TYchemical
There’s been a bit of magic in the disinfectant industry these last two months.
Before, more than 2,500 domestic enterprises of disinfection products were registered and established in February. After that, skin-care manufacturers such as Shell Group and Meichen transformed their production lines. Later, “beyond the eight lines” enterprises, such as BYD and LVMH Group, “crossover” production.
With the COVID-19 epidemic spreading around the world, disinfectant is almost out of stock after masks are hard to come by.
In order to donate materials to the epidemic area as soon as possible, Libai production base resumed on the fifth day of the first lunar month. The factory opened the “full load” mode, and the production capacity of disinfection solution increased from 165 tons/day to 375 tons/day.The extreme gap between supply and demand made the shellfish faction, which responded to the government’s call for “epidemic prevention and control”, overwork for half a month and nearly “burst”.
Almost at the same time, in Songjiang, a city about 460km from Hefei, all the company’s executives, staff and even customers went straight to work on the production line.
This is not the first time in China’s disinfectant industry.During SARS in 2003, the disinfectant was also sold out.But when the epidemic came to an abrupt end, the disinfectant fell off the altar.Although Dripping dew and Willus have risen in China and entered thousands of families, most of the cases are caused by numerous small and medium-sized manufacturers who have accumulated a large amount of disinfectizer, leaving a ground of chicken feathers.
01
The madness of “national disinfectant factory”
“Can you buy an alcohol disinfectant?Where do you sell them?”
“How expensive a bottle is!”
“Slow hands go away.”
Overnight, disinfectants, which have been neglected in daily life, became the new anti-epidemic requirement after masks.
On February 19th consultants bain and Tmall released a report comparing consumption data during the Spring Festival period in 2020 and 2019 (the first to the thirteenth day of the first lunar month).Sales of household cleaning products were up 316 per cent year on year, with disinfectants being the main targets.
Not only on Tmall, Suning’s hand sanitizer also sells like hot cakes.Sales of hand sanitizers soared 23-fold during the outbreak, with Shanghai, Guangzhou and Beijing seeing the highest sales, Suning said.”The peak came in early February, when orders averaged around 200,000 a day.Some of our own disinfectant products are sold out within a minute of being on the shelves.”Suning said.
Xu Xiaodong, vice president of Libai Group, said in an interview with the media that the sales of disinfection products such as sterilization and bacteriostasis are not high compared with the sales of laundry detergent and detergent.But nearly half a month, dealers around the order of anti-virus antifungal products demand is indeed constant.
With the Spring Festival coming, the shortage of inventory and the shortage of workers, a bottle of disinfectant is doomed to be recorded in the annals of public epidemic prevention in February.Manufacturers are also working hard during the Spring Festival to cope with surging public demand.
February 1, is the start of the Shell pai Hefei factory day.From this day to the 6th, the Shellfish faction was busy preparing supplies and coordinating transportation.At that time, the manufacturers of packaging materials such as bottles were hardly in operation.”We bought stock first, but the price of a bottle went from a few cents to a few dollars.”Jiang lei said.
And in Gu Yiye’s eyes, the plastic packaging material industry can be described as “crazy”.”We fought for bottles, like we fought for masks.””A plastic bottle goes from 30 cents to more than a dollar, but you can’t hesitate to place an order a minute later,” she said.
Outside packing material, transport is the same problem that disinfect venom manufacturer has a headache.”At that time there was no logistics company willing to ah, are special transport.”Recalling the scene at that time, Jiang lei still laments: “The cost is extremely high, the difficulties to overcome are still quite big.”
The pressure is almost all on the manufacturers.At its most extreme, the gap between supply and demand for shell pie is between 200,000 and 250,000 bottles.Even with round-the-clock operation, shell pie at its peak has a capacity of only 150,000 bottles.”We normally sell 20,000 to 30,000 bottles a day.”Jiang Lei said.
In order to maintain normal operation, shell pie has had to start rejecting some orders.It should be noted that the daily order saturation of shell pie is only about 1,500 orders, but under the epidemic situation, 80,000 orders has been the norm.At the same time, its warehouse area has expanded again, from 800 square meters to 4,000 square meters.
“Creating miracles”, is Jiang Lei’s summary of his work in February.In the busy nearly half a month, nearly 60% of shell products were sent to hospitals in urgent need of supplies, while only 40% of the disinfectant products were sold in other channels.
