Hou Kepeng: The future pattern and strategic direction of China's furniture industry

On the occasion of the opening of the 3rd Shenzhen International Home Furnishings on July 27th, "What will change the future of China's furniture industry, sponsored by Shenzhen Furniture Industry Association and Shenzhen Furniture Research and Development Institute?" ----2013 China Furniture Industry Model Innovation and Change Road Innovation Forum, held in the 5th floor of Shenzhen Convention and Exhibition Center ç°• Du Fu Hall. Hou Kepeng, Executive Chairman of Shenzhen Furniture Industry Association, gave a keynote speech on the future structure and strategic direction of China's furniture industry.

The status quo of China's furniture industry

From the perspective of manufacturing, the five major manufacturing regions formed in the past 30 years of reform and opening up, including the Pearl River Delta, the Yangtze River Delta, the Bohai Sea, Shandong and Hebei, the Northeast and Sichuan, have not changed. But the structure has undergone profound changes. In the past, the soft furniture and panel furniture that are worthy of pride in the Guangdong area are gradually declining and replaced by panel furniture from Sichuan. But there is a category, custom-made panel furniture is booming, and software furniture is originally the core of Shenzhen manufacturing, but now there are only a few of the Guangdong software brands in the market? Instead, most of the small and medium-sized enterprises began to transform and began to make solid wood furniture, which is still called “high-end solid wood furniture”, but it faces strong resistance from Shandong and Tianjin. Therefore, Guangdong furniture and panel furniture are not dominant. Software furniture has lost a certain position. Solid wood furniture is facing strong pressure from other regions. The manufacturing industry used to be a big one in the Pearl River Delta. Now it has formed a three-legged trend. This “three-legged” is Guangdong, Bohai Rim, Hebei and Shandong, and then Sichuan. Not counting, East China is not big after all, after all, it is still based on exports. There is basically no decent brand in the Northeast, so the three-legged trend is basically formed.

Look at the retail industry, look at the store, the overall trend of the furniture retail industry with the hypermarket as the core has not changed, but there is a huge survival crisis. The next difficult situation is neither a manufacturer nor a factory. It is a store. The stores in the first and second lines are still able to survive, and the newly added stores have limited living space. It can be imagined that the stores in the first half of the year have been closed down in the first, second and third tier cities. Newly opened specials, it is difficult to attract investment. If it is said that the past is investment, now it can be said that it is seeking business, and the next step is likely to enter the business. This is a huge pressure on big shopping venues.

Look at the dealers again, because there are trade fairs in Guangdong and Shanghai as well as in various parts of the country at the professional level, and of course, Shenzhen Fair, there is a space for display in the terminal, or a space for consumers to contact, so In the past two decades, dealers have basically enjoyed their success. This kind of platform has not allowed these dealers to grow or grow rapidly. On the contrary, it has gradually shrunk. There are no one billion dealers in the country. It can be said that there is no one in the national chain, and there are not many influential in the province. Most of them are 70% or both. Individual households will basically disappear within five years.

Looking at the consumer again, the industry has not changed, but the consumption structure has undergone a fundamental change. The consumption structure has become polarized, facing the post-80s and post-90s, and polarization means high and low. The quality of consumer awareness, whether high, medium or low, consumers have no slack in the pursuit of furniture quality, whether it is bought online or bought in a physical store or in an experience store, all require quality. The experience of the consumer process, the dealer's factory is very concerned about the consumer experience.

The networking of consumer behavior and the networking of sales behavior have formed a big trend. In the future, the purchase of furniture by the two couples will basically be less and less. This is the status quo of the Chinese furniture industry.

Opportunities facing the Chinese furniture industry

First, urbanization can bring us huge market consumption needs. The urbanization rate of the Central Plains in the six central provinces is only 45% lower than the national average. In the six provinces of Henan, Hubei, Hubei, Chongqing and Hunan, the urbanization rate in East China has already broken through 65%. Shenzhen Dongguan can be said to be 100% urban, no Rural. According to international practice, the urbanization rate of more than 65% means that consumer demand tends to be stable. The central six provinces account for 45%. If the national 2030 plan is adopted, urbanization should reach 75%, and the central six provinces still have 30% space. . This is why the six provinces in the central region feel better than other cities under the premise of the recent two years of difficulty. Third- and fourth-tier cities are better than first- and second-tier cities.

