Affected by the global economic volatility in recent years and the continued tightening of domestic real estate regulation and control policies, China's furniture industry is facing difficulties such as overcapacity, rising costs and increasing market competition. Although the furniture industry showed signs of recovery in 2013, the business conditions of enterprises are not the same, and the brand structure of the industry has become different. Some traditional strong brands have begun to decline due to unclear strategies and poor management. At the same time, some companies with strong market competitiveness and good management have shown that the stronger the stronger.
Increased market competition
Since last year, the brand furniture company, which claims to have the largest domestic production and sales volume, has closed 2/3 stores in Beijing, and has completely withdrawn the mainstream home stores in Beijing such as Lanjinglijia, Jimei and Chengwaicheng. The dynasty furniture claimed to be a strategic transformation, but the informed sources revealed that it was due to poor business operations and declining performance. At the same time, Zhejiang famous brand Lihao sofa was exposed to 60% of the mainstream stores in Beijing within one year, showing a large rout, which is also related to its lack of competitiveness and business disadvantage.
Old brands such as Dynasty Furniture and Lihao have successively lost in the first-tier markets such as Beijing and Guangzhou, reflecting the survival dilemma of the traditional furniture industry during the industrial transition period.
Chen Xiaotai, chairman of Baiqiang Furniture, analyzed that the development of the furniture industry has a great relationship with the consumption trend. The popular trend of furniture products will affect the development of the brand. Some traditional big brands do not adapt to the market and withdraw from the market, and are also related to this trend.
Looking at the furniture industry bases such as Foshan and Dongguan, in the past, some small manufacturers were closed down due to economic influence. This year, some medium-sized furniture manufacturers also frequently reported the transformation and closure. Some of the industry's deep-seated contradictions and problems that the furniture industry was temporarily concealed during the period of rapid growth began to gradually emerge as the market environment deteriorated. In the first half of this year, Guangdong's domestic sales of furniture was 61 billion yuan, up 8% year-on-year, a decrease of 2 percentage points over the 10% increase in the same period last year, and far lower than the average annual growth rate of 16.3% before 2012.
Qu Nini, vice president of Qumei, told reporters that compared with the furniture market in previous years, this year's passenger flow has dropped significantly, and market competition is intensifying. An industry insider bluntly told reporters that this year's market is not as good as last year, many first-line brands have begun to withdraw from big cities, and the market outlook is not so optimistic.
Brand pattern differentiation
With the tightening of property control policies, the furniture industry has entered the reshuffle period. The continued downturn in the economy and the fierce market competition have intensified the “polarization†of the industry.
From the furniture exhibition, this year's three major furniture exhibitions in Guangdong showed a trend: big brands are still exhibiting, old faces are pushing new products, and they are all big booths, big propaganda, and there is a differentiation with the new factory pushing new products. This phenomenon will be further deepened at the upcoming Autumn Furniture Fair.
From the perspective of the consumer market, in the consumer centers of Beijing, Guangzhou, Shanghai and other consumer brands, there has been a differentiation of brands. Traditional brands such as Dynasty and Lihao have closed stores in the first-line market this year. At the same time, the circulation giants actually The company has launched a strong European and American family, positioning the high-end market, and taking the “big store modelâ€. Its core is to integrate the big brands in the second and third-line markets, display large-scale and large-scale, and eliminate some small brands that cannot keep up with the competitive advantages and cannot improve their strength. It can be seen that the consumer market has entered the stage of brand shuffling, and the strong is more favored by the store.
From the perspective of the production base, through the feedback of some information in the Pearl River Delta and the Yangtze River Delta, the medium-sized furniture factory has experienced difficulties in operation, and the unfavorable rumors of boss running and capital chain breaks linger over these furniture manufacturing bases. According to the latest data from the General Administration of Customs, China’s export counterattack in July showed a positive growth of 5.1%. However, furniture exports have been significantly delayed. The export value in July was US$4.14 billion, down 6.2% year-on-year. At the same time, due to the influence of the state on the macro-control of real estate, the domestic sales of furniture also showed a slowdown in growth. In the case of a bad economic situation, the dual pressures of low export prices and weak domestic sales have brought certain difficulties to the traditional furniture manufacturing industry.
Enterprises face transformation
Wang Xuanqing, deputy director of the Circulation Industry Development Department of the Ministry of Commerce, said at the inaugural meeting of the China Association for the Advancement of Markets that with the deepening and strengthening of the national real estate regulation and control policy, the Chinese furniture and building materials industry has reached a period of transformation, innovation and development. At present, China's circulation industry has gradually abandoned the previous land-based battles, the blind expansion mode and the vicious competition, and entered the period of research for the new urbanization.
Zhu Changling, chairman of the China Furniture Association, said that China's furniture industry has entered a stage of low growth. The economy is down, the furniture industry is affected, the market competition is becoming increasingly fierce, and the industry is in urgent need of transformation and upgrading. In the case of overcapacity in the industry, new markets must be developed, and enterprises should regard consumer demand as the core of their operations.
In the context of uncertain international environment and continuous market decline, “transformation and upgrading†has become the consensus of the whole industry. Some companies with a sense of smell have begun business transformation. Zhao Jiayu, president of the City Window, said that the original domestic sales were mainly targeted at first- and second-tier cities, but last year the overall share in this sector declined, while the export increased by 33%. At the same time, it has created a sales model for opening a store in foreign countries, and the effect is very good.
At the same time, some traditional big brands have begun to integrate and upgrade on the channel. For example, the e-commerce platform and independent store model that have been highly sought after in recent years are actually a manifestation of diversification, transformation and upgrading of corporate channels.
“When the market is relatively weak, how to use this time difference for transformation and upgrading will determine the future development of the company.†Chen Xiaotai said that from the furniture manufacturing industry to the retail terminal, the enterprise management level is improved through the manufacturing platform to maximize the per capita output value. Or the incentives for reforming employees, etc. These are all part of the transformation and upgrading, and are also involved in the current top 100.
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