Reviewing the status quo of the furniture industry in 2011, calmly responding to and looking into the future

Called by Professor Guo Shiping as the most dangerous in 2011, the various phenomena in the furniture industry can be summarized as: Da Vinci ruined the luxury brand, the big environment ruined the "domestic blue ocean" and continued the low tide to break the furniture profit chain. Looking forward to 2012, according to the policy and international trend of the Central Economic Conference on the continued strict control of real estate, the development of the domestic furniture industry can be summarized as: the rise of the county market, shutting down and changing frequency, the furniture industry returning to the essence .

Da Vinci ruined luxury goods

On July 10, 2011, CCTV's "Weekly Quality Report" broadcasted "Da Vinci's high-priced furniture "foreign brand" identity was accused of fraud. CCTV reporter said: After more than half a year of investigation, it was found that a considerable part of the price of Da Vinci's sales was not produced in Italy at all, and the raw materials used were not the valuable wood that Da Vinci claimed. After testing, some of the Da Vinci furniture purchased by consumers were even judged to be unqualified products, and many harmful substances exceeded the standard. The subsequent one-day tour of the bonded area in the bonded area made the Chinese people completely disappointed with the high-end furniture, and the value of high-end furniture and the trust of the furniture industry fell to freezing point. CCTV, which originally claimed to continue to expose more evidence of Da Vinci furniture fraud, did not follow up on the matter.

At the end of 2011, Da Vinci defended himself on the official website and claimed that he was framed by the shackles. However, the majority of netizens did not appreciate it. The online public opinion was one-sided. He believed that Da Vinci first confessed his nose and confessed his mistakes. There must be another hidden feeling. Dramatically, Da Vinci claimed that shortly after being detained, the recordings of Da Vinci’s head, Pan Zhuang Xiuhua, and the Jinghua Times Li Wen’s chat were recorded on the Internet. The recording incident pointed to Da Vinci’s reconciliation with the CCTV’s head and the CCTV. Suspected of bribing the media.

At this point, the Da Vinci incident completely out of the furniture industry, becoming a typical example of the luxury propaganda of the luxury Chinese people talking about after the meal. This not only makes high-end furniture and solid wood furniture the hardest hit by the industry's trust crisis, but also causes the public to have a crisis of trust in the luxury goods of all walks of life.

At the beginning of the Da Vinci incident, people in the industry generally underestimated their lethality. It is generally believed that this incident will be the same as other unqualified incidents of furniture, and will become tomorrow's yellow flowers with the emergence of other hot news. But with Da Vinci's various crisis public relations efforts to save sales, more and more companies are beginning to realize the seriousness of the incident.

The big environment ruined the "domestic blue ocean"

In 2011, it was the freezing period of industry development. The growth of domestic and foreign sales declined at the same time. The phenomenon of the closure of small and medium-sized furniture enterprises was sometimes reported in the newspapers. The closing of brand stores was not uncommon. The dealers dropped their positions and the proportion of losses increased sharply. Exports, Europe and the United States as the export of China's furniture industry

The main destination, the European debt crisis has expanded, and the impact of the US Wall Street incident has spread. The rapid growth of China's exports for many years has declined significantly in 2011, and the export growth rate has fallen from double digits to single digits. According to the recent data released by the Zhejiang Family Association: Zhejiang furniture exports in 2011 totaled 7.6 billion US dollars, an increase of 8.3% over the previous year. From 2006 to 2010, Zhejiang furniture industry's external exports increased from 3.01 billion US dollars to 7.019 billion US dollars. In the past five years, the growth rate was 126.4%, with an average annual growth rate of 25%.

Domestically, the four major producing areas have experienced a decline in sales, rising costs, and increased tax burden. In the international financial crisis of 2008, although the sales volume of traditional export bases such as Guangdong and Zhejiang was affected to a certain extent, Sichuan furniture became a unique and strong rise, and became a model for domestic sales success, which made the national furniture people admire.

During the “Eleventh Five-Year Plan” period from 2006 to 2010, the average annual growth rate of the furniture industry in Sichuan Province exceeded 40%. However, in 2011, the furniture industry in Sichuan Province achieved a total industrial output value of 68.22 billion yuan, a year-on-year increase of 29.3%. The growth rate was much lower than that of previous years. The decline in growth rate made many furniture companies fail to achieve the development goals set at the beginning of the year.