The second opportunity, per capita income or per capita GDP is increasing year by year. Now China’s average GDP income is now nearly 5,000 US dollars. It is said that by the end of this year and early next year, it will exceed 8,000, and the per capita GDP will exceed 8,000 US dollars. It is said that the income level is fast, but because the appreciation of the renminbi is very fast, the depreciation of the US dollar is very fast, and the GDP per capita will increase substantially. According to the international common practice, when the per capita GDP exceeds 8,000, there is an essential difference with 5,000. Under 5,000 people only pursue material enjoyment or functional enjoyment, but more than 8,000. When people are more interested in the enjoyment of spiritual life, he is more concerned about the quality of life and life experience, which is an important reason why our furniture accessories can flourish so fast in recent years. In the past, there was a problem with food and clothing. Just solved the problem of buying and selling furniture just to solve the function of use. In the future, we must create a beautiful life field, which requires good looks and fun.

The challenges facing the Chinese furniture industry

The biggest challenge is the macroeconomic environment of the last two years. There are some small businesses in Shenzhen that have been unable to support. This industry will have an integration in the past two years. The big ones may be bigger, and the small ones will gradually withdraw from this field. This is a real problem. Within five years, the state has begun to stop building all the halls and museums, and also cut taxes for small and micro enterprises, because the country’s tax revenue has been negative for the past six months, but the state’s expenditure has not decreased. In the future, a large part of the public sector manufacturers will be converted into civilian manufacturers. Now this part basically accounts for 20% of the furniture industry. It will be seen in the next five years from next year. Jian, who is this part of the furniture manufacturer's office furniture sold to? There is no way out without switching to civilian channels. Therefore, the excess capacity of this industry will be adjusted due to the continued downturn in the macroeconomic environment.

On July 17, Shenzhen announced a supervision of 61 furniture companies from the beginning of August this year, the clean production of the furniture industry? VOC harmful gas emissions, in the first half of the year, Shenzhen has eliminated 1,300 backward capacity enterprises. If the 61 key regulated emission enterprises fail to meet the standards, the government will clean up. In May and June, Shenzhen will feel blue sky and white clouds, which is a significant reduction in nitrogen oxides in the air, due to the closure of many enterprises behind the manufacturing industry. Shenzhen City announced that Shenzhen's air quality ranks first in major cities, second only to Lhasa and Dali.

The second point is the challenge of the retail model. They all say that the dealers in Shenzhen are not reliable, but who are you looking for when you lose these dealers? The key is what model we use to change the existing model of relying on hypermarkets. If this model does not change, it means losing the opportunity for development. In the future, the retail industry is not eliminated from each other. It must be eliminated after the 80s. This industry is basically challenged.

The third challenge challenges the traditional thinking of the furniture manufacturing industry. The informationization of the furniture manufacturing industry is seriously backward. There are only a handful of enterprises that can fully use information technology. There are several in Shenzhen, several in Guangzhou, and several in Sichuan. Part of it is still in the semi-information of the original industrial production state, contrary to the emerging industrialization advocated by the country. Now many bosses are recommended by software and system companies to the manufacturing industry, and they are rejected. In fact, they have rejected many opportunities. It is a challenge of ideas. This industry only believes that God does not believe in people. Whoever does well is God, otherwise he does not believe. The furniture industry should wake up and accept these new things.

The fourth challenge to the knowledge stocks is not growing fast. The reason why this industry is in this state is that the talent structure is not right. The people in the first- and second-rate colleges are basically less than this industry. Therefore, in the future, this industry chain must have a breakthrough. People must have ideas, find ways to broaden their minds, and introduce more high-end talents to stimulate the constant change of this industry. Otherwise, if there is no accumulation of knowledge and technology, it is not easy for this industry to go far.

