The factors that used to support the development of Shenzhen Huaqiangbei are disappearing or weakening, coinciding with a downturn in the industry cycle and the international industrial chain relocation. Huaqiangbei is facing bottlenecks in its development. The shortcomings of Huaqiangbei are mainly the prevalence of small enterprises, severe homogenized competition, and weak overall strength. The favorable development direction for Huaqiangbei is to expand outward and actively participate in international competition. The outward-oriented economy needs to be measured by GNP, which refers to the Gross National Product, consisting of the Gross Domestic Product (GDP) plus net factor income from abroad, mainly including overseas income such as capital, technology, management, and labor remuneration. It is a part of international division of labor and interest distribution, and also a characteristic of internationalization. This is suitable for the industrial endowment and product characteristics of Huaqiangbei. The bosses of Huaqiangbei often refer to me, Shiqiang Sang, and the founders of Lichuang Mall, Brother Bo, and the President of the Electronics Chamber of Commerce, Yimu Cheng, as the three talented individuals of Huaqiangbei. They say that our shining bald heads are the lighting lamps of Huaqiangbei. I'm racking my brains to think of ways, hoping that the following content will be useful to everyone!

Slkor Store on Alibaba International Station

Shenzhen Huaqiangbei has an inherent international DNA. It is essentially a world-class hub for electronic information hardware and a crucial node in the global semiconductor industry chain. Its supply chain spans across the globe, and it has extensive connections with foreign countries in various aspects. Electronic components have the characteristics of small size, high value, precise matching of models, applications, parameters, and convenient storage, transportation, and testing. The industry and product standards in Huaqiangbei are highly internationalized and standardized. While the previous service scope of Huaqiangbei was limited to China, now and in the future, it can serve Southeast Asia and even the whole world. Professor Akita from Kanazawa University in Japan always visits Huaqiangbei whenever he comes to China to understand trends and explore new products. He stays in Guanlong Village, Xili, because there is a direct bus to Huaqiangbei. Foreigners from India, the Middle East, Mexico, etc., often shop on Taobao in Huaqiangbei for their personal use. There are also "foreign backpackers" who rely on Huaqiangbei for their livelihoods!

European Clients Talked about Cooperation with Kinghelm and Slkor

We are learning from Japan and South Korea, as their past challenges were similar to ours. Uniqlo's CEO, Jingzheng Liu, shifted the company's focus to overseas markets early on, hedging against the "low-desire market" in Japan and avoiding the "Lost Two Decades." In the past few years, Uniqlo had 866 stores in the Greater China region, surpassing its 813 stores in Japan. I came to know Uniqlo because of the "pa pa pa" incident and later started shopping at Uniqlo in Huaqiangbei. Japan Mabuchi Motor Corporation, a world-leading company in the field of direct current micro motors, ceased production in Japan in 1990 and relocated its factories overseas, primarily in mainland China. Currently, Mabuchi Motor's headquarters only has over 800 employees, while around 23,000 are based overseas, with all production, processing, and marketing taking place abroad.

Huaqiangbei has witnessed the development of smartphone manufacturers such as Transsion, G5, and OnePlus, who have made remarkable progress in expanding their overseas markets. Transsion Holdings (688036.SH) published its interim report for the first half of 2023 on August 28th, with operating income reaching 25.029 billion yuan, an increase of 8.31% compared to the previous year, and net profit of 2.102 billion yuan, a growth of 27.10%. Transsion smartphones are highly popular in Africa, and one of their selling points is the use of AI beauty technology in mobile photography, enhancing the appearance of African friends in their photos. The brands and products of Kinghelm (www.kinghelm.net) and Slkor (www.slkoric.com) have also experienced remarkable internationalization in the past two years!

Introduction to Slkor Semiconductor Silicon Carbide Expert

The fourth international industrial chain transfer has arrived due to technology, market, policies, labor advantages, geopolitics and other factors. Shiqiang Sang believes that Shenzhen Huaqiangbei is a crucial node in the internationally renowned electronic component industry chain that has been formed over many years. It can enhance its advantages in product variety and channel penetration and actively follow the shift of the industrial chain to provide services. The majority of customers in Huaqiangbei are small and medium-sized enterprises engaged in hardware research and development and manufacturing, which form a long-tail market that will exist worldwide for a long time. The supply chain, through information integration, trust verification, channel distribution, quality certification, price competition, emotional communication, risk control, legal affairs, cultural identification, strength confrontation, payment and delivery, and profit distribution, has been refined and accumulated over many years. Although it may seem insignificant, it is crucial for manufacturing enterprises. Just look at Apple's emphasis on the supply chain to understand its importance. Currently, there is no market in other countries or regions that matches the scale and comprehensive strength of Huaqiangbei. Therefore, Huaqiangbei should seize the opportunity to internationalize.

