2021 China IoT Industry Conference – High-Level Interview: Sun Jianjun of Shangluo Electronics

On December 8, the 2021 (18th) China IoT Industry Conference and Brand Gala, co-hosted by HC Intelligence IoT and HC Electronics Network, was grandly held in Shenzhen. With the theme “IoT Empowers Innovation, Digital Intelligence Shapes the Future,” the event reviewed the industry’s achievements over the past year, unearthed valuable insights from corporate development, and strived to make it the premier annual event of China’s IoT sector in 2021.

Sun Jianjun, Director of Technical Support at the Business Development Center of Nanjing Shangluo Electronics Co., Ltd.

At the event, the 2021 Brand Awards ceremony was held, with Shangluo Electronics honored as one of the “Top Ten Electronic Distributors” for 2021. Sun Jianjun, Director of Technical Support at the Business Development Center of Nanjing Shangluo Electronics Co., Ltd., granted an interview to HC360.com:

Q

HC Electronics Network: First of all, congratulations to your company on being awarded this year’s Top Ten Electronic Distributors Award. Could you please share your acceptance remarks?

Sun Jianjun: Nanjing Shangluo Electronics Co., Ltd., a leading domestic provider of value-added supply-chain services for electronic components, supplies electronic components to manufacturers in sectors such as network communications, consumer electronics, automotive electronics, industrial control, and the Internet of Things. On April 21, 2021, the company was listed on the ChiNext Board of the Shenzhen Stock Exchange.

2021 was an extraordinary year. The COVID‑19 pandemic surged again in numerous countries across Southeast Asia, South America, Europe, and beyond, causing repeated disruptions to China’s electronics industry. Meanwhile, price hikes by some major semiconductor manufacturers further exacerbated supply‑demand imbalances. Shortages of key semiconductor components and uneven supply chain availability have persisted to this day, with the entire semiconductor value chain—both upstream and downstream—continuing to grapple with the global pandemic and the accompanying chip shortage. This situation could extend into the first half of 2022 or even longer. Amid these challenges, Shangluo Electronics proactively monitored supplier dynamics, responded decisively under the principle of empowering our customers, and worked hand in hand with them to navigate these difficult times, achieving solid results in 2021. We are deeply grateful for the encouragement and trust shown by the organizing committee; this award is a well‑deserved recognition of Nanjing Shangluo Electronics’ accomplishments over the past year.

Q

HC Electronics Network: At present, competition across industry sectors remains fierce, and securing a top‑ten award is a testament to a company’s overall strength. In what areas does your company’s differentiated core competitiveness lie?

Sun Jianjun: The company’s core competitiveness is primarily reflected in the following five areas:

1. Advantages of Authorized Brands: Original‑manufacturer authorization serves as the cornerstone for an agent’s stable market growth. Throughout its business development, the company has consistently adhered to a business model that fosters long‑term, mutually beneficial partnerships with renowned OEMs. Since its inception, years of dedicated collaboration have enabled the company to accumulate numerous high‑quality OEM authorizations, securing agency rights from over 80 prominent domestic and international manufacturers, including TDK, Samsung Electro‑Mechanics, Yageo, GigaDevice, Sunlord Electronics, TE Connectivity, Leshan Radio, and others. By obtaining these authorized distributorships, the company can procure high‑quality components at competitive prices in a timely manner. Moreover, technology‑sharing initiatives between the OEMs and the company positively enhance the firm’s capabilities in information acquisition and technical service delivery.

2. Customer Base Advantages: Through years of experience, Shangluo serves more than 2,000 customers across diverse application areas, including network communications, consumer electronics, automotive electronics, and industrial control. The company has earned a strong market position and reputation by partnering with well-known industry leaders, while also maintaining a large base of small and medium-sized clients that provide long-term growth opportunities and help diversify operational risks. In terms of geographic reach, the company adheres to a global strategy, currently serving customers in over 20 countries and regions across Asia, Europe, and the Americas. Additionally, by establishing subsidiaries and representative offices in Hong Kong, Taiwan, Southeast Asia, and other overseas markets, Shangluo supports local market expansion.

3. Supply Chain Management Advantages: Distributors are characterized by a wide product portfolio, a large customer base, and stringent supply‑guarantee requirements; accordingly, their supply chain management capabilities represent a core competitive advantage. Throughout its development, the company has placed great emphasis on supply chain management, establishing a comprehensive “procurement, sales, and inventory” supply chain system. By integrating the management of product flows, information flows, and financial flows from suppliers to customers, the company ensures reliable supply while minimizing supply chain costs and maximizing its own profitability.

