workers.”
These are all bottlenecks that restrict the high-end upgrading of the industry.
But at the same time, it is undeniable that the mass market, especially the more low-key “county consumption”, will always need white labels.
In other words, there are always white brands that do not need to become brands. Even if one becomes a brand, it will drive the industry to add more white brands.
After all, there is no absolute distinction between high and low business strategies. Some people will do “slow” brands, while others will do “fast” business, but the way of “chasing the wave” is different.
Most of the factors that determine the industrial height of a region are natural resource endowments, and a small number of them have taken advantage of the opportunity. At present, the rise of various domestic outdoor economy, smart home and other emerging tracks are “creating wealth” in Yongkang one after another.
