Introduction: Puncture the illusion of the industry
"We engage in resistors and capacitors, customers only look at the parameters and price, didn't care the branding. This is probably one of the biggest cognitive traps recognized by passive device manufacturers! When Yageo obtains a gross profit margin of more than 35% in the high-end market with its technology accumulation and certification advantages, and your products can only compete at a price of $0.01 per piece on Ali International Station, you have already lost this battle to go overseas. Has the sheer low-price strategy long since come to an end? China Exportsemi will explain the reason:
1. Why is branding the key to success in the next 5 years?
2. How did three Chinese companies successfully counterattack through low-cost strategies?
3. Attached brand power self-test tool (see at the end of the article)
Ⅰ The status quo of the industry: the hidden cost of collective misjudgment
Wrong 1: Customers only look at parameters? The voice of the market behind the data
Data note: According to the 2024 Supplyframe Global Supply Chain Report, around 65% of buyers prefer brands with well-supported technology and detailed documentation in the actual decision-making process, rather than relying solely on the lowest price.
Case Supplement: Taking MLCCs of the same specification as an example, although the quotation of Yageo's products is about 15% higher than that of some unknown brands, Yageo is still the first choice of Tesla's Tier 2 suppliers due to its stable technical advantages and reliable documentation support (data source: Future Electronics' 2023 Q3 quotation). This phenomenon suggests that customers are paying more and more attention to after-sales technology and services in addition to initial price sensitivity.
Figure: Do passive devices need a brand? 90% of enterprises mistakenly regard "Ali International Station" as the endgame of marketing
Wrong 2: Ali International Station - Marketing Entrance or Trap?
Analysis of the current situation of the market:
In Ali International Station, there are more than 100,000 search results for "0805 10μF 50V", but the accumulation of a large amount of information on this platform can easily lead to a fierce price war, and the industry is generally faced with the dilemma of "low-price competition cannot be sustained".
With the upgrading of the procurement decision-making process, from the selection of engineers, price comparison, to the review of supplier qualifications (such as official website certification and technical white papers) by the compliance department, a single reliance platform can no longer meet the comprehensive requirements of customers for quality and service.
At the same time, the requirements of different market segments (such as automotive-grade products and ordinary consumer products) are different, and some companies can obtain orders in the low-end market under the dependence of the platform, but in the field of high-end products, brand strength and technology precipitation are more critical.
Ⅱ Branding: multiple reasons to get out of the price war
1. Get rid of the limitations of price wars and build technical barriers
Case reproduction: A capacitor manufacturer quoted at a very low price (such as $0.01 per capacitor) on Ali International Station, but there were few inquiries; After building its own website, updating its technical blog and publishing a white paper, its gross profit margin increased from 5% to 27%, and the number of customer inquiries increased by more than 200%.
Supplement of economic data: During the economic downturn, some survey data shows (SEMI report) that the order volatility of brand enterprises is 30% lower than that of unbranded enterprises, which brings risk hedging to enterprises to a certain extent.
2. Enter the high-end supply chain and achieve a qualitative leap in the market
The unspoken rules of car companies are revealed: Volkswagen, BYD and other automakers are constantly upgrading their requirements for suppliers, not only asking for price advantages, but also paying more attention to the "White Paper on the Reliability of Automotive-grade Capacitors" and other technical proofs.
Case description: An inductor company successfully entered Nokia's supply chain within six months, and the order volume exceeded 5 million US dollars. This is also reflected in the release of the "Guide to the Application of High Frequency Inductors in 5G Base Stations", which demonstrates how companies can upgrade their channels and diversify their revenues by building trust through branding and professional content.
3. Acquisition and integration dividends, technology precipitation to increase valuation
Industry M&A facts: PwC's M&A report pointed out that in 2024, in the M&A cases in the passive device field, companies with deep technical precipitation and brand endorsement will generally have valuations 2-3 times higher than their competitors.
Tips: Although the data here is representative, enterprises should combine their own positioning in the process of transformation, and should not simply pursue M&A dividends, but should steadily improve product technical capabilities and brand influence.
