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What makes Huaqiang North rapid development?

2024-01-03 11:55

Huaqiang North - China's No. 1 Electronic Street, located in the center of Shenzhen Special Economic Zone, is located around the Shenzhen CPPCC, Central Business District, and Government, covering an area of approximately 1.45 square kilometers. It is the commercial street with the largest transaction volume in mainland China, and one of the most influential markets for computer hardware and electronic components.

Huaqiang NorthThe prototype of Huaqiang North was established on March 28, 1988. At that time, China's first electronic supporting market - SEG Electronic supporting market, including more than 160 local and mainland manufacturers in Shenzhen and 10 Hong Kong companies, was self-operated and Sales and joint sales agency operations.

SEG Electronic supporting market in 1988

It was during the period from 1994 to 1995 that it truly evolved into Shenzhen's urban business district.
In 1994, marked by the arrival of Vanguard Department Store in Huaqiang North, it truly became an urban business district.
In April 1995, Shenzhen International Electronic City Professional Market officially opened. In 1997, Wanshang Electrical Appliance City and Dabaihui Commercial City opened. In 1998, the Huaqiang Electronic Market across the road from SEG Building was employed.
Huaqiang Electronic Market in 1998

Due to the continuous expansion of the market scale, the electronic market's increasing demand for surrounding supporting industries has prompted the tertiary industry to begin to develop rapidly. Service industries represented by hotels and shopping malls have settled in, as well as commerce, offices, banks, and restaurants. and other industries.
In 2000, the 72-story SEG Plaza with a total height of 355.8 meters was put into use, and Huaqiang North became the largest electronics market and mobile phone trading center in Asia.
SEG Plaza

At its peak, here had an average daily flow of 500,000 people and a daily capital flow of 1 billion yuan. The myth of "a billionaire emerges from a one-meter counter" is constantly being played out here.

The main reasons behind Huaqiang North’s achievements are as follows.

1. Geographical location

The background of the establishment and development of Huaqiang North coincided with the reform and opening up of mainland China. Coupled with the rise of the global consumer electronics wave, the manufacturing industry in the Pearl River Delta began to gradually expand overseas markets. Huaqiang North is located on the coast adjacent to Hong Kong, and it is also in Shenzhen, a city at the forefront of reform and opening up. It undoubtedly occupies a unique advantage.
At that time, Shenzhen used foreign capital and advanced foreign technology and management, relied on policy dividends, and attracted labor dividends from the mainland, causing upstream purchasers and midstream production companies to continuously flock to Huaqiang North, forming an industrial cluster around it, which greatly reduced the cost of transportation, procurement, Sales and other costs, while improving resource utilization efficiency, have formed an absolute internal advantage. Over time, the reputation and popularity of the "Huaqiang North" brand will continue to be improved, attracting more investors and customers.
Shenzhen reform and opening up

2. Industrial foundation

Data cables cost 50 or 60 cents, chargers cost 2 or 3 yuan, and headphones cost 10 yuan. Huaqiang North’s electronic products can gain market competitiveness at low prices while also taking into account quality. The main reason is that it has a strong and mature industrial supply chain behind it. 
In fact, Huaqiang North's "one-meter counter" is just a front store, relying on the Pearl River Delta with a highly mature industrial chain. Taking a mobile phone sold by Huaqiangbei as an example, there are thousands of well-known supporting companies in Shenzhen that can provide material supplies, such as Foxconn, which makes molds, Shennan Circuit, which specializes in circuit boards, and TCL, which manufactures panels, including mobile phone battery giants. BYD is also located in Shenzhen.
Shenzhen Industrial Park3. Business model

The business model that combines industrial regionalization and a free market environment is also one of the important reasons for the explosive development of Huaqiang North Business District.
Shenzhen has always been a city with a large immigrant population. During the period of reform and opening up, Shenzhen had no capital, no technology, no organization, and no business model. At the same time, there were not many monopolies formed by locals, and it was a completely open social system. The government has done very little to interfere in the development of market operations, leaving the market to merchants, giving merchants the prerequisite for spontaneously establishing an efficient order.
The people of Huaqiang North all started from scratch. They gathered randomly through business cooperation, and then through the supporting industrial chain and market division of labor, became efficient and orderly market-oriented individuals. Through information organization and benefit distribution, while market activities were operating normally, they strengthened their independence. There is a certain market order.
During the peak period of Huaqiang North, continued to receive massive amounts of information and business opportunities every day. There were no interfering factors such as mechanical rules and monopoly in the exchange of information. Merchants based on transactions, profits, and prices formed an information feedback system and formed an internal system for sustainable development. Driven by the free market.
Huaqiang market stall

