08
2018
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05
Looking at Domestic Demand Changes Through the Return of Jinlong Electric Machinery
Zhejiang Jinlong Motor Co., Ltd. is the leading enterprise in our city's motor industry and also one of the earliest domestic companies to export motor products. Once upon a time, Jinlong's electric products were exclusively geared toward foreign trade, with exports accounting for more than 95% of its total output.
Our reporter, Zhou Lili
Zhejiang Jinlong Motor Co., Ltd. is the leading enterprise in our city's motor industry and also one of the earliest domestic companies to export motor products. Once upon a time, Jinlong's electric products were exclusively geared toward foreign trade, with exports accounting for more than 95% of its total output. Yet today, Jinlong Motor is once again optimistic about the domestic market. What does this signify?
Once forced to flee
In 1997, due to the domestic sales market's severe downturn affecting the production of small household blowers, Jinlong Company, like its domestic peers, mercilessly plummeted into an abyss.
“In just a few short years, most companies were racking up heavy losses. But since these weren’t companies they had invested in themselves, many organizations found themselves deeply entangled in mutual debts—situation after situation.” Ye Jinwu, Chairman of Jinlong Company, still recalls those days with vivid clarity.
It was also from that year onward, due to the domestic issue of "triangular debt," that Ye Jinwu began actively exploring international markets.
Ye Jinwu recalls that when he first took over the company, the finance department couldn't even afford travel expenses of more than 1,000 yuan. It was only after he used the 300,000 yuan he earned from selling his personal home that the enterprise finally had its initial startup capital—enabling it to introduce equipment and train technical personnel.
Today, under the leadership of Ye Jinwu, Jinlong Electric Motor has established its own national brand—Jinlong-brand motors—which have earned widespread acclaim both domestically and internationally, positioning the company as a leading exporter in China's electric motor industry.
Returning to the domestic market
While thriving smoothly in overseas markets, Jinlong Company decided in 2012 to expand its operations back home. Within just a year or two, it successfully built a strong reputation in the domestic market.
Ye Jinwu told the reporter that in the early years, their company’s products were almost exclusively for foreign trade. Now, about 40% of their products are sold domestically, "and this sales ratio is still growing—plus, some of our products already hold one of the leading market shares in China."
Why can a company that’s long been involved in international trade quickly adapt to the domestic market environment?
“First of all, the domestic business environment has already changed significantly.” Ye Jinwu, president of the Luqiao Electromechanical Association, deeply resonates with this observation. “In the electromechanical industry, delayed payments used to be quite common, and the bad-debt rate was also high. But now, many of our products enjoy relatively short payment cycles, and we hardly face any ‘triangular debt’ issues anymore.”
The domestic high-end motor market is enormous.
In addition to the increasingly favorable business environment domestically, the robust demand for high-end motor products in the domestic market is another major reason behind Jinlong's return.
“Domestic markets may not lack competition, but if your product can do what others can’t, then it’s bound to succeed,” Ye Jinwu admitted. Over the years, China’s motor industry has continued to expand, leading to fierce competition—so much so that price wars have even spread into the export trade sector.
“An enterprise can’t possibly do everything—and succeed at it all,” Ye Jinwu said. He added that they’ve shifted their export strategy away from focusing on mid-to-low-end products, even choosing to let go of this segment of customers, and are now concentrating solely on high-end motor products. Similarly, in the domestic market, they’re not aiming to open the “door” with mid-to-low-end offerings—they’re instead targeting only energy-efficient, high-performance, premium motors.
Ye Jinwu believes that it is precisely because the company recognized the enormous business opportunity in low-energy-consumption motor products and took the lead in developing highly efficient, energy-saving specialty motors that the company has gained the capability to compete successfully in both domestic and international markets. "The domestic market has entered a new phase—no longer characterized by persistent supply shortages, but instead demanding higher-quality products. Moreover, with the mandatory implementation of motor energy-efficiency labeling, the natural selection process in the market is becoming more pronounced, while industry entry barriers continue to rise. As a result, we believe that price competition will gradually lose its influence in the near future."
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