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Key barriers to entry into the ventilation industry

Key barriers to entry into the ventilation industry


Key barriers to entry into the ventilation industry

The upstream of the indoor ventilation system industry includes raw materials such as steel, plastic and electronic components; the downstream is mainly used in residential, office buildings, shopping malls, restaurants, subway stations, railway stations, factories, hospitals, schools, etc. Indirect sales or direct sales to real estate developers, engineering contractors, installation companies, consumers and other end customers.

(1) Technical barriers

The indoor ventilation system industry has put forward higher requirements for technology research and development and industrial design strength, product line perfection, product application scenario solution capabilities, etc., and has higher requirements for product operation reliability; With the continuous improvement of environmental protection requirements, the requirements of products in terms of energy consumption, efficiency, noise and other performance indicators are also getting higher and higher. Enterprises need to continue to carry out technology research and development, new product development, and new application scenario development to meet the needs of market competition, and at the same time maintain a sustained and large market sales scale and channel management capabilities to collect customer feedback on the company's products and technologies, and then to Technology and products are continuously improved. In the absence of R&D strength, technical reserves, and sales scale, it is difficult for new entrants to comprehensively master and continuously improve industry technology and process essentials through technical research in a short period of time, and face certain barriers.

(2) Financial barriers

The production process of indoor ventilation system products involves multiple production and processing procedures, and requires a variety of machine tools and equipment. The key equipment has a direct impact on the quality of the product. Enterprises need to invest a lot of money to update and maintain the production equipment to maintain the normal production and replacement of products; On the other hand, in order to meet the needs of the market and enterprise development, enterprises need to continuously invest in expanding production scale. New enterprises need large-scale capital for construction investment, which constitutes a capital barrier.

(3) Brand Barriers

Brands that entered the indoor ventilation system industry earlier have been deeply recognized by consumers and are more likely to be favored by the market. In addition, construction contractors usually have strict standard requirements when choosing matching indoor ventilation system products. Considering factors such as product life and follow-up maintenance services, they prefer to use previously cooperated, market-proven and reliable brands. At present, there are many mature brands occupying a certain market share in my country, and new entrants will face certain brand barriers.

(4) Channel barriers

The industry is mainly based on the distribution model, and enterprises need to build and continuously improve the sales channels that are mainly distributors and cover terminal outlets during the development process. At present, the competition in my country's indoor ventilation system industry is fierce, and enterprises have a more stable cooperative relationship with long-term partners. Re-selecting a new brand for dealers means affecting the cooperative relationship with the original brand, which is not conducive to the stability of supply. Therefore, new entrants in the industry need more favorable conditions and more market-competitive products to establish and expand sales channels, and the barriers to new entrants are high.

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