In recent years, the development of hardware power tools has been rapid, yet they still lag behind foreign counterparts in terms of technological advancement. For the industry to keep up with global trends, innovation and technology are key. As a high-tech sector, the power tool industry demands continuous technological upgrades. Companies must actively invest in research and development to strengthen their competitive edge. Power tools play a crucial role in advanced manufacturing sectors such as aerospace, high-speed rail, shipbuilding, automotive, construction, renovation, woodworking, and metal processing.
The global power tool market can be broadly categorized into three segments: industrial, professional, and DIY household. Industrial-grade tools are designed for high-precision applications and environments with strict safety and environmental standards, such as aerospace. These tools are characterized by high technical complexity, higher profit margins, and a more limited market. On the other hand, DIY tools are used in less demanding scenarios like home repairs or simple renovations, where performance requirements are lower, and the market is highly competitive due to low entry barriers and price sensitivity.
Currently, most Chinese manufacturers focus on producing DIY-level power tools, relying heavily on cost as a competitive advantage. This has led to a saturated market with low-profit margins and intense competition. In contrast, professional-grade power tools offer greater value, with higher power output, longer motor life, and superior durability. They cater to a broader range of industries, have higher technical content, and are associated with stronger brand equity and higher profit margins.
Despite this, China's domestic power tool market remains dominated by international brands like Bosch (Germany), Makita (Japan), Hitachi (Japan), and DeWalt (USA). However, recent trends show a decline in the market share of foreign brands, with local players like Ruiqi making significant strides. Ruiqi has rapidly gained ground, becoming one of the top four in the domestic market within just seven years of its launch. It is now seen as a strong contender that could potentially challenge long-established brands like Bosch and Makita.
Looking ahead, the domestic power tool industry is expected to undergo consolidation, with a few leading companies shaping the market. The gap between domestic and foreign brands will continue to narrow, with Chinese brands gradually replacing imported ones. Industry leaders will play a crucial role in driving integration and standardization. As the only publicly listed company focused primarily on power tools, Ruiqi is well-positioned to leverage its capital market presence to drive restructuring and growth in the sector.
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