In the latest report from the China Building Materials Circulation Association, Qin Zhanxue, the executive vice president, highlighted the challenges faced by building materials and home furnishing stores in 2012. He noted that December's performance followed a similar trend to November, with major marketplaces entering their seasonal slowdown. To cope with the off-peak season, retailers adopted regular holiday promotions as a key marketing strategy. At the start of the year, aggressive discount campaigns were not aimed at maximizing profit but rather at building customer loyalty and securing a stronger market position for the coming year.
According to data released by the association, the National Building Materials Index (BHI) for December 2012 stood at 106.48, representing a 3.32% drop from the previous month and a 0.72% decline compared to the same period in 2011. Sales for the previous month reached 100.6 billion yuan, down 5.92% from the prior month. Annual sales totaled 1,246.7 billion yuan, marking a 2.46% year-on-year decrease.
Qin also pointed out that over the past few years, the real estate sector has remained strong, prompting home furnishing hypermarkets to expand rapidly across major cities. This "land grab" has become a popular investment focus for the industry. However, the current market is now facing a downturn, not only due to the ripple effects of the real estate sector but also because of the consequences of excessive expansion. The blind growth of these stores has led to issues such as declining occupancy rates, difficulty in attracting investors, frequent changes in management, and challenges in collecting rent.
To overcome these difficulties, Qin Zhanxue emphasized that building materials and home furnishing companies must accelerate their transformation and modernization efforts. He suggested that they should conduct thorough research into the types of industries that align with urbanization trends, ensuring long-term sustainability and competitiveness in a challenging market environment.
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