In a free market environment, the business model of Huaqiang North merchants has created a typical electronics industry cluster, suppliers only need a counter and do not need to go everywhere to find customers; electronics manufacturers no longer need to travel around, and since there are more electronic component suppliers, the procurement cost has also become lower. In this way, from upstream components to midstream manufacturing and then to the downstream market, it can be manufactured and traded. It is both the source and the end point. Behind the one-meter counter in Huaqiang North is a complete electronics industry chain, starting from Pearl River Delta A factory in the triangle is connected to the consumer at the end of the logistics.
At the same time, industrial regionalization will also produce strong knowledge spillover effects. Various technologies and knowledge in the region are rapidly spreading, driving internal companies to continuously innovate products and improve their competitiveness. This also makes Huaqiang North always at the forefront of sales trends.
Huaqiang Market ShopCurrent business status

At present, the number of commercial entities in Huaqiang North District has exceeded 100,000, an increase of 16,000 compared with 2019, an increase of more than 17%, including 67,000 small and micro enterprises and 42,000 self-employed households.

In 2022, there will be 847 enterprises above designated size, with revenue exceeding 240 billion yuan, a year-on-year increase of approximately 8%. As of the end of 2022, Huaqiang North has 35 professional markets with nearly 20,000 merchants. The revenue of regulated enterprises in the wholesale and retail industry is approximately 134 billion yuan, setting a record of 4th in the country in terms of number of e-commerce merchants, business area, product categories, and annual sales. one.

From January to May 2023, enterprises above designated size and enterprises in the financial industry made steady progress. Sales of wholesale and retail accommodation and catering industries were 63 billion yuan, a year-on-year decrease of 2%; operating income of other industries was 33 billion yuan, a year-on-year increase of 8.4%.

Huaqiang North merchants are delivering goods

Upgrade and Transformation

At present, the electronics industry in Huaqiang North is still taking root and developing. The number of markets, total operating area, and number of merchants have basically remained unchanged. There are currently 20 professional electronic markets with a total operating area of 400,000 square meters and nearly 20,000 merchants.

On the basis of "China's No. 1 Electronics Street", the government has proposed the positioning of "three centers": a global electronic components trade center, a global hardware innovation and entrepreneurship center, and an international fashion electronics consumption center, striving to create an international innovation and entrepreneurship district.

Huaqiang North Street is positioned around the "three centers" and continues to improve the business environment in its jurisdiction. Established a street chamber of commerce, physically operated the city's first grassroots comprehensive intellectual property protection service station, and promoted rent reductions and exemptions of approximately 260 million yuan in various markets.

Huaqiang North Shopping CenterThe "one-meter counter" was once the symbol of Huaqiang North. Nowadays, more and more companies are actively transforming and completing the successful transformation from the traditional counter model to the high-end experiential consumption format.
Explore new business models for electronics enterprise headquarters. Guide the enterprise Huaqiang Group to build the Huaqiang Electronics Super Headquarters on the 6th floor of Huaqiang Electronics World, with a planned area of 10,000 square meters. It will gather outstanding mid-to-high-end benchmark electronics companies in Huaqiang North to centralize headquarters corporate offices, brand flagships, warehousing sales, and IC solution services It has been implemented to form a branded, large-scale and ecological electronic headquarters cluster, which now gathers more than 60 companies, and fully promotes the accelerated transformation of self-employed individuals and small and micro enterprises on the site. 
remax in Huanqiang NorthAt present, Futian District is using the whole district's efforts to promote the continuous transformation of Huaqiang North. In the future, it will focus on exploring new traffic-draining content such as chip trading platforms, innovation and entrepreneurship incubation platforms, national second-hand goods e-commerce platforms, and animation, fashion, cultural and tourism districts.
"Electronic No. 1 Street" is Huaqiang North's distinctive label and will accompany it to go further.

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