Profitability advances, how does the furniture industry turn around?

Recently, there have been many media reports that some well-known home companies and brands located in Guangzhou, Shenzhen and other places have fallen into the dilemma of shortage of funds or even closing down. In the past few years, China's economy has developed rapidly and the real estate market has been thriving. The home industry has been immersed in a “happiness”. However, the long-term prospects are not long. Since last year, the market environment has affected the fast-growing home industry. Recently, when they visited the market, they saw that compared with previous years, the number of home stores was “cold,” and sales volume declined, and the purchasing power declined, leaving many home stores and companies “headache”. Faced with such an industry situation, where will the future home industry go?

promote? Sales increase sales shrink

“In the previous two years, the monthly sales figures listed on the stores have often been staffed with sales records.” A sales person at the Meikailong home store of Zhengzhou Road, Zhengzhou City, told a reporter on condition of anonymity, “but from last year In the second half of the year, such records have been reduced and the overall market sales situation is not optimistic."

On June 7th, coincident with the weekend, the reporter visited Oukailong home store to see that many shops are conducting discount promotions. In a sofa brand sales counter called "Yueleku", a yellow-leather sofa, the market price is 21,800 yuan, after discount sale only 8,500 yuan, the price adjustment is relatively large; "love is still home" a Solid wood bed, the market price of 2,600 yuan, now only 999 yuan. The reporter saw that currently many counters are selling discounted products, and the price of some products has fallen by as much as 50%.

“From the start of the Spring Festival, we have been making preferential adjustments to product prices.” A shop owner specializing in sales of solid wood furniture told reporters, “Now every weekend we store will hold various activities, in addition to price discounts, but also presented fine On the surface, the price of the product is not much different from that of previous years, but there are more concessions and the price is actually falling. In spite of this, our sales volume is still lower than in the first half of last year."

During the visit, the reporter saw that although it was the weekend, home stores were somewhat "cold." “Discount offers are for sales promotions and sales.” According to the person in charge of the Jiahe home store in Zhenhai Road, Zhengzhou City, “As a result of the environmental impact, the sales of store products have fallen by 30%.”

Who has dragged the industry?

According to the statistics data of the China University of Industry and Commerce large database, as of the end of March 2015, there were 5186 furniture enterprises above designated size and 877 loss-making enterprises; the total assets of the furniture industry in China was 429.947 billion yuan, a year-on-year increase of 12.02%, and the total liabilities of the industry were 218.103 billion yuan, a year-on-year increase of 11.58%.

“Currently, the household industry has a high debt ratio, and many stores or companies have suffered losses.” said legend of the general manager of Henan Jiahe Home Furnishing Co., Ltd. “The reasons are related to the market environment, especially the current economic growth in China. Slow down, there is a 'bottleneck' in the development of the home industry and it is expected that this year's home industry economy will be in a downward trend and will be more severe."

Then, what exactly has affected the development of the home industry? Hu Shuyu, chairman of the Henan Provincial Furniture Association, said: “The downturn in the real estate market is an important reason. In the past few years, when the real estate market was hot, furniture, home improvement, building materials, etc. Industry led by its blowout blowout situation. However, starting last year, the real estate market performance decline, to the building materials home business has brought tremendous pressure for survival, the traditional advantage of the industry is facing a crisis of transition."

“In addition, the hot stock market has a negative impact on the development of the household industry. The stock market mad cow led to a large inflow of funds, bank deposits continued to decline, the existing home manufacturing industry is still facing bank borrowing difficulties, while the transfer of interest points of investors, the funds into the The market is difficult to stimulate the production of consumption, said the legend.

At present, furniture companies have experienced a “surge of closure”. In addition to the downturn in real estate and the impact of the stock market, the increase in costs such as labor and logistics has also brought a significant burden on companies. In addition, online shopping has a great impact on physical stores, making home sales have declined.

How to achieve a meager profit?

The sky-high price of mahogany furniture, mattresses worth millions of dollars and so on, many expensive furniture often appear in the terminal market. In the consumer's impression, the profits of furniture are very large, and it is not an exaggeration to use the term “high profits” to describe it. So what is the truth?

In response, an industry insider who is engaged in furniture manufacturing told the reporter: “Home products have gone through many procedures from the factory to sales, and even though prices have risen a lot after the end market, they tend to do more to increase the amount of running. Large discount activities, especially now, the overall home market downturn, home sales profits further narrowed, home manufacturing, circulation and other costs continue to increase, the original 'high profit' era has ended, the low profit becomes a home business and dealers need to face In such a situation, the home industry needs to accelerate its transformation in order to occupy an advantageous position in the tide of competition."

Then, where is the main force for the future of the home industry? In this regard, the legend says: “First of all, custom furniture will achieve rapid development, limited to the development of the real estate market, with limited floor space for high-level and home purchases, and the traditional furniture size is difficult to meet. For customers with different needs, customized furniture will develop rapidly in mid-2015. Secondly, e-commerce will be the next area in which the home furnishing industry will fight.”

It is understood that the total area of ​​domestic domestic stores has exceeded 40 million square meters, of which 50% of the store area is in excess. In response, the legend said: "As China's GDP decelerates and structural adjustments intensify, in the next three years, half of the home stores will be transformed or bankrupt, and the home market's painful period has arrived. This year