Lessons to be learnt from Chinese dominance in ceramics industry

Lessons to be learnt from Chinese dominance in ceramics industry

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No doubt Foshan Cluster has contributed substantially to China's ceramic industry and its growth and in fact, it is the backbone of the China's ceramic industry today. Apart from cluster approach some carefully adopted strategies too contributed to the growth of the industry

China is the largest producer and exporter of ceramic tiles and this feat has been achieved in less than two decades. Though Chinese exports of ceramic tiles is shrinking in recent years, its sheer size which is far outstripping others still makes it a predominant player in the global ceramic industry.

It was the cluster approach which helped China to achieve this disticntion in the global ceramic industry where today it accounts for nearly half of the production. There were several factors which contributed to its dominant position.

No doubt Foshan Cluster has contributed substantially to China’s ceramic industry and its growth and in fact, it is the backbone of the China’s ceramic industry today. Apart from cluster approach some carefully adopted strategies too contributed to the growth of the industry.

China being the most populous country in the world it always had the advantage of cheap labour, a factor which has started diminishing in its influence in recent years. Further, large population didn’t mean just availability of large and cheap labour but also ensured abundant supply of entrepreneurs. Large pool of entrepreneurs ready to take risks and venture into new fields helped China to move beyond its traditional industries.

For Foshan ceramic manifacturers there was gorwing real estate market whose insatiable needs ensured that whatever you produce will be consumed. Further, there were cities being developed/redeveloped around the clusters which also ensured steady demand. Further, there was Beijing Olympics in 2008 which also accounted for substantial demand for the ceramics among other materials. Above all, its ability to produce at competitive price meant that its products could penetrate any  market in the world. And the ceramics manufacturers showed that decisively during last two decades.

In a shrewd move, Chinese government not only encouraged the local entrepreneurs to produce ceramic tiles but also the machineries required to produce them. So Chinese entrepreneurs started producing machines required for tiles making at home,  copying those developed in the Sassuolo district in Italy, which indirectly contributed producer-driven value chain.

Chinese government encouraged not only production of tiles but also helped in its marketing and that too aggressively. Thus, unlike in case of Italian ceramic makers, China followed a different pattern of channel of distribution, building materials supermarkets or state exhibitions which became important channel for Chinese producers to sell their products.

Though China might have overtaken Italy in production of ceramic tiles and became the world’s largest producer of tiles, still ‘Italian Made’ tag stands for superior quality which none of the Chinese manufacturers can match. This is the price China had to pay for overemphasising quantity over quality which in the long run may prove very costly. Above all, Italy enjoyed the first mover advantage which it even today holds on to and this advantage has helped to build the brand Italy in ceramics (both products and machinery) over the years despite losing the tag of world’s ‘largest tiles producer’.