Huaqiangbei also needs to enhance its own strength by continuous learning and micro-innovation, striving to excel and specialize in certain areas. Only when every small enterprise becomes strong can the overall strength of Huaqiangbei be enhanced. Currently, Japan has approximately 4 million companies, many of which have fewer than 10 employees. Germany has a large number of small and medium-sized enterprises with high-precision and cutting-edge technologies, positioned like diamonds on the manufacturing industry chain, which has helped Germany become a world leader in precision machinery and smart manufacturing. Huaqiangbei's complete range of products and abundant but dispersed information bring opportunities for the development of a refined and specialized supply chain.

The biggest challenge for Huaqiangbei is the fourth major transfer of industrial chains. Taking Apple's iPhone and Tesla's electric vehicles, as well as the beneficiaries Vietnam and Mexico as examples, let's analyze comprehensively!

Slkor Homepage on Alibaba Platform

Vietnam, India, Cambodia, Indonesia, the Philippines, and other countries have taken over a large portion of low-end manufacturing capacity, including that of China. In recent years, Apple has continuously shifted its supply chain to Southeast Asian countries, forcing Chinese companies like Foxconn and Lens Technology to follow suit and expand overseas. Losing Apple as a major customer has posed significant challenges for Ofilm. The enterprises in Vietnam's "Shenzhen-Hai Phong Economic Cooperation Zone," such as TP-Link, T&W, Longhorn, H&T, Tefa, and Tianlong, along with their secondary and tertiary suppliers, are customers of Huaqiangbei. Therefore, Huaqiangbei companies can ride on their coattails to venture into the international market.

Currently, Mexico has a population of 126 million, with an average age just over 29 years old and an average daily wage of 170 Mexican pesos (approximately 60 RMB). Similar to China during the early stages of reform and opening up, Mexico benefits from a demographic dividend. Due to the dispersed nature of automobile manufacturing, Mexico already had a foundation in the automotive supply chain due to its proximity to the United States. In the past two years, with Tesla's establishment of a new Gigafactory in Mexico, numerous Chinese automobile manufacturers and component companies have flocked to Mexico. Just like how Toyota established the "Lexus" brand in North America, China's BAIC, SAIC, Chery, and Chang'an have all set up factories in Mexico to avoid the protectionist policies in the US electric vehicle market. Supporting automotive component companies like Xinquan, Minth Group, Wanfeng Auto Wheel, Joyson Electronic, and Wencan have already started production in Mexico, while Xusheng Group and Tuopu Group are undertaking construction near the Tesla factory. A typical internal combustion engine vehicle requires around 20,000 components supplied by approximately 1,000 companies, which demonstrates the strong driving force of the industry chain. Although electric vehicles require fewer components, their increasing intelligence demands a large number of electronic components, providing more opportunities for Huaqiangbei companies.

Emerging industries bring about new markets abroad. "Carbon neutrality" and energy storage batteries have been hot topics in recent years. In 2022, the global shipment volume of energy storage batteries reached 142.7 GWh, an annual increase of 204.3%, surpassing the growth depicted in the TV drama Knockout portrayed by Songwen Zhang. Companies like CATL, BYD, and Sungrow Power from Ningde Times occupy 80% of the market share. Similarly, the semi-annual report of Goodwe reveals that 75.24% of its overseas revenue in the first half of the year mainly came from products like photovoltaic inverters and energy storage batteries. The core electronic components of inverters, such as IGBT and high-voltage MOS tubes produced by Slkor (www.slkoric.com), and high-voltage connectors and custom wire harnesses manufactured by Kinghelm (www.kinghelm.net), contribute to our economic benefits. In the future, emerging industries such as the metaverse, digital humans, and ChatGPT language models will rely on electronic components, which are products offered by Huaqiangbei. Seizing this opportunity, Huaqiangbei (Shiqiang Sang ) will produce a group of billionaires.

Slkor Shiqiang Sang on Huaqiangbei

The development of communication tools and the rise of internet trading platforms have brought convenience to remote coverage in the supply chain and also promoted internationalization. With tools like email, QQ, WeChat, TikTok, Facebook, Instagram, Twitter, as well as search engines like Google, Baidu, and Bing, information can be quickly and accurately connected. Virtual platforms such as HQBuy, Lichuang Mall, ICkey, IChunt, Digi-Key Electronics, Mouser Electronics, Elemo, etc., have created a virtual "Huaqiangbei" in the non-physical space. In addition to comprehensive platforms like Alibaba International, AliExpress, and Amazon, transactions can be supported worldwide. Information technology, digitalization, translation software, ChatGPT language model, etc., make it "So Easy" to sell products abroad. Brother Wei (not Viagra) is my friend who uses "iFlytek" translation software to arrange Pakistani employees to work and sell "Henglitai" products, as well as help me sell antenna connectors from Kinghelm. In order to promote Slkor and Kinghelm, we have dozens of overseas media platform accounts, mainly on Quora, Pinterest, Instagram, Medium, Twitter, YouTube, Blogger, Facebook, Reddit, LinkedIn. Articles and short videos about Kinghelm/Slkor-related companies, brands, and products have been published on more than 280 overseas media platforms, and the number is still increasing.

