Analysis of the status quo, market potential and policy opportunities of the third-party testing industry

Source: Date: 2021-8-20

I. Analysis of the status quo of the third-party inspection industry

my country's testing industry started at the beginning of the 20th century. In 1978, special measurement institutions such as the State Administration of Metrology and the State Administration of Standards were established. Early detection agencies have been under administrative control. It was not until China joined the WTO that government departments gradually liberalized the supervision of the testing market, and third-party testing agencies were increasingly recognized and valued.

Participants in the testing industry in my country can be divided into three categories: government testing agencies, internal corporate laboratories, and third-party testing agencies according to the nature of the company.

List of major third-party testing institutions in China
Serial number     name
1     China Certification & Inspection (Group) Co., Ltd.
2     China Building Materials Inspection and Certification Group Co., Ltd.
3     China Institute for Food and Drug Control
4     Shanghai Motor Vehicle Testing Center
5     Yunnan Institute of Product Quality Supervision and Inspection
6     Shenzhen Institute of Metrology and Quality Inspection
7     National Food Quality Supervision and Inspection Center
8     Shandong Product Quality Supervision and Inspection Institute
9     Shanghai Institute of Quality Supervision and Inspection Technology
10     Wuhan Product Quality Supervision and Inspection Institute

In recent years, the third-party testing industry has developed rapidly, the market scale has continued to expand, the technology has become more sophisticated, and the industry as a whole is in a stage of rapid growth.

2008-2015 China's third-party inspection market scale and growth trend (unit: 100 million yuan)

In the national testing market, state-owned testing institutions have used traditional monopoly advantages to occupy more than 55% of the market; foreign testing institutions have used their mature market operation experience and natural advantages in the export trade testing business to occupy 30% of the market The above market share; private testing institutions started late and their capital strength is small. After several years of rapid development, their market share is close to 10%.

my country's testing market competition pattern

Benefiting from the accelerated market reform of the inspection, testing and certification system, the government actively encourages the integration of testing agencies, and the market share of third-party testing agencies has rapidly increased. Many testing agencies have been listed on the New Third Board, introducing capital and stepping into the path of rapid development. . Because the test results have a greater impact on the customer's product sales, the customer is more sensitive to the market influence of the testing agency's brand, and because the individual test amount is small, the customer is less sensitive to the price. Therefore, the testing industry maintains a relatively high level of profit, while the level of profitability of excellent brand testing institutions is even higher. The level of profitability of the same testing service has shown a downward trend as more testing agencies join, resulting in intensified competition. Excellent testing institutions continue to undertake new testing projects and continuously introduce new testing technologies by strengthening technical research and development, so as to maintain a high level of profitability for a long time.

The number and scale of domestic third-party inspection industry mergers and acquisitions are lower than those of foreign institutions, and the integration of China's third-party inspection industry is slow. Regarding the current investment boom in the third inspection industry, from 2014 to 2015, the total amount of financing obtained by third-party inspection agencies was not high, and the total amount of funds obtained from investment and financing institutions was not much.

In the testing service industry, for testing service organizations to achieve healthy and sustainable development, they must face and overcome the impact of many unfavorable factors. From the perspective of the business model of the third-party testing industry, the credibility, brand, and reputation of testing service organizations are the biggest risks they may face in future business activities. The testing industry is a policy-oriented industry, and there are still uncertain factors in the government’s openness to testing, which brings a certain degree of policy risk to domestic testing service organizations. In addition, domestic testing service organizations are also facing the risk of shortage and loss of excellent testing technicians and market developers. With the increasing competition in the domestic testing market, outstanding market expansion and technical developers have become the object of competition among various testing institutions.

Second, third-party environmental testing market potential and policy opportunity analysis

1. Market potential

Environmental testing is closely related to environmental monitoring, and the scale of the environmental monitoring market can reflect the scale of the environmental testing service market. At present, China's environmental monitoring can basically be divided into two categories: environmental quality monitoring and pollution source monitoring. Environmental quality monitoring is mainly composed of environmental monitoring stations at all levels, and pollution source monitoring is composed of monitoring by major pollutant companies. There is a large room for development in both coverage and monitoring depth, and huge market growth space.

