MRO, a vertical e-commerce platform for industrial products!

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How much do you know about MRO e-commerce? The rapid development of Internet technology has accelerated the transformation of China’s traditional industries, especially those that rely on information asymmetry to survive. An increasing number of industry structures have been disrupted by Internet technologies, and through the integration of big data, new platform models that combine traditional industries with the Internet have emerged. As global economic development and competition intensify, businesses and organizations around the world are forced to seek new ways to reduce costs and improve productivity. The current challenging economic environment also forces companies to achieve more with less input. 　　To this end, they need MRO industrial products procurement platforms similar to EasyPump Connect (www.epumps.biz) to help them save time, simplify processes, and improve operational efficiency. In the industrial sector, the Chinese market has just been opened up, and the prospects for MRO industrial products are very promising. 　　The rapid development of MRO in China is an inevitable trend. MRO is an abbreviation for the three terms maintenance, repair, and operation, referring to industrial supplies that are not of a production raw material nature. 　　MRO industrial product supermarkets originated in Europe and the United States; they are comprehensive distribution platforms that combine the display, retail, wholesale, maintenance, and information exchange of industrial products. Given the wide range of areas covered by MRO industrial products, the high demands for specialized technical skills, the large variety of products available, as well as the numerous links in the upstream and downstream supply chains, there are very high requirements for the operational capabilities of such platforms. At present, domestic MRO industrial product supermarkets are mainly online-based, and they are concentrated in regions such as the Yangtze River Delta, including Jiangsu, Zhejiang, and Shanghai. These areas have a well-developed industrial manufacturing sector, a large pool of technical talent, and advanced urban logistics systems, which makes them highly attractive to investors. 　　According to estimates, the procurement needs for MRO industrial products by Chinese industrial enterprises account for an average of 4% to 6% of those enterprises’ output value. In 2014, the output value of China’s secondary industry was 271,392 billion yuan. Well, by a conservative estimate, China’s MRO market size has already exceeded 1 trillion. 　　Nevertheless, there is a significant gap between China’s MRO procurement and management practices and those in developed countries. A survey on MRO procurement in the United States shows that MRO procurement accounts for an average of 26% of a company’s total procurement costs, with this figure reaching as high as 63% in some cases. The impact of MRO procurement on a company’s cost control and profits cannot be ignored. 　　China’s MRO industrial products go through numerous distribution stages, ranging from manufacturers, wholesalers in the place of production, wholesalers in the place of sale, retail stores to small and medium-sized enterprises. Typically, a product has to go through at least 4 or 5 layers of transactions. This lengthy sales chain prevents direct communication between manufacturers and products, leading to a lack of effective collaboration. As a result, small and medium-sized enterprises struggle with opaque pricing, while manufacturers face issues related to inventory buildup. At the same time, due to the long-term chaos in China’s industrial products market, producers and distributors often use information asymmetry to shift risks in order to avoid them, resulting in severe problems with overdue financial payments. 　　MRO Industrial Products Online Supermarket addresses the key issue of information asymmetry between upstream and downstream parties through its e-commerce platform and advanced technological systems. Coupled with a comprehensive logistics management system and supporting services, it resolves the four major problems associated with industrial product procurement: opaque pricing, low procurement efficiency, inability to ensure authenticity of products, and inability to guarantee on-hand availability. 　　In 2000, the Sugimoto (China) online industrial products procurement platform, established by Japan’s Sugimoto Company, was set up in Shenzhen, China. In 2004, Xiyu Electromechanical Systems Co., Ltd. (Xiyu) was established in Shanghai. Leveraging a mature supply chain system, professional expertise, and financial support, Xiyu provides Chinese customers with hundreds of thousands of types of MRO industrial products and instrumentation. In June of the following year, Goanjet (China) was established in Shanghai. Grainger is a global leader in the distribution of industrial products for equipment maintenance, repair, and operation (MRO), with over 80 years of proven reputation. Subsequently, Shanghai Zhenkunhang Trading Co., Ltd. collaborated with CRC to establish an online sales platform; Shanghai Aixun Industrial Equipment Co., Ltd. (Aixun Network), Shanghai Yijinhang Industrial Technology Co., Ltd. (Yijinhang), Lebaigong (China), and Suzhou Telijie (China) Industrial Products Sales Co., Ltd. were also established one after another. In June 2010, Alibaba’s Industrial Products Brand Mall was launched. Nanjing Yishang Fluid Technology Co., Ltd. (YiPump Internet www.epumps.biz) focuses on the fluid machinery industry and has achieved good development as well. After 15 years of development in the market, MRO services and MRO procurement have received increasing attention from industry users, and the model of MRO industrial products online supermarkets has also gradually gained recognition in the Chinese market. 　　The procurement of MRO industrial products by small and medium-sized enterprises in our country is completely different from that of large multinational companies, and the market situation is rather chaotic. The model of large multinational companies follows international processes, with international standard systems such as Punchout integrated into their internal ERP systems. Companies also place more emphasis on improving work efficiency rather than merely maximizing profit margins; they often conduct large-scale, one-time bidding processes for procurement. Suppliers have to invest a lot of effort and resources in participating in such bids, while larger companies possess more sophisticated procurement systems and lists of suppliers. On the other hand, the needs of small and medium-sized enterprises are highly diverse, with frequent changes in products, and they are price-sensitive. China’s MRO industrial products online supermarket addresses the problems of small and medium-sized enterprises. 　　Based on the current purchasing demands and development of the MRO industrial products sector in China, there are five key elements required to establish an effective online supermarket for such products:

**P (Product)**: A comprehensive product range that covers various fields, with millions of different SKUs available.

**T (Timeliness)**: Timely delivery is essential; while a wide range of products may be available, this can sometimes lead to shortages, so it’s necessary to coordinate deliveries in batches.

**Q (Quality)**: Ensuring that all products are genuine, with standard quality controls and verification mechanisms in place.

**C (Cost)**: Affordable prices – Chinese small and medium-sized enterprises are very sensitive to cost.

**S (Service)**: High-quality website services and technical support are crucial. Most small businesses in China lack skilled technical staff, so they have high expectations regarding after-sales service for industrial products.

The development of online platforms for MRO industrial products in China is growing rapidly, and success depends on these five key factors: PTQCS. It’s also important to understand the characteristics of different types of websites dealing in industrial products, with local Chinese companies being particularly noteworthy.

There are many online shopping platforms for MRO industrial products in China, and their business models mainly involve direct sales by the platform itself or by third-party sellers. Based on the current trends in this sector, I classify such platforms into three categories: 01) Those that expand their business from international markets into the Chinese market, such as Goodman, Sugimoto, and Huangjiali. These companies do not focus on short-term profits but rather on building robust warehousing and logistics systems. They rely on their existing global customers to drive sales, targeting large multinational corporations. 　　02. Comprehensive industrial product supermarkets developed in China, such as Alibaba Industrial Products Mall, Fumao Mall, Xiyu, Aixun, Yijinhang, Zhaogongye.com, Gongpinhui, Amyi, No.8 Warehouse, Kuaihaosheng, and Yipum Interconnect. These companies often start by entering the Chinese market in a manner similar to Guanjie (China), but they face high initial investment costs and slow growth; they also often suffer from issues such as an inaccurate market positioning, insufficient industry resources, and low brand awareness. 　　03. Creating vertically specialized platforms in the industrial products sector. Examples include Mobei.com, which focuses on the bearing industry; Nagequqiwang, an O2O platform for small hardware products established by several leading enterprises in Foshan’s equipment manufacturing sector; and Yipum Hulian, which specializes in the pump industry. While these vertically specialized platforms may experience rapid market growth in the short term, they do not address the fundamental issues of having a large variety of industrial products to purchase and numerous suppliers to deal with. Nanjing Yishang Fluid Technology Co., Ltd.: www.epumps.biz