In the 2008 export crisis, the uniqueness of Sichuan furniture made Guangdong and Zhejiang furniture people realize that they had been pursuing the dollar and the euro and forgotten the large-scale blue ocean of the domestic market. However, with the continuous regulation of real estate, with the tightening of domestic financial policies, as more and more export-oriented enterprises turn to domestic sales, with the expansion of the furniture industry park throughout the country, with the expansion of the number of stores several times the growth of consumer demand The domestic blue ocean has become a red sea.

Continuous low tide to break the furniture profit chain

In the market research conducted by the author from October to November 2011, a senior dealer in Zhejiang summed up his sales path: “Before 2000, in order to pick up the goods as soon as possible, consumers will be good when they place orders. Language, and even send a gift for me to put his single row in front. The products are in short supply, we ask the manufacturers to ship, and even go to the factory to grab the goods. Later, with the increase of furniture companies, supply and demand are more balanced, but the furniture dealers basically It’s all about making money. It’s just a question of making more money. But since 2006, with the increase in furniture stores and the increase in grades, the sales volume of single stores has become less and less, the operating costs have become higher and higher, and the price war has become more and more fierce. 2011 In the year, there is sales in activities, and there is no sales without activities. In the past, it was a store sales, and when customers came to the door, they could live very well. Now, various methods such as designer commissions, community marketing, group purchases, etc. are constantly being introduced. As we get more and more tired, our profits are getting lower and lower.” At the end of 2008, after the furniture sales fell slightly, it immediately rebounded in 2009, but since 2010, with the turnover of real estate transactions New lows, furniture sales are not the lowest, only lower. Before 2008, the sales price of furniture was several times the ex-factory price, and with the decline of sales volume, the increase of stores, the radiation radius of dealers' single stores was seriously reduced, and the cost of labor increased, the profits of dealers were severely squeezed. In 2011, only 30% of dealers in first-tier cities made money.

Furniture companies are not easy to live. It is estimated that in 2011, the prices of raw materials such as wood, hardware and glue for furniture companies rose by more than 10%, labor costs increased by more than 20%, and financial costs increased by 19%. Some solid wood raw materials even appear to double the price. Furniture companies are out of work all the year round. With the continuous increase in bank deposit reserve ratio, it is difficult for private enterprises to obtain low-interest loans from banks, and they have turned to the private sector to find high-interest loans. The continuous decline in consumer demand has made dealers increasingly difficult to survive. In order to maintain sales channels, it is difficult for companies to raise ex-factory prices and choose to maintain prices to support dealers. Although the sales volume of the model furniture increased in 2011, Xu Guofang, the chairman of the board of directors, said at the annual meeting of the Guangdong Furniture Chamber of Commerce: In 2008, I said that the industry should hold a group for the winter, and now it should “salt the grain for the winter”. It can be seen that all enterprises are experiencing the test of falling profits.

Since 2006, the furniture industry has gradually reduced its profits. Today, profits have been reduced to nodes that are difficult for some companies to survive. The development of various industries will experience a reciprocal cycle from high profit to low profit to high profit. The furniture industry has not formed a group of absolute leading enterprises. The continuous decline in industry profits has caused 20% of SMEs to face bankruptcy, and market share has concentrated on surviving enterprises.

The rise of the prefecture market

The home industry is a downstream industry of real estate. The rapid development of China's furniture industry in the past 30 years, in addition to the promotion of foreign sales, the rapid development of the domestic real estate industry is the most important booster, it can be said that the development trend and speed of real estate directly determines The direction and speed of the furniture industry, the furniture industry is a follower of the real estate industry.

In the context of strict national control of real estate, more than 40 large and medium-sized cities joined the ranks of purchases in 2011. From the real estate transaction volume and the characteristics of real estate enterprises to take the land, the real estate transaction volume in the first-tier cities has hit record lows. The sales of 30% in the same period of last year when the sales of the National Day and this year's New Year's Day were not enough. In order to reduce the pressure on capital and avoid the regulation of policies, real estate enterprises have turned to the development of second- and third-tier cities. The turn of real estate has determined that the furniture industry will inevitably sink.