Ⅲ Low-cost branding: a practical guide for poor factories to counterattack
Path 1: Establish a professional image with technical content
Refined operation: A resistor manufacturer publishes technical questions and answers every day, answers questions such as "precision resistance temperature drift control" in professional forums (such as EETimes and Zhihu), obtains more than 200 overseas inquiries within 6 months, and promotes the conversion rate of factory inspection to reach 35%.
Tip: Publish content with detailed background and real-world test data to be more persuasive.
Path 2: Build industry trust with free tools
Case update: A capacitor company independently developed and launched the "MLCC Failure Mode Online Detection Tool", which was completed by one engineer within two weeks; The tool's page contributes 40% of the organic traffic to the website, and 15% of its users become stable customers.
Optimization reminder: The principle and applicable conditions of the tool should be explained to the target user group when the tool is launched, so as to avoid doubts due to uneven use effects in different environments.
Path 3: Focus on market segments and precise penetration
Segmentation strategy: An inductor manufacturer sponsored the "National College Student Open-Source Hardware Competition", which not only made a low investment (such as $5,000 prizes and free samples), but also successfully prompted more than 200 engineers to use its products for the first time, and facilitated large-scale purchases from 3 start-ups.
Suggestion: When choosing a sponsored event, enterprises should carefully research the target market group to ensure that the activity matches the company's positioning, so as to cultivate core customer resources in the long term.
Ⅳ Avoid pitfalls: less detours of brand building experience
✅ What to do:
Focus on a single category: For example, "automotive-grade SMD capacitors", 80% of the content on the homepage of the official website focuses on this field to enhance professional recognition.
Standardized content output: Regularly publish technical white papers and application notes supported by measured data, and update them regularly on a quarterly and monthly basis to form long-term content assets.
Binding industry activities: Choose to sponsor or participate in professional events such as IEEE conferences to enhance the brand's authority in the engineering community, and the effect is far more than blindly placing mass advertising.
❌ Avoid:
Blindly relying on low-end platform advertising: For example, Facebook advertising has limited effectiveness in some regions, especially overseas engineers often rely on professional channels rather than social platforms to obtain supplier information.
Pay only attention to the accumulation of ISO certificates: It is recommended to shift the focus to the display of customer application cases, such as the real case behind the "5 million orders of a medical equipment manufacturer", so that potential customers can directly feel the advantages of the product.
Ignore the long-tail keyword strategy: When optimizing the content of the official website, pay attention to both generic words and market segments, such as "vehicle specification X7R 0805", to ensure that search engines can accurately target customers.
Ⅴ Action guide: test your brand power
▸ Brand power self-test tool
Does the independent official website have real content and not a mirror image of the platform? (+20 points)
Have you published detailed technical documents or white papers within the past year? (+30 points)
Do customers have a clear understanding of the core differences between you and your competitors when they visit the website? (+50 points)
Enterprises with a score of less than 60 points are recommended to immediately pay attention to and contact the editorial department (china.exportsemi@ehaitech.com) of China Exportsemi to download: "Upgraded Passive Device Brand Power Self-Test Tool", and access to the latest one-stop digital marketing solution for Yeehai Global, the parent company of China Exportsemi.
Conclusion
When some peers still adhere to the low-price platform competition strategy, branding has become an important means to jump out of the red ocean and enhance the long-term competitiveness of enterprises. If you don't add to your technology and image today, you may lose the opportunity in the high-end market tomorrow. Enterprises should choose the appropriate brand building path according to their own positioning and market segmentation to lay a solid foundation for future development.
statement
Data sources: All data cited in this article is from public reports, industry analysis, or corporate earnings reports and is clearly attributed to the source. For further verification, please contact the relevant institution or consult the original literature.
Case description: The cases in this article are all real events or typical practices in the industry, and some enterprise names have been redacted to protect corporate privacy. The specific implementation details and results are for reference only and do not constitute specific business advice.
Applicability of recommendations: The recommendations provided in this article are based on current industry trends and general practices, and are suitable for small and medium-sized enterprises. Before implementation, please evaluate your actual situation and consult a professional consultant.
Disclaimer: The content of this article is for informational purposes only and does not constitute any legal, financial or business advice. The author and the publishing platform are not responsible for any risks or losses arising from the implementation of the recommendations herein.
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