From 2010 to 2014, China's environmental monitoring market grew from 8.2 billion yuan to 19.6 billion yuan, with a compound annual growth rate of 24%. At the same time, the proportion of government investment dropped from 64.71% to 45.82%, showing a downward trend year by year. In the future, driven by demand, the environmental monitoring market will further expand, and the third-party environmental monitoring market that provides services will also grow further.

2. Policy opportunities

On February 10, 2015, the Ministry of Environmental Protection issued the "Guiding Opinions on Promoting the Socialization of Environmental Monitoring Services", proposing to fully liberalize the service environmental monitoring market, and all service environmental monitoring services that are suitable for social forces to undertake, It is necessary to create conditions for full liberalization. Opinions encourage social environmental monitoring agencies to participate in environmental monitoring activities such as self-monitoring of pollution sources by pollutants, environmental damage assessment monitoring, environmental impact assessment status monitoring, cleaner production audits, independent investigations by enterprises and institutions, and promote the diversification of environmental monitoring service entities and service methods .

3. Air detection

In recent years, the frequent occurrence of haze weather in many provinces in my country has caused widespread concern in the society. Most cities in my country urgently need to carry out air pollution (smog) health impact monitoring, to understand the changes in the concentration of air pollution (smog) characteristic pollutants in different regions and their harm to population health, and to provide data support for health risk assessment. With the continuous enhancement of air pollution prevention and control efforts, the strengthening of monitoring data quality management, and the increasing requirements for objectively reflecting the air quality situation, the air monitoring market in my country is hailed, and the air monitoring instrument industry will usher in a wave of purchases.

4. Water quality testing

In recent years, the water quality monitoring market has developed vigorously, and water quality monitoring operation and service companies have gradually grown. Water quality monitoring companies with production equipment as their main business have gradually expanded their main business, integrated management, and production equipment at the same time. Operational services, the market scale of the entire industry continues to expand.

In 2014, my country's surface water quality monitoring market capacity reached 2.457 billion yuan; and the pollution source water quality monitoring market capacity reached 730 million yuan. Therefore, in 2014, my country's entire water quality monitoring market capacity reached 3.187 billion yuan.

The 2015 new environmental protection law added a new public monitoring and early warning mechanism for environmental pollution, and put forward higher requirements for environmental monitoring. The "Water Pollution Prevention and Control Action Plan" issued on April 2, 2015, investment in water pollution control will reach 2 trillion yuan. After entering 2016, all provinces, autonomous regions, and municipalities across the country have successively issued their own ten water regulations, which set forth requirements for the governance of the water environment, which will surely drive the development of related industries in the water quality monitoring market.

5. Soil testing

From 2005 to 2013, the Ministry of Environmental Protection and the Ministry of Land and Resources conducted a national survey of soil pollution. The survey area is about 6.3 million square kilometers, of which the survey accuracy of arable land is 8 km & times; 8 km, and the survey accuracy of woodland and grassland It is 16 kilometers×16 kilometers, and the survey accuracy of unused land is 32 kilometers×32 kilometers. It can be seen that the current survey accuracy is far from meeting the needs of soil pollution prevention and control and treatment and restoration. There is a huge market vacancy, and there are huge business opportunities in the field of soil monitoring.

As of December 2015, 31,367 national control points for soil environmental quality monitoring have been established across the country. In 2016, it is planned to continue to add 7,000 risk points, accounting for 22.32% of the established outlets. According to the plans of the Ministry of Agriculture, the Ministry of Land and Resources and the Ministry of Environmental Protection, 160,000 state-controlled sites will be added. The number of soil environmental quality monitoring points is expected to usher in rapid growth in the future.

“Ten Articles of Soil” proposed to complete the establishment of national control monitoring points by 2017, and to achieve soil environmental quality monitoring points by the end of 2020. All counties (cities, districts) shall establish national control networks before 2020. The annual sinking to the full coverage of the urban area will effectively improve the soil environmental quality and soil monitoring needs. It takes time for the implementation of policies and the construction of environmental monitoring sites. The next two to three years will usher in the growth peak of soil environmental quality monitoring sites. During the "13th Five-Year Plan" period, the growth rate of monitoring sites will show a trend of rapid first and then slower. As the application of soil monitoring equipment is mature, its price will also show a downward trend.