The current Chinese furniture manufacturing industry is being hit by internal and external problems. Under the impact of the financial tsunami, many export companies have transformed and expanded domestic sales out of trouble. However, since the end of last year, in addition to the continued contraction of export orders, the domestic sales market has also experienced a sharp decline, leading to negative growth in the first quarter of some companies that maintained growth last year. People in the Guangdong furniture industry expect that the first half of this year may be the most difficult period for the furniture industry. In the case of the existing overcapacity, if domestic and foreign orders continue to decrease, a new round of "closing tide" cannot be ruled out.
Behind the cold winter of the furniture industry is the recession of the global economy and the weakness of the domestic consumer market, which is more closely related to the contraction of the real estate industry. From the perspective of the industry, there are two reasons: one is that furniture hypermarkets and factories have a serious oversupply of production capacity; second, some hypermarkets are tempted by real estate interests to expand in an unordered manner, and "abduct" dealers and manufacturers to bring interest to all parties. Chaos. Facing the industry suffocation period caused by today's comprehensive environment, news of the closure and relocation of furniture manufacturers and home stores in first- and second-tier cities has been heard. The battle of life and death in the home industry will start.
Where is the way out for the home furnishing industry?
The successive "closing tide" shows that furniture companies can't develop with closed eyes like in the past. Facing the continuous cold winter of the market, in addition to continuing to exert efforts in the domestic market and achieving "walking on two legs", furniture companies must think about how to adjust their management methods and how to find a way out.
Channel change motivation is cost reduction
In such a severe upstream situation, the rising store costs have made the home furnishing business even worse. This is also one of the important reasons for furniture companies to actively establish independent stores and develop e-commerce channels. In an interview with reporters, Chen Jinfeng, manager of Styroland Shenzhen, said that home furnishing stores will be renovated almost every two or three years. In recent years, the pace of expansion has accelerated, and the resulting high rents have put too much pressure on each enterprise. Big, especially in first-tier cities. Affected by the property market's purchase restrictions, the number of home buyers and decorators directly decreased, which meant that the cake was shrinking. Some companies in the middle reaches naturally could not bear the high rents due to the decline in sales. On the other hand, at present, sales promotion in the store is endless, and the cycle is prolonged. Instead, many consumers have become more rationalized, and the wait-and-see attitude has increased. They believe that there will be promotional activities at any time, and they are not eager to close the deal. As a result, the volume of transactions brought by the stores decreased and the turnover of the merchants declined, highlighting the high cost.
In the fierce market competition, cost control is a heavy topic for furniture companies. The house is too expensive. After buying the house, the consumer's wallet is hollowed out. The owner always hopes to find good-quality and cheap products when buying furniture. The furniture cost is divided into the following parts: raw material cost, development cost, production cost, transportation cost, and sales cost. At present, the circulation cost of the furniture industry has reached more than 50%. In the composition of circulation costs, store rents and property management fees account for the vast majority of dealers' sales costs. In the first-tier cities, furniture stores often rent more than 100 yuan per square meter per month, which makes manufacturers and distributors feel pressured. How to reduce the cost of circulation has become one of the most concerned topics in the furniture industry, and has become the top priority for the furniture enterprises to solve their difficulties.
Furniture factory wholesale direct sales city breakout
Small profits but quick turnover is a key word for the home furnishing industry in 2011. Whether it is a building materials company or a furniture company, it is constantly expanding its operating scale. However, at the same time, with the increase in raw materials, logistics, labor and other operating costs, the home furnishing industry has Entering the era of high cost of operating channels, and in the era of high costs, lower profits and increase transaction volume are the most important.
Facing the high price of household goods, the National Chamber of Commerce and Industry Furniture Decoration Chamber of Commerce and Guangdong Furniture Chamber of Commerce took the lead in organizing the factory-built integrated sales and marketing platform. Jinhaima Furniture Factory Wholesale and Direct Sales City is about to land in Shenzhen. Branded furniture factories join hands with Jinhaima Home Mall in the central area of ​​Shenzhen, and jointly create an integrated wholesale and direct sales platform for exhibitions and sales, realizing direct face-to-face transactions between factories and consumers, reducing a large number of intermediate links, and making the wholesale price of furniture lower than the market price by 50% to 70%.
Industry Voice
Cost reduction is the key-Liu Ruiran (Shenzhen Desheng Furniture Direct Store Manager)
I think that the furniture industry is now in the stage of adjustment and development. If the enterprise still follows the routines of the past, it will definitely close down. There has never been a weak market, only a weak team, because the market demand still exists, I feel that facing the winter of the home furnishing industry, we should think about how to adapt to the market and drive market demand. A large part of the current market weakness is due to rising furniture prices. Therefore, how to ensure the profitability of enterprises and to significantly reduce the furniture market price is the key to driving the furniture market demand.
Chen Guorong (Shenzhen Style Furniture South China Marketing Director)
As far as I know, the growth of furniture companies in Chongqing and Chengdu is still very fast and has not been greatly affected. This shows that the market still exists, but it is just a question of how to adjust the operating methods of furniture companies. The collapse is not to say that all will die, but in the process of death, let more energetic and vital furniture companies take the opportunity to expand. I know that Southern Group has recently built factory wholesale cities in Chengdu, Chongqing, and Shenyang. The factory direct sales model is used to build an integrated platform for factory approval, development and sales, eliminating intermediate links and allowing furniture prices to return to value.
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