China is the world’s most dynamic economy and the factory of the world when matter to Decoration products.
Why domestic demand in China is so high? Because of the China’s growing middle class population, rising disposable income, and urbanization are all factors driving the growth of China’s home furniture market. The rise in disposable income has led people to spend more to live a comfortable life. This is expected to increase the China home furniture market’s growth potential. Home furniture consumption is expected to rise due to rising consumer spending and increasing disposable income. source daxue
Furniture demand in China increase
Furniture for your home includes furniture such as beds, mattresses, tables, tabletops, desks and chairs, storage cabinets and sofas. China is a large country with its own furniture industry. Multi-purpose, smart furniture has gained popularity in recent years to meet growing demand for home furniture. People are increasingly willing to spend on home decoration as the Chinese standard of living improves. Smart techniques, innovative raw materials, and new technology can be used to serve the furniture market.
This article provide by buyfromCharlotte provides a complete overview of China’s home furniture market. It includes an assessment of the National Accounts, Economy, emerging market trends, major changes in market dynamics, market overview, and an assessment of the National accounts.
The growth in the market for building materials is greater than that of the home-decorating industry. Both sectors are slowly balancing out. The home-decorating sector occupied 48% of China’s total decoration market output in 2017, while the building materials market made up 52%. The continued growth of China’s building materials market may indicate that China is still in the stage where it needs to implement basic infrastructure and public facilities.
China’s home-decorating market
China’s home-decorating market refers to interior decoration of private houses.
The continuous increase in real estate sales as well as the Chinese economy have provided the foundation for the home-decorating industry to continue growing. In 2018, the market size was Y=2.23 trillion rmb. It is expected to grow to Y=2.59 billion rmb by 2020.
China’s home-decoration market is driven by new homes. New home decoration contributes nearly 73% to the total revenue.
The main consumer of home-decorating products is the millennial generation, who were born between the 80s and the 90s. They account for more than 60% of market revenue. The 70-year-olds are a significant consumer group with 16%. The remaining 22% are from other ages.
The growth of E-commerce home decorators
The Chinese E-commerce home decoration market has boomed in 2015. This has contributed to and intensified competition in the overall decoration market.
Kitchen Furniture Segment
The majority of kitchen furniture is used for cooking, storage, and washing. This market will have huge potential and growth opportunities due to the large proportion of urban dwellers. In the near future, residential property transactions are expected to rise due to rising real incomes, low unemployment, and increased demand for kitchen furniture.
Zaozuo a Chinese startup for product designers that connects them with Chinese customers. Zaozuo’s product manager uses WeChat for data collection from customers. He also conducts research on overseas talent to create new designs that are market-ready every year.
If you’re open to using a design thinking approach to uncover hidden needs in China, you won’t be disappointed from a market research perspective.
China’s E-commerce home-decorating market reached Y=258.9 billion rmb in 2018, and experienced a 36% increase in its market size. It is still experiencing a bottleneck period, with a penetration rate of less than 5%. This is a relatively low rate compared to E-commerce markets like car-hailing platforms or online travel agencies, which have around 1/3 penetration rates.
e-Commerce in China for Luxury products
E-commerce helps to address non-equilibrium profit margins in traditional home decoration market. E-commerce home decor companies standardize decorating methods and prices. They also simplify the process. Many consumers feel that E-commerce home-decor companies charge too much for the quality. Many consumers are returning to traditional home-decoration methods, as e-commerce doesn’t always provide satisfactory after-service provision.
Consumers demand transparency and information symmetry. The future of E-commerce decoration will not be based on price wars but quality and value battles.
China Decoration Companies
DIY home decor is becoming a popular trend due to its freedom of creation. It can be used in the living, dining, and bedroom areas, as well as in the study. The market of more than 4 trillion yuan is often described as “a huge cake that cannot be ignored”.
Digitalization and the Internet are key to marketing DIY home decoration. In 2016, more than 1000 Chinese consumers were surveyed. Over 60% of respondents said that they would use the internet to buy products and services for their home decor.
It is spread in China’s decoration market. Around 82% of Chinese decorating companies are traditional, while 18% are Ecommerce home-decorating businesses. China currently has a lot of small and medium-sized decoration companies. With a low entry barrier, the market is large and has a huge market. The industry’s total number of firms saw a drop of 2.22% between 2015 and 2016, but the total output was up by Y=0.277 billion rmb. This could indicate that market share is becoming more concentrated due to the standardization of Chinese decoration market regulations.
This market is huge with millions and hundreds of small businesses.
More than 70% of Chinese decoration companies experienced revenue growth during the first half of 2018. Gold Mantis (Jin Tang Long ) had the highest revenue growth of Y=10.904 trillion rmb, while China Red Star (Hong Xing Mei Kai Lang ) ranked second with Y=6.3744 billion rmb revenue. These are the top three home-decorating players in the market: China Red Star, Gold Mantis and Oppe In (Ou Pai Jia Ju).
Market share for E-commerce home decoration in China
However, the E-commerce home-decorating market has a concentrated presence. To8to.com , Tu Ba Tu ) held around 40% and Jia.com 27% of the total market share.
The overall market is competitive but has not reached maturity. This means that small businesses still have a lot of room to grow alongside medium- and large-sized companies.
There are many opportunities in China’s decoration market
China’s home decoration is a hot Market.
China’s decoration products are largely homogeneous at the moment. As their lifestyles improve and their consumption increases, so do consumers. However, they are slowly valuing creativity and quality as well as environmental aspects of decoration products. China ‘s aesthetic home decoration market may have the answer for consumers’ worries. This refers to furniture brands that offer high quality, well-designed products and are mid-range to high-end. Companies have begun to implement strategies to target high-end consumers through offering customized product design and environmentally friendly materials.
Standardized regulation of the decoration market
The industry will become more concentrated as regulations are imposed on the Chinese decoration market. Unlike the current market with mixed standards, prices and quality, the future market expectation will be transparency and price stability. Future development in E-commerce home decoration will be possible by focusing on quality products and after-sales support explained the lawyer Jing Wang associate
The smart home is the new standard for modern Chinese households
Chinese smart home stores offer a new experience for Chinese customers. These experiences are a way for intelligent home technology sellers to market their products to potential customers. Smart home technologies include Homepod and automatic adjusting lights. Smart home stores in China let customers touch, test and feel the products in person. This brick-and-mortar store allows customers to interact directly with the product. Decoration and furniture companies should be aware of smart home technology as a potential trend.