Where Will The Center Of The Global Furniture Industry Chain Be
The history of the development of the modern furniture industry includes the following three stages: 1, the initial stage (1978-2000); 2, the stage of rough development (2001-2008); 3, the stage of excess capacity (2009 to present).
Manufacturing division of labor-Global Furniture Industry Chain
Developed countries and developing countries shoulder different tasks, and developed countries gradually complete the conversion from exporters to importers, and also complete the transformation from exporting products to exporting design concepts.
Data show that by the end of December 2018, the national furniture manufacturing industry had a loss of 12.5%, and the total accumulated losses of loss-making enterprises amounted to 3.28 billion yuan. After the cost advantage of China’s furniture manufacturing industry gradually weakened, it will open the industrial upgrading cycle, realize the production functions transferred overseas, rely on the design concept to create high value-added furniture products, and the future will be the era of furniture manufacturing enterprises’ design and brand enhancement. And after COVID-19 occurred, the global supply chain layout of new trends what are also enthusiastically discussed by the public？
Production technology-Global Furniture Industry Chain
Germany as the world’s leading industrial manufacturing technology, as well as the world’s second largest furniture exporter, Germany has a total of nearly 400 woodworking machinery factories focus on the production of high technology level of woodworking machinery equipment, manufacturing processes leading the world, but also the main equipment suppliers of Chinese furniture manufacturing enterprises.
Segmentation-Global Furniture Industry Chain
Compared with the international market, the concentration of China’s furniture market is low, and there are no leading enterprises with leading market shares yet, and no real leading enterprises in the segmented single product market with higher concentration. As of 2018, the market CR5 of China’s custom cabinetry industry is only 9.70%, and the mattress CR5 reaches about 15%.
The too-low level of market concentration means that there is still room for development and possibility for the market, and medium-sized and above home manufacturing companies may bend the rules at any time. For some time in the future, the furniture market is still a game of strength between companies in the same category. Single product track is still in competition, which will not appear across the multi-category monopoly enterprises.
At present, the furniture manufacturing field in the scale of the top-ranked enterprises are through the initiative to expand product categories, and strive to become a whole home service providers. For enterprises, the current furniture industry market competition with only a few categories is increasingly difficult to win in the market, the strength of the enterprise to the direction of the home, the first thing is to be able to enrich the product line, effectively reduce the dependence on a few categories, and at the same time bring consumers a one-stop shopping experience.
Sales channels
Furniture retail channels can be divided into direct sales model and distribution model. Furniture manufacturing companies on the one hand do not have extensive brand recognition, on the other hand, they also lack the manufacturing capacity to create a product matrix furniture, it is difficult to meet the needs of consumers one-stop consumption. Chinese furniture dealers mainly rely on the major furniture stores rather than independent stores, dealer channels are mainly chain furniture stores, non-chain furniture stores, online retail.
The localization of furniture stores in China is a serious problem, with chain stores weaker than local non-chain stores. This has led to the difficulty of chain stores to quickly layout across the country and rapidly increase their share, which is currently the highest for Red Star Macalline and Easy Home, which together accounted for 23.48% in 2018.
The chain furniture store channel industry is developing in a multi-directional trend. Professional home furnishing stores are transforming towards integrated consumer malls to attract foot traffic, or are directly cooperating with integrated superstores to integrate previously independent professional home furnishing stores into integrated malls with huge foot traffic.
Furniture manufacturing companies can also penetrate into the retail segment, and more furniture manufacturing companies will expand their direct channel layout in the future.
Furniture brands
The world’s high-end furniture brands are mainly concentrated in Europe and the United States, Italian furniture manufacturers have a unique advantage in the field of high-end furniture, the production of high-end furniture sold to Europe and the United States, the Middle East, North Africa and other affluent people more dense areas. Before 2005, Italy ranked first in the world in terms of total furniture exports, which was surpassed by China after 2005.
Demand side
The growth of real estate sales comes from two main drivers: first-time home ownership and improved housing. From a demographic perspective, the peak of China’s main home buying population has passed and improved demand will dominate the future. Furniture as a later link in the real estate industry chain, through the real estate sales area, furniture retail sales and furniture output value comparison, furniture manufacturing enterprises output value and real estate sales between the 8-12 month lag period.
Per capita consumption
In 2016, China’s per capita furniture consumption expenditure touched a high of 0.73% per year. In 2018 real estate sales slowed and residential furniture spending accounted for to 0.51%. 2018, furniture consumption per square meter per resident in the U.S. equated to RMB 19.76, while China spent RMB 3.36 per square meter per person in 2018. In terms of the proportion of furniture consumption expenditure per capita of total expenditure of residents in China and the United States, the proportion of furniture expenditure in China is still in the growth channel.
Enterprise development
In recent years, many furniture companies have felt the pressure. In terms of social development, it has not been long since consumers really started to pay attention to family and enjoy home life, and the consumer concept is still immature. The furniture industry has a short development cycle and is developing slowly. From within the enterprise, many furniture factory owners lack of innovation and self-breakthrough motivation, the enterprise is difficult to sustain rapid development.
Each enterprise is in the industrial ecology and needs to find its own position, re-examine the future of the industry and the top-level design of its own business, and build the corresponding capacity for this purpose.
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