I. Industry Risk Analysis

(1) Policy Risk

The current policy risks in the alkaline battery industry are concentrated on the tightening of environmental protection supervision and the pressure of industrial upgrading. Countries are accelerating the elimination of traditional battery technologies containing heavy metals and promoting the standards of mercury-free and high recovery rates. If enterprises lag behind in technological iteration, they may face production restrictions or market access barriers. Policies such as the EU’s “New Battery Regulation” strengthen the traceability of carbon footprints, and the compliance costs of the supply chain for small and medium-sized enterprises have increased sharply. At the same time, frequent anti-dumping investigations in overseas markets and the tilt of domestic new energy subsidy policies have squeezed the profit margins of traditional alkaline batteries from both sides. Attention should be paid to the risks of inventory impairment and technological route subversion caused by sudden policy changes.

(2) Economic Risk

Affected by the economic cycle fluctuations, the alkaline battery industry is currently facing the dual risks of a slowdown in demand growth and cost squeeze. During the economic downturn, the demand in the consumer electronics and traditional equipment markets is weak. Coupled with the accelerating substitution effect of rechargeable lithium batteries, the stock market of alkaline batteries continues to shrink. The prices of upstream metal raw materials such as zinc and manganese remain high due to the disruption of the global supply chain, but the terminal retail prices are difficult to pass on due to consumer purchasing power, and the gross profit margin of enterprises has narrowed to the critical point of 5% – 8%. Leading enterprises in the industry build moats by reducing costs through automation. The pressure on small and medium-sized manufacturers for equipment update investment and account period management has increased sharply, and the risk of capital chain rupture continues to accumulate in the distribution system where the account period is generally extended to 120 days.

(3) Social Risk

The alkaline battery industry faces social risks caused by the gap in consumption values between generations. The awakening of environmental awareness among the younger generation has driven the market to shift towards rechargeable lithium batteries and solar equipment, weakening the rationality of consuming disposable batteries. The price sensitivity of the middle-aged generation and the usage inertia of the elderly group are difficult to support sustainable growth. The collective rejection of “high-carbon footprint products” by Generation Z is reshaping the product selection logic of retail channels, and the increasingly strict waste management regulations have increased the compliance costs of the traditional distribution system. Entrepreneurs are facing double challenges of business ethics and profit models in the technological gap and consumption fault.

(4) Legal Risk

Entrepreneurs entering the alkaline battery industry need to focus on preventing three major legal risks: In terms of environmental protection, the production process involves the control of heavy metals such as mercury and lead, and it is necessary to comply with domestic and international regulations on restricted substances such as RoHS and REACH. The recycling of waste batteries must comply with the “Administrative Measures for the Permit for the Operation of Hazardous Wastes”. Violations will face high environmental protection penalties. In terms of product quality, safety issues such as false marking of battery capacity and leakage may trigger liability investigations under the “Product Quality Law”, and enterprises may bear the losses of product recalls and compensation to consumers. In the field of intellectual property rights, core technologies such as electrode material formulas are prone to cause patent infringement disputes, and trade barriers such as 337 investigations need to be avoided when selling products overseas. In addition, with the trend of lithium battery substitution, there is a risk of tightening policies on the energy efficiency standards of alkaline batteries.

II. Entrepreneurship Guide

(1) Suggestions on Entrepreneurial Opportunities

The current entrepreneurial opportunities in the alkaline battery industry are concentrated on environmental protection upgrading and application in niche scenarios. Entrepreneurs can focus on developing high-capacity, low self-discharge environmentally friendly products to replace traditional carbon batteries, and seize the long-lasting power demand scenarios in smart homes, medical equipment, etc. They can also take advantage of the nickel-hydrogen battery recycling technology to layout the circular economy track and cooperate with new energy vehicle manufacturers to develop vehicle battery modules. Customized alkaline battery solutions can be launched for emerging fields such as outdoor emergency power supplies and Internet of Things terminals, and the cross-border e-commerce can be combined to expand the supporting market for DIY tools in Europe and the United States.

(2) Suggestions on Entrepreneurial Resources

Entrepreneurs in the alkaline battery industry should focus on the integration of core resources: First of all, establish a stable supply chain and form strategic partnerships with material suppliers with environmental protection qualifications and high-precision battery case manufacturers to reduce the risk of raw material price fluctuations. Rely on scientific research institutions or mature enterprises to obtain key technological resources such as improved electrolyte formulas and sealing technologies. Cooperate with contract manufacturers with UL/CE certifications for asset-light production, and expand overseas distribution channels through cross-border e-commerce platforms and new energy exhibitions. Apply for support funds from local governments for the new energy industry and connect with environmental protection industry funds to obtain start-up resources. Build a composite team of professional engineers, supply chain management personnel, and foreign trade operators, and recruit technical backbones from retired battery enterprises through industry forums to supplement industry experience.

(3) Suggestions on Entrepreneurial Teams

Entrepreneurial teams in the alkaline battery industry need to recruit composite talents with experience in new energy material R & D, environmentally friendly production processes, supply chain integration, and energy storage channel resources. The core founders should have experience in battery industrialization and form interdisciplinary cooperation groups. Compliance experts familiar with environmental protection certifications such as the EU’s RoHS/REACH should be recruited first. Market researchers who master the analysis of the lithium battery substitution trend should be equipped. A technical director with experience in industrial automation equipment transformation should be introduced. At the same time, a supply chain safety commissioner should be set up to connect with cathode material suppliers and establish a secondary supply system. The team management should adopt a dual-track incentive mechanism of equity + project dividends. Through weekly technical iteration briefings and monthly policy research meetings, the team should maintain the ability to dynamically respond to the substitution risk of solid-state batteries.

(4) Suggestions on Entrepreneurial Risks

Focus on technological compliance and supply chain resilience. Obtain mandatory certifications such as RoHS and UN38.3 first to avoid market access risks, and establish a hedging mechanism for raw material price fluctuations to lock in the costs of key materials such as manganese powder. In response to the trend of rechargeable battery substitution, develop products for niche scenarios such as emergency power supplies to achieve differentiated competition, and simultaneously layout lithium battery compatible technology patents to form a technological moat. Build a hazardous waste treatment alliance to deal with environmental protection reviews, and reduce the cost of equipment iteration through modular production design. Use a combination of order financing and customer performance insurance to ensure capital turnover, and focus on preventing the risk of inventory depreciation caused by technological iteration.