As the largest city in Chinese Mainland and one of the four municipalities directly under the Central Government, Shanghai is the economic, financial, trade and shipping center of Chinese Mainland. Shanghai is located at the mouth of the Yangtze River in the middle of the coastline of mainland China, and has the largest foreign trade port and industrial base in China. In recent years, the Shanghai paint market has made significant progress. According to relevant data, in the June 2011 ranking of provinces and cities in China for coating production, Shanghai ranked second.
Nowadays, in the decoration and building materials supermarkets in Shanghai, there is a wide variety of civilian coatings available, with a complete range of high, medium, and low-end products, meeting the needs of citizens at different levels. At the same time, foreign wholly-owned and joint venture enterprises in China mainly produce mid to high end products and imported products, occupying the main market in Shanghai, while domestic products are mostly mid to low end and have few varieties.
The reason why joint ventures or imported brands dominate the Shanghai coating market is due to the large influx of foreign coatings into China in recent years. At the same time, global tariffs, quotas, and policies have increased the compensation provided to domestic industries. Some developed countries have used measures such as raising technological and environmental barriers to impose a series of sanctions, forming numerous non trade barriers. The paint industry also faces such non trade barriers. International paint companies have entered the Chinese market in various forms such as technology transfer, technology equity, sole proprietorship, joint venture, and direct product entry, bringing the total number of sole proprietorship and joint venture paint enterprises to over 300 and showing a trend of further expansion.
According to incomplete statistics, the top ten paint companies in the world, such as Nippon Paint, Kansai and Prominent in Japan, ICI in the UK, Sunway, Williams and DuPont in the US, AkzoNobel in the Netherlands, BASF and Henkel in Germany, have all established general agents or production plants in China, with a market share of over 50%. According to data, Nippon Paint Company and AkzoNobel Taikoo Paint Co., Ltd. have an absolute advantage in the total production of building coatings in Shanghai, with industrialization, specialization, and scale taking shape. According to statistics, there are 8 enterprises in Shanghai with a production capacity of over 5000 tons, among which 5 are wholly-owned or joint ventures established by multinational companies with international competitiveness. Their coatings are of medium to high grade, and their total product volume accounts for nearly 60% of the city's coating production. There are as many as two to three hundred enterprises in Shanghai that produce less than 5000 tons, some of which are workshop style with simple equipment and mostly produce low-end products.
Faced with fierce competition in the paint market, Chinese paint companies still need to leverage their own advantages, dare to compete with international brands, and gradually expand their products in the domestic high-end market.