Likewise, there are in order to assist the affected areas had to resume work and production in advance of libai.On February 10, after all libai factories resumed production, it donated 200 million yuan of sterilizing and sterilizing products to the epidemic area.At the same time, Libai also expanded its online sales channels to meet the needs of consumers during the epidemic.
With the outbreak, the impossible has become possible.In fact, unlike Libai, which has been engaged in the field of disinfectants for many years, neither Shell School nor Meson started their business as a disinfectant. Their main products are skin care products.But depending on the similar production line and production ingredients, it may be advantageous to change the production of disinfectant.
Similarly, LVMH group is also “crossover”.As the epidemic prevention and control in France rose from the second level to the third level, LVMH group temporarily changed its three perfume production lines of Dior, Givenchy and Guerin to produce hand sanitizer and other disinfection products on Wednesday to alleviate the shortage of hand sanitizer in France.Production is reported to have reached 12 tons in the first week.
In the global emergency situation of epidemic prevention supplies, disinfectant has been second only to masks in “epidemic prevention status”.This has been at the low end of the industry in China, for a while also “full factory”.
Since January 1, China has added more than 3,000 companies that produce and sell consumer products, according to Data from Tianyan.In February alone, more than 2,500 enterprises registered disinfection products, an increase of 42 percent over the same period last year.
02
China’s disinfectant industry is hard to climb
The popularity of disinfectant in China is closely related to the prevalence of certain diseases.In the early 1980s, the hepatitis B virus spread across the country, giving rise to what is now known as the “84 disinfectant.”Not long after its appearance, “84 disinfectant” showed its strength in the hepatitis A epidemic that broke out in Shanghai in 1988.
During THE SARS period, it became an essential product for every family.At that time, Willus and Drip also entered the bureau, “opportunity” to build the brand.Through a series of marketing promotion, the sales volume of Velus and Drip dew, which had been tepid all along, occupied most of the market of sterilizing liquid in China after SARS.
According to data from Euromonitor International, The market share of Domestic consumer products in China in 2019 was the largest, accounting for 45.1%, which is owned by Willis group.Reckitt Benckiser, of which Drool belongs, ranks second with a market share of 16.6 per cent.In this COVID-19 outbreak, drool and Velux are still doing well.On the Suning platform, the top three brands of sales volume are Dripping dew and Velux.
Four times, the big brands “a blessing in disguise” gained a foothold, and the rest of the market was occupied by small and scattered companies.According to the same data, China now has nearly 140,000 enterprises producing and selling disinfection products, mainly in the wholesale and retail sectors.From the perspective of registered capital, 23% of enterprises have registered capital of less than 1 million yuan.
But compared with foreign from many applications segment takes high-end course, such as toys, clothes, pets, hand sanitizers, China failed to climb cany on the detergent development – disinfection aseptic products is still relatively small, ordinary people living closest disinfection products or 84 disinfectant, household use product is bactericidal effect of products such as liquid soap, detergent fruits and vegetables, etc.
Once, Jiang Lei tried to declare new materials, and visited a large number of new disinfectant materials declaration intermediary agencies, even the Health commission, but basically failed.”The HEALTH Commission has been cautious at this level.”Jiang Lei said helplessly.
Nowadays, due to the single variety and extensive production, the competition of disinfectant is gradually sliding into price competition.”The ingredients are the same, drip to sell dozens of pieces, how dare we exceed it?””Said Gu Yiye.
“Isn’t it sodium hypochlorite or alcohol mixed with water?”After more than 40 years of development, Chinese disinfectants still cannot escape the “stereotyped” impression of the outside world.”The industry is still a mess.”After more than a decade in the disinfectant industry, Jiang remains cautious and pessimistic about the industry’s development in China.
According to tianyan, more than 8,000 enterprises producing disinfection products have received administrative punishments so far.More than 1,000 penalties were imposed for “selling substandard drugs” and more than 100 for “false propaganda”.During the epidemic, a wave of small scattered markets poured in, exposing the problem of production qualification once again.
According to Jiang Lei, the disinfectant class are eliminate font products.The so-called “elimination number” refers to the health batch number that needs to be examined and approved by the local health department. For example, the disinfectant of this category of products can only be used for external disinfection and sterilization, and does not have the effect of regulating the physiological functions of the human body.”The only difference between medical and non-medical disinfectants is the 75 percent alcohol level.”