4. Risk Control Advantages: Shangluo Electronics has implemented end-to-end risk management measures, effectively controlling risks across all stages—including original‑manufacturer quality, material management, and customer credit—thereby ensuring the company’s steady growth. These rigorous risk‑control practices have kept bad‑debt losses and inventory write‑offs under tight control, providing a critical safeguard for the company’s stable and sustainable development, enhancing customer service levels and satisfaction, and fostering strong relationships with both suppliers and customers.

5. Team Strengths: Since the company’s inception, its core management team has been deeply entrenched in the electronic components distribution sector, boasting more than 20 years of industry experience and a profound understanding of market dynamics. In today’s rapidly evolving landscape, this expertise provides critical support for making sound strategic decisions and ensuring sustainable growth. Service is a key differentiator in winning customer loyalty. By building a high‑caliber management, sales, and technical support teams, the company delivers premium, market‑oriented services, fostering trust through excellence and achieving mutual success based on that trust.

Q

HC Electronics Network: In the post‑pandemic era of 2021, the “chip shortage and price hikes” narrative remained a hot topic. What effective measures have companies implemented to balance their supply chains with shipment volumes? Additionally, could you provide a summary of your outlook on the future trajectory of the chip shortage in the market?

Sun Jianjun: In response to the ever‑changing market conditions, this approach better highlights distributors’ supply chain management capabilities. Faced with this year’s “chip shortages and price hikes,” Shangluo Electronics has leveraged its planning department to forecast customer demand and coordinate the efficient allocation of company resources, establishing an integrated, collaborative supply chain mechanism. On one hand, drawing on customer demand data gathered by the sales team—combined with historical order and shipment patterns, original equipment manufacturers’ supply capacities, and key factors influencing future demand—the company uses its enterprise information systems to build demand‑forecasting models. On the other hand, product managers maintain close communication with OEMs to monitor capacity utilization, inventory levels, order volumes, and their evolving trends, while also factoring in broader market and industry supply‑and‑demand dynamics. By integrating these two streams of information, the company can proactively increase inventory buffers when supply tightens, thereby mitigating shortages, and reduce stockpiles when supply eases, thus keeping inventory under control. Meanwhile, thanks to long‑term, stable partnerships with OEMs, the company actively secures additional resources during periods of acute market scarcity.

Based on the current situation, as domestic substitution continues to deepen over the coming period, supply constraints for certain materials are expected to ease initially. However, for products that still cannot be fully covered by domestic alternatives, shortages are likely to persist.

Q

HC Electronics Network: Looking back at the electronics industry in 2021, domestic substitution has emerged as an overarching trend. Compared with their international counterparts, what advantages and disadvantages do you see in China’s chip manufacturers? Drawing on your specific niche, could you share your perspective on “domestic substitution”?

Sun Jianjun: To summarize, there are two key points: opportunities and challenges. Starting with the challenges, in the semiconductor industry, domestic companies still lag significantly behind international brands—particularly when it comes to high‑performance electronic components. Most of the devices we use remain reliant on imports, and China’s analog chip sector has a long way to go.

China boasts the largest semiconductor market and the fastest growth rate. Chinese analog integrated circuits account for roughly 45% of global output, yet domestically produced chips still represent less than 10% of the global share, leaving vast room for future advancement. The escalating U.S.-China trade tensions, coupled with the rapid development of 5G, new energy, and automotive electronics, as well as the surge in demand driven by pandemic‑induced shifts in consumer behavior toward electronic products, have made domestic substitution an inevitable trend.

Q

HC Electronics Network: As 2021 draws to a close, how is your company progressing toward its annual performance targets? And what overarching strategic priorities will guide your planning for 2022?

Sun Jianjun: Over the past decade, the rapid growth of smartphones, mobile technologies, and the Internet of Things—along with advancements in 5G, new energy, AI, automotive electronics, and autonomous driving—has fueled substantial expansion in the electronic components market. Looking ahead to the next decade, automotive electronics is expected to maintain a compound annual growth rate of over 10%. Driven by the overarching trends of electrification, intelligence, and connectivity, this sector is poised to become the next trillion‑yuan‑scale market, following the smartphone industry.

The electronics components industry is under significant pressure, driven by chip shortages, demand uncertainty, and U.S.-China trade tensions. At the same time, as competition among domestic distributors intensifies, the expectations for distributors are becoming increasingly professional and efficient. Under the leadership of our Chairman, Mr. Sha Hongzhi, we will remain committed to empowering our customers, delivering exceptional service and support to both end‑users and long‑tail clients, continuously elevating our technical expertise and service standards, and strengthening our position as a technology‑driven distributor—providing our customers with even greater value‑added solutions.