The fifth challenge is that the industry's comprehensive ability is not enough. This ability is not just a business capability. Not only is the terminal's shopping guide 10% able to speak, but 90% nonsense. It also includes the ability to plan for the future. Many people in this industry only see it, and they will not think about it in the next ten or twenty years. Recently, many Guangdong enterprises have purchased many factories in Taiwan that have closed down in Shenzhen. Is this a solution to a stock problem or an incremental problem? If you solve the problem of stocks, no one can drive you away. If you solve the incremental problem, do you buy a factory in the surrounding area and solve the problem of a production workshop? Can you solve a national layout, provide dealers, provide fast delivery, quick installation, or provide convenient services for dealers? Therefore, many factory owners have gone the old road that Taiwanese and Hong Kong people have taken 20 years ago.

The future direction of China's furniture industry

1. The current large-scale plant formation will change in the future. This change is based on two reasons:

(1) Due to the adjustment of industrial structure in coastal areas. Shenzhen Qianhai, with a registered capital of 5 billion yuan, Qianhai just shot a piece of land price of 5.1 billion, 100,000 square meters, according to the floor price of more than 10,000 yuan, is still a wasteland.

(2) Endogenous factors, Guangdong business owners must have ideal ambitions, can not favor the Shenzhen one domain, must lay out the production system, distribution system and retail system in the country, which is determined by two factors of internal and external factors. Shenzhen has no space. Therefore, the future of manufacturing must be developed in the six provinces of the Central Plains.

2. With the national layout of the manufacturing industry, the retail format will also change. Now the better location in the first, second and third tier cities is not necessarily a good location in the future. With the renewal of the city and the difficulty of transportation, including people’s consumption habits The change, to consider what kind of model is the best. It must be suburbanized, home-integrated, casual, and experiential, and this way of shopping. If such a region can radiate to a radius of 300 kilometers, and the brand is sufficiently concentrated, the dealers in the property are mainly dealers. They used to be hypermarkets. This model is called the scientific development concept. Focus on Xiaoxuan Jinma Kaixuan CBD project in Zhengzhou, you can also pay attention to the Anhui project led by the Shenzhen Furniture Industry Association. This is the dealer as the main body, no matter how the future development, the furniture industry is not fast-moving consumer goods, offline transactions, there must be experience, distribution, installation and after-sales service issues. This agglomeration must be along the high-speed rail, the population is dense enough, the traffic is convenient enough, and the radius of the radiation is sufficient for intensive.

3. The future development trend is customization. Many dealers reacted that the wardrobe could not be sold now. It was not sold out. It was taken away by others. Who took it away? Take away the custom business. In the future, whether you can grab the decorative field or the downstream home decoration field, you can see and do it. The so-called customization is basically divided into two categories, one is called high-end customization, and the high-end customization is to satisfy people's high-end consumer spiritual needs or material needs, such as Golden Phoenix and Alexandra. There are also mass customizations that are better done, such as the Sophia wardrobe and the Shangpin home. In the past few years, companies that have made customizations have experienced good growth. Soon after the listed company wants the interim bulletin, Sophia's wardrobe may grow by 50%, 60%, and there is also a growth rate in the Shangpin housing. Therefore, the dealer is difficult and the factory is difficult. It is to steal this piece from others.

4. The trend of home integration. Looking at these exhibitions today, the Shenzhen Furniture Industry Association wants to push a model to integrate upstream decorative materials and furniture, including downstream accessories, so that they can maximize their profits in the same space. It is possible for people to take away this part of the customization and whether they can also grab someone else's things, including whether they can grab these things in the decorative field. Shenzhen has a strong industry that is decorated, and 80% of hotels are the share of decoration in Shenzhen. But the decorating companies that serve these parties often do not dominate us, because furniture is often dominated by their designers. If the designer and soft service are strong enough, they can lead them.

5. There is no doubt that the furniture service industry will be separated from the manufacturing industry and become an independent industry with strong support for the manufacturing industry. The success of the Shenzhen Furniture Research and Development Institute is a successful example. In the past, the furniture industry was difficult, but the furniture research and development institute operated very well, and more and more people are looking for third-party services. The design of solid wood furniture for basic northern manufacturing enterprises is basically completed by Shenzhen. Their communication design system and service system design are basically provided by Shenzhen.

This is the future of the five major trends based on our analysis.

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