But the reality is, many manufacturers in the absence of relevant records, without permission to change the production line to produce “disinfectant.”According to Jiang, this is against the rules: “If the manufacturers only record cosmetics, they claim that 99.9 percent of the bacteria inhibition rate is illegal.Because cosmetics are not allowed to claim bacteriostatic function in the makeup name registration.”
“Maybe it was too late to supervise during the epidemic.””Said Jiang lei.The industry chaos in the epidemic has become a microcosm of The extensive development of disinfectants in China.
03
A chicken feather or change history?
For years, China’s disinfectant market has been growing at a steady 5.5 percent annual rate.Data show that the market growth slowed down in 2019, with the output value reaching 10.34 billion yuan, up 0.6% year-on-year, and the growth rate dropping 6.3% compared with the previous year.However, due to the COVID-19 outbreak in 2020, the growth rate of disinfectant output will be significantly increased.
Libai believes that in the long run, due to the improvement of consumers’ awareness of health and hygiene, the market demand for sterilizing and sterilizing products will increase in the future, which may drive the development of sterilizing and sterilizing industries and more demands.After the epidemic, public consumers will have a clearer understanding of disinfection and sterilization products, and their choices will be diversified.”Portable sterilizing bags, sterilizing sprays and sterilizing effervescent tablets will enter consumers’ lives more often.The future commercial disinfection market will also be a key development area.”
Jiang also believes that the use of disinfection equipment in China has increased and changed as a result of the epidemic.However, the magnitude of the change is conservative in his view of the market’s future direction.
In his opinion, apart from the existing problems in the industry, because disinfectants are considered to be low-end products in the mass market, many market end and retail end are unwilling to accept them, leading to a vicious circle.Consumer awareness, meanwhile, is a major constraint.”From the policy perspective to the market as a whole, I have always been pessimistic.”Jiang Lei said.
A large backlog of disinfectant products after SARS is the “lesson of blood”.Jiang said that many small enterprises, which mainly produce disinfectant venom, are vulnerable to overcapacity, unlike large enterprises, which can switch production lines at any time.
In early March, the demand and supply of disinfectant gradually stabilized as the domestic epidemic eased.
Libai said: “Due to the impact of the previous epidemic, consumers have raised their awareness of health and hygiene, and there is still a great demand for disinfectant and sterilizing products such as hand sanitizer and disinfectant.In the future, we will also increase research investment in disinfection categories to provide consumers with more efficient, easy to use, multi-scene segmentation disinfection solutions.”
In contrast to Libai and its subsidiary Chaoyun group, which will continue to focus on disinfection and strengthen its research and development capabilities, The Shell group has chosen to actively reduce its production of disinfectants after a “miracle” February.Michelson also slowed down.Both companies said the production of the disinfectant was an upgrade and renovation of their production lines, but that they would no longer make it a priority.
“After the end of the epidemic, we still mainly push their own skin care anti-itch products, disinfection solution will be stable production.”Jiang Lei said.The same is true of Michelin.This is a market where manufacturers of disinfectants, who switch lines temporarily, do not want to go too far.”Just doing it normally means having one more product,” says Mr Gu.Our skincare products are the most important.”
Just as things were stabilizing at home, the situation changed again — As the epidemic spread abroad and China ran out of supplies overseas, it began to reverse exports.
Recently, the factory of Gu Yiye has received about 10 customers inquiring about foreign trade orders every day, and the hand sanitizer of Shell pie is about to get FDA certification and CE certification.”The certificate comes down, we can exit.”Jiang lei said.
Both companies point to Europe and the US as the next most important export markets.Libai said that although the production of disinfectants focuses on North America and Europe, China’s disinfectant products in the global market is in the stage of booming development, market penetration is gradually increasing, with a huge advantage in the number of enterprises.
“After the outbreak, China and Asia as a whole may experience a turning point in the growth of imports and exports, product restructuring and consumption upgrading.”That is the view of the white square.How far can the disinfectant industry go after the epidemic?The answer may not be clear.
Back in 2003, after the end of SARS, the disinfectant industry fell into a mess, the problem is still unresolved.When all these problems come together, industry insiders say, it is hard to expect that the epidemic will soon make the disinfectant industry fly into the sky.
“I’ve forgotten when I bought this bottle of disinfectant. Does anyone need it?I won’t be able to use that much in the future.”Many people who just received the disinfectant delivery in March asked such sincere questions.This may be the situation that many disinfectant manufacturers have to face after the end of the epidemic.