Looking at the furniture market in the second- and third-tier cities in China (mainly in the prefecture-level cities of the mainland and county-level cities in the coastal areas), the market is characterized by fewer stores, less competition, extensive operations, and increased consumer demand. Most inland-level cities and coastal county-level cities do not have national, super-large-scale stores, mostly based on local small and medium-sized stores. Often the store owner is the dealer, a store of several thousand square meters, is the brand of their own agents, thus shortening the channel, reducing the cost, and more conducive to the development of the industry. With the development of the regional economy, the economy of these places has also been greatly developed, and a considerable number of consumers already have the strength to consume high-end furniture. Major domestic brands have gradually lowered their positions and developed into these areas. This trend will become more apparent in the coming year.

Shutdown and frequency change

The reshuffling of furniture circulation has increased the number of SMEs on the verge of bankruptcy. In 2011, the Hangzhou Peace Furniture Expo Center, the home of the home, and the home of the beautiful century, closed or changed. This phenomenon has not only occurred in the first-tier cities where there are surplus stores in Hangzhou and Harbin, but also similar store closures. The peak of dealers’ withdrawals has also been staged in major stores. The furniture industry is experiencing a partial closure of the business caused by lower profits, and the result is an increase in industry concentration.

In 2011, large-scale brand furniture companies were generally more resistant to risks than small ones. According to the company's production capacity and marketing capability assessment, Zhejiang's billion-scale furniture companies were all profitable in 2011, and some enterprises' sales have risen sharply. This phenomenon also appears in Guangdong's furniture enterprises. These large-scale, brand-sounding companies continue to select high-quality, like-minded dealers nationwide, while SMEs are hard to find. According to statistics, in 2011, more than 70 small and medium-sized furniture companies in Shenzhen closed down.

Some companies and distributors use "support" and "熬"

To describe the current status of the industry, who can survive this winter, you can see the spring of the industry. From the current domestic and international economic situation, the policy environment has not changed significantly, the industry will continue to be severe winter, and some enterprises and dealers with poor strength will continue to withdraw. Less than the first-tier cities, real estate transactions have turned down, and the furniture industry will continue to be colder and colder. In this long winter, some small and medium-sized enterprises will continue to seek help from large enterprises due to the break of the capital chain, and will be merged by large enterprises or become their component suppliers, and OEM products for large enterprises. Some enterprises with brand advantages and counter-market growth can take advantage of low-cost acquisition of raw and auxiliary materials and factories to expand market share and become the dominant player in the industry.

The furniture industry returns to the essence

Furniture is a practical art, and the furniture industry is an industry that meets the individual needs of consumers. This is the essence of the modern furniture industry. Investment guru Buffett said: Only when the tide recedes will you know who is swimming naked. In the industry freeze period of nearly one year, although the sales volume of most enterprises is declining, there are still many high-quality enterprises whose sales continue to rise, even up to 30%. Analysis of the common characteristics of these companies, they have seized the essence of the industry, with core competitiveness, such as stable and distinctive product style, high-quality first-line shopping guides and sound after-sales service.

In the 2011 market survey, the author surveyed more than 500 furniture dealers, including many dealers who want to change brands. In the description of the characteristics of the selected brands, the preferred conditions for most dealers are the top three companies in the industry. A product with a unique design style. In the cold winter of furniture sales, the enterprise products with these conditions bring continuous profits to the dealers, and those losing dealers also begin to reflect on the slow sales of their products, find the essence of the industry in the test of the crisis, and awareness The importance of seizing the industry's essential products. Coupled with the negative impact of the Da Vinci incident on high-end brands, more and more dealers and companies are aware that those bubbles that are blown up will eventually be shattered, and false propaganda and inferior products will be eliminated by the market. Creating a beautiful and environmentally friendly living environment for consumers and giving them appropriate prices is a belief that industry companies should adhere to.

The furniture industry with internal and external difficulties has gone from high profit to low profit period, and the growth rate of the industry has declined: In 2010, the industrial output value of Zhejiang Province was 110 billion yuan, an increase of 24% over the previous year. At the end of 2011, the whole industry completed industrial sales. The output value was 211 billion yuan, a year-on-year increase of only 10%. The profit of enterprises above designated size was 2.23 billion yuan, down 10.78% year-on-year. 106 companies suffered losses, up 67.32% year-on-year. Yiye Zhiqiu, the second-ranked industrial base in China, is a representative of Zhejiang. From 2012 onwards, the first-line camp of the furniture industry will be formed initially, and the industry concentration will be greatly improved compared with previous years.

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