The Chinese furniture industry has formed a certain industrial scale after more than 30 years of development. In recent years, the rapid growth of custom furniture has become one of the most obvious trends in the Chinese furniture market.
Compared to finished furniture, custom furniture appears The time is relatively late, and the development process in China has only been more than ten years, but the development speed is amazing. It has grown into a custom furniture industry with an annual output value of over 100 billion.
Before 2010, custom furniture was expensive, now Custom furniture has “flyed into the homes of ordinary people.” 80, 90 younger generation of consumers have become the main consumer power in the home market, they prefer personalized, one-stop whole house customization.
2017 is a thriving custom furniture market In the year, the performance in capital and market is outstanding. In the first half of 2017, there were 6 customized companies landing in the capital market. According to the recently disclosed annual report of listed companies in the first quarter of 2018, the overall growth of custom-made enterprises has maintained a high-speed growth. Among them, Europa Home and Sophia have achieved outstanding results, with revenues of 1.906 billion yuan and 1.243 billion yuan respectively, leading the custom industry. It is foreseeable that the custom furniture market will usher in a year of continuous growth.
Customized furniture industry status and trends
1, the industry is growing rapidly, but the market share is small.
Compared to traditional finished furniture Customized furniture can satisfy consumers’ personal needs and is loved by younger generations of consumers. Custom furniture has developed rapidly in the past few years, but finished furniture still accounts for more than 70% of the furniture market. Custom furniture accounts for less than 20% and has a small market share.
2, emerging sales channels are rapidly emerging .
The e-commerce channel is rapidly emerging, As of 2017, the road to furniture e-commerce has been around for six years. The data shows that more than 80% of furniture companies pay great attention to e-commerce, more than 60% of furniture companies are planning to implement, about 30% have been deeply involved, and 5% have achieved good results; some national chain decoration companies have laid out the entire industrial chain Into the furniture consumer market; with the proposal of the intensive housing policy, at present, large real estate developers are vigorously developing furniture model rooms, providing users with personalized home solutions, and cooperation with real estate agents has become an important channel for custom furniture sales.
3, overall home industry consumption upgrade The channel sinks obviously.
With the deepening of urbanization And after 80, 90, it became a social subject, and the trend of household consumption upgrading was obvious. According to the data of China Cabinet Network, in 2016, the proportion of the whole cabinets purchased in the second and third tier cities reached 61%, which was 6 percentage points higher than that in 2015. Other categories also showed the same characteristics.
Three-fourth and below cities, consumers have already In the wave of consumption upgrades, but has not yet formed a complete home store, the rental cost is relatively low, this part of the future consumption potential will become a must for custom furniture companies.
4, the overall home industry market concentration is further improved, head The ministry companies occupy more market share.
In recent years, domestic overall home Industry market concentration has steadily increased, but is still at a low level. With the wave of consumption upgrades, consumers are paying more attention to brand and quality. Advantageous enterprises will use the effect of their own brands to increase the promotion of low-end and low-end brands. The survival space of small and medium-sized enterprises with low brand and poor service will be squeezed. On the other hand, the research and development capabilities of large enterprises themselves. And the service level will attract more middle and high-end consumers, and seize more shares in the market.
5, extension category, deepen ” Whole house customization” big home strategy.
With the production technology of the enterprise Enhancements and changes in people’s consumption concepts have gradually expanded from cabinets and wardrobes to living rooms, study rooms and restaurants. In line with the trend of consumption, custom furniture companies have developed towards the whole house. The custom wardrobe brand Sophia has also added a new production line of custom doors and windows and custom curtains this year. Through the extension category, the “full house customization” big home strategy has been deepened.
Customer Industry’s Prosperity Point concerns
1 The whole industry has entered the custom field, the market competition is fierce, and the average profit rate of the industry may decline.
In recent years, home customization has flourished Development has also attracted many companies across the border, covering finished furniture, ceramic sanitary ware, home improvement, soft furnishings, flooring, panels, home appliances and doors and windows. According to the survey data of the Guangzhou Jianbo Fair, 60% of the companies have entered the custom field, and the fierce competition in the staking circle is close at hand.
