Article from NNA ASIA website on July 14, original title: "Qigao Motor dares to 'challenge' a huge market, and wins survival through independent management." Faced with China's vast market, the small and medium-sized enterprise Qigao Motor, headquartered in Tottori Prefecture, Japan, and with a branch in Shenzhen, China, which produces home appliance OEM (Original Equipment Manufacturer) products, has not chosen to enter the Chinese home appliance market. Instead, it continues the model of "producing in China and exporting to Japan," maintaining an appropriate scale of operations. The company believes that China remains the main battlefield for global home appliance production, and establishing and succeeding here is the key to stable business operations.

In the early 21st century, Japanese companies rushed to enter China, taking advantage of the low labor costs to produce export products at low prices, forming a typical business model. Long before 1995, the company had already started its home appliance OEM business in China, producing electric kettles and rice cookers for well-known Japanese home appliance manufacturers, with 80% of the products exported to Japan.

In recent years, the company has continuously achieved stable growth in performance by promoting reforms such as "internalization of business" and "production automation." In 2022 and 2023, the company set historical high sales figures for two consecutive years. Compared to ten years ago, sales have increased by nearly 60%. Moreover, the business of exporting to Japan has developed "extremely steadily," and the company tries to keep the growth and decline in sales within 10%. A company staff member, Masahiro Sakaguchi, emphasized that for small and medium-sized enterprises, pursuing "not too much up or down" stable operations is crucial.

Regarding whether it will continue the business model of "producing in China and exporting to Japan" in the future, the company believes that China remains the "main battlefield of global home appliance manufacturing." Currently, more than 70% of the world's home appliances are produced in China. For companies to survive in this industry, they must establish themselves firmly in China. The main enterprises in the home appliance industry almost all produce in China, especially concentrated in the Pearl River Delta area of Guangdong, known as the "world factory."

Although labor costs in Southeast Asia and other regions are lower, in terms of the convenience of purchasing raw materials and parts, they still cannot surpass China. Even if companies move their production bases to Southeast Asia, they still need to purchase raw materials and parts from China, and the logistics costs offset the advantages of saving on labor costs. Sakaguchi believes that leaving China would bring many adverse effects to the company.

In addition, Sakaguchi also said that because the main enterprises in the global home appliance industry are concentrated in China, even if labor costs rise or raw material prices soar, all enterprises face the same environment. Therefore, the company will continue to fight in this "battlefield" and strive to stand out. (Translated by Liu Yating)

Original article: https://www.toutiao.com/article/7527475126787555892/

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