To improve brand influence and expand market share, we must keep up with the trends of new media, as attention and traffic become wealth. Slkor and Kinghelm Electronics have entered short video platforms like TikTok, opening up new perspectives for promotion and utilizing their viral elements to quickly and cost-effectively spread messages in large quantities. Southeast Asia and Huaqiangbei have close geographical proximity, and there are various intertwined connections between them. In 2023, the Southeast Asian e-commerce market had the highest growth rate globally for three consecutive years. When TikTok launched, it chose Southeast Asia as its first stop, which is enough to illustrate the strategic importance of this market. Therefore, it is a good approach to either use e-commerce platforms or leverage short videos to open up the market in Southeast Asia. We have posted a series of videos titled "Shiqiang Sang Talks", sharing learning, life, and work experiences and insights. These videos are published on platforms such as TikTok, Video Account, Bilibili, Little Red Book, YouTube, etc., and translated into various languages to share with everyone, achieving very good results.

Top 10 Countries with the Fastest Growing E-commerce Market Size, image source: eMarketer

Slkor (www.slkoric.com) actively explores overseas agent channels, and Shenzhen Mairuida (www.mrd-ic.com) Technology Co., Ltd. is doing the same. Mairuida has developed in Huaqiangbei and distributes and represents brands such as ADI, ALTERA, XILINX, Slkor, TI, STMicroelectronics, MAX, Kinghelm, etc., with customers all over the world. Fubin Huang, the general manager of Mairuida, said that Mairuida Technology can contribute to the international development of Slkor, helping more businesses choose products from Chinese semiconductor companies.

In the process of enterprises going global, the support of the government and industry associations is vital, especially for small companies like those in Huaqiangbei. They should provide a series of services such as cultural, language, religion, customs, legal, business, risk control, logistics, customs clearance, transportation, compliance, and talent development, enabling small and medium-sized enterprises to unite and cooperate. In particular, chambers of commerce should learn from organizations like the Japan Chamber of Commerce and the Wenzhou Chamber of Commerce in China! Of course, our companies are also striving and seizing every opportunity. Ligui Zhu from Luguang Electronics attended the FIEE Power Electronics Exhibition in Brazil last month; "DJSE Inductor," a company in Huaqiangbei, also participated in an exhibition in Vietnam. Mr. Zhou, the deputy general manager of DJSE, even wrote couplets in Vietnamese, which achieved cultural recognition. I believe their business will thrive. In April this year, Lei Wang from QCA Tech went to Russia for investigation, and many entrepreneurs from Huaqiangbei also went together.

                                               Ligui Zhu in Brazil      DJSE Shi Zhou in Vietnam                   Lei Wang in Russia

Huaqiangbei, which originated in Futian, has become not only the Shenzhen Huaqiangbei but also the Huaqiangbei of Guangdong and even China. With everyone's efforts, we hope that the future Huaqiangbei will become the Huaqiangbei of Asia, the Huaqiangbei of the international market, and eventually the Huaqiangbei of the world, continuing to contribute to the development of the industry, social progress, and the strength of our nation!

Biography of Mr. Shiqiang Sang

Mr. Shiqiang Sang is a researcher of private economy at the Economic Development Center of the State Council, a member of the electronic information expert pool of the China Association for Science and Technology, and an expert in Huaqiangbei business research. Mr. Song was the CEO of a listed international real estate company, and now he invests and manages Shenzhen SlkorMicro Semicon Co., Ltd. and Shenzhen Kinghelm Electronics Co., Ltd. (www.kinghelm.net). Both Slkor and Kinghelm are national high-tech enterprises, owning dozens of original invention patents and software copyrights. At present, Slkor is one of the Chinese semiconductor companies developing rapidly and steadily. The company's vision is to become the leader of semiconductor industry.

Mr. Shiqiang Sang, the General Manager of Kinghelm and Slkor

"With Kinghelm, BDS is connected”. Starting from the development of BDS GPS antenna, Kinghelm has developed and produced RF microwave antennas, RF jumper cables and electrical signal connectors to embrace the intelligent digital era of the Internet of Things. Mr. Song has a high reputation and influence in the semiconductor and BDS positioning and navigation industry. Mr. Song has been working in the electronics industry for many years and is constantly striving for a better business environment in Huaqiangbei, in the hope that Huaqiangbei will become a window of reform and opening up and a symbol of Shenzhen's economic development and continue its glory.