Customer thresholds are relatively high, for businesses The system, design, production, channel and landing ability have higher requirements. It can be foreseen that for a certain period of time, there may be problems such as mixed products, insufficient production capacity and imperfect after-sales service, which have a great impact on the overall industry. Profit margins may fall.
2, “big home” may It is a false proposition.
At present, there are a lot of custom companies Make efforts to expand the product line and achieve high growth through category expansion. However, even in the “big home” category, the category is limited, so the expansion of category is not sustainable for growth.
At present, the main way to achieve “big home” is There are two kinds: one is the independent production of the enterprise, and the other is to expand the product line through acquisition. Both of these methods have major hidden dangers. On the one hand, the overall home contains a wide variety of products, the process is very different, the company can produce a limited number of products, cabinet companies may be able to do a closet, but the bathroom is a “outer”; on the other hand, through the acquisition of the expansion of the category The requirements for business management are extremely high.
In fact, whether through independent production or acquisition To be a “big home”, companies are to some extent using the brand effect of their own strong products in the consumer market. Obviously, this is a double-edged sword and it also increasesThe risk of damage to the brand’s reputation.
3, the customization industry still can’t get rid of The predicament of “high gross profit, low net profit”.
Customer industry chasing capital And under the push, the staking circle entered the white-hot stage. On the one hand, in order to broaden sales channels, the high cost of marketing is inevitable. On the other hand, the competition in the custom industry has reached the stage of “seeing the bayonet”, and the marketing wars and price wars between enterprises have made it difficult for the company’s net profit to rise.
4, real estate policy regulation, fine The decoration policy introduced the demand market for the extruded furniture industry.
Starting in 2016, Zhejiang In Shanghai, Jiangsu and other places, real estate intensive policies have been introduced. Before 2020 to 2025, the “raw house” will gradually withdraw from the real estate market, and 100% “complete decoration and finished product delivery” will be realized in new residential buildings. As a real estate post-cyclical industry, the furniture industry is at risk of falling market demand.
Four suggestions for breaking the forum
1, return to the source, Improve the competitiveness of core products.
regardless of “full house customization “It is still “small and specialized”. The advantage of a customized enterprise lies in its own excellent quality and precise grasp of consumer demand. The core products of customized enterprises have often formed high industry barriers, which is also the key to the influence of corporate brands. While expanding the product line, if the enterprise loses the highland already occupied in the segmentation, it is significant to the enterprise as a whole. hurt. Therefore, enterprises should return to the source, pay attention to the iterative innovation of core products, provide higher quality products, and enhance the competitiveness of the brand.
2, use brand advantage, recreate Star Products.
McKinsey has published a report forecast, By 2022, 76% of Chinese urban families will reach the middle class’s consumption level. With the improvement of material level and the awakening of personal consciousness, consumers pay more attention to the brand and are willing to pay for quality life, which means that brand building is more and more important for enterprises.
Currently, custom companies that offer total solutions are constantly Expansion of the product line, and they often only have a core advantage product, such as the European cabinet’s custom cabinets and Sofia’s custom wardrobe, other products rely on the core product brand influence and market reputation. This form is inherently risky and can easily damage the brand image. Conversely, custom furniture companies can use their brand effects to re-create star products and amplify brand value.
3, build from whole to local Top-down consumer thinking.
Current “big home” In fact, it is enterprise-oriented, and consumers will soon realize that the so-called personalized, one-stop shopping for homes is actually a “bundled sale” by enterprises using strong single products, and the consumer experience is difficult to improve. To make a “big home”, enterprises must truly focus on consumer demand.
4. Second-hand and refurbished homes are replacing new homes as a major source of demand for the furniture market.
Since 2005, China’s residential commercial housing has entered high speed During the ten years of development, due to the influence of real estate regulation and control policies, the industry has entered the post-real estate cycle era. The demand growth of first-time home purchases may continue to slow down, but the secondary demand for stocks may become a new profit growth point. The housing renovation cycle is about 7-10 years, with 50% of consumers choosing to renovate and calculate, the stock market update demand is huge. As far as the current market conditions are concerned, the cycle of re-decoration is gradually shortening.
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