In 2010, the home furnishing market experienced a significant shift from popularity to indifference, marking a turning point for the industry. By year-end, the sector entered a fierce competition that lasted over a year. Numerous small workshops closed down, global chain building material stores withdrew from China, and surviving companies focused on self-preservation. It wasn't until 2012 that the pace of expansion slowed, with a renewed emphasis on service quality.
Despite being seen as an industry with low entry barriers, the home furnishing sector began to improve in quality. As one industry insider noted, the market is characterized by large industries and small businesses. While sales in 2013 didn't surpass those of 2012, many concepts introduced in 2012 became reality that year.
[Image: Romantic Korean Solid Wood Suite]
Smooth
Event: The Guangzhou Pazhou Furniture Fair saw the lowest number of visiting companies in a decade; the decoration volume entered a stable period.
According to statistics, in 2012, the total transaction volume of new and second-hand houses in Beijing reached 266,607 units, a 25.5% increase compared to 2011. As of November 13 this year, the total volume had reached 248,840 units, up 14.2% year-on-year. With most new housing deliveries expected between this year and next, the transaction volume for this year will be delivered in the coming years. Reports indicate that despite limited sales growth compared to last year, specific brands still showed significant growth. For example, according to the Beijing School Furniture Alliance, the sales of its alliance companies this year have increased by 10% to 20% compared to the same period last year.
Interestingly, when it comes to furniture exhibitions, the once lively scenes have changed dramatically. This year, the number of visiting companies dropped sharply. Taking the Guangzhou Pazhou Furniture Fair, which is highly anticipated in the industry, as an example, the number of visiting companies decreased by at least 40% compared to previous years—almost the lowest in the past ten years.
Comment: Yin Chao, Secretary-General of the Beijing Furniture Brand Alliance, stated that the decline in exhibition visitors reflects broader changes in the industry. Furniture exhibitions are primarily used by distributors to discover new brands and trends, but now the speed of brand updates has reached a rational stage. Moreover, today's home buyers are mainly first-time buyers rather than investors, which contributes to more stable consumption levels in the home market.
Liu Chen, vice chairman and secretary general of the Beijing Home Furnishing Industry Association, believes that according to the decoration cycle, homes should be renovated every 8 to 10 years. Now, demand for home improvement due to improved housing, second or third renovations, replacements, etc., has formed a long-term mechanism and will be released annually. This volume is expected to soon extend into the home industry.
Encircle
Events: Ju’s Home expanded to Daxing; Ju’s Home and Red Star Macalline expanded to third- and fourth-tier cities nationwide; Jimei Home entered Yanjiao and Tangshan; IKEA opened a store in Daxing, among others.
In 2011, the Jimei Shuitun store in Changping City's southwest opened. In 2012, the Shunyi Home opened. If the first two years were about careful expansion, then this year was almost frantic.
In addition to planning comprehensive stores in Daxing and Changping, Jimei is stationed in Yanjiao, while IKEA opened a store in Daxing and other areas in Beijing. Home furnishing companies have also started plans for rapid national expansion. Aligning with the trend of major housing companies shifting to third- and fourth-tier cities, Jimei opened stores in 11 regions including Jining, Cangzhou, Huainan, Zaozhuang, Yuncheng, Bijie, Hengyang, and Xinyang this year. They are also preparing for comprehensive stores in 41 regions including Xingtai, Kaifeng, Chengde, Zibo, and Sanya. Red Star Macalline is also expanding into smaller cities.
Comment: Yin Chao believes that the number of stores in many regions clearly exceeds capacity, so it's better to open new territories rather than compete in the same area. Suburban counties like Xiangshun and Pinggu, which lack standard hypermarkets, are ideal for expansion. Sinking into third- and fourth-tier cities, even smaller economically strong counties, is the only choice for home furnishing companies seeking new growth points. This development will drive the nationwide distribution of furniture and building materials brands. However, it should be noted that all enterprises must ensure "perfect and unified" service and management.
Electric Shock
Event: Home distribution companies collectively boycotted Tmall; actually went online; Yihua Wood and WeChat teamed up to develop CRM systems, etc.
On the eve of "Double 11," news that 19 domestic large-scale home furnishing stores, such as Red Star Macalline and Actual Home, jointly boycotted Tmall made home e-commerce a hot topic. In fact, since the beginning of "Double Eleven" in 2011, home furnishing companies had already shown interest in joining e-commerce platforms, but were hindered by the particularity of home products.
Now, after two years of摸索 (exploration), home furnishing companies have finally launched a formal offensive against e-commerce. Starting with official online operations, furniture and building materials brands have begun O2O attempts.
Comment: Industry insiders generally believe that home e-commerce is the trend, but unlike FMCG, home furnishing companies must not view e-commerce platforms purely as sales channels. They need to effectively respond to both online and offline interactions.
This year can be considered the beginning of e-commerce development in the home industry. There will always be problems in the future, but maintaining a consumer-oriented business philosophy is essential.
Import
Event: Hundreds of Home Furnishings established Eurohui International Home Pavilion; Chengwai Cheng joined hands with Huari to create Chengwai Cheng International Pavilion; Poltrona frau and other top home furnishing brands settled in their homes, etc.
In recent years, signs with the words "international home furnishing" have gradually increased, and the China International Home Furnishing Congregation Area centered around Beijing has begun to take shape.
Even in 2012, when the home market was struggling, imported home furnishings remained strong. For example, the sales of Respect Home reached 400 million yuan in 2012, an increase of nearly 30% compared to 2011, and a 60% increase in the first half of this year compared to the same period last year.
Such a development has attracted international big names who previously did not engage. For instance, Hästens, known for its Swedish royal mattress, Arclinea, Italy's top cabinet brand, Ca ssi na, Poltrona frau, the originator of modern furniture, and Germany's top sofa brand ROLF-BENZ, have all settled in the home.
Comment: Meng Xiangmin, vice president of home analysis, said that in addition to the European economic crisis in 2010, foreign brands have targeted the Chinese market and recognized the business philosophy and service level of Chinese agents and home distribution companies. Improvements in consumers' living standards and their rational demands for home life are also important driving forces.
Design
Event: Actually, the top floor design center was built; the home furnishing company played a leading role in each design week, etc.
Consumers who have visited home stores may feel that, after visiting a few more stores, they always find similar-looking furniture. Distressed by the lack of personalized furniture that stands out, they often compromise with "homogenization."
In August last year, the first original home living museum created by Red Star Macalline—"Yiyi Space"—opened. This year, the top design center of Actual Home was officially constructed. During the Beijing Fashion International Design Week and China Interior Design Week, home furnishing companies such as Red Star Macalline and Actual Home actively participated.
Comment: Liu Chen stated that from the perspective of market mechanisms and consumption trends, the market must retain companies with higher brand, service, product, perceived, and environmental protection added values. These values have become rigid requirements for consumers, and the demand for product freshness is increasing.
Yin Chao also believes that with the continuous improvement of people's living standards, consumers' requirements for furniture are no longer limited to practicality but have become an inseparable part of their pursuit of quality of life and lifestyle advocacy. As a result, personalization and artistry have naturally become the main conditions for consumers when purchasing home products.
The secret to the healthy and sustainable development of the home furnishing industry lies in giving its own unique design style and cultural connotation, and approaching consumers with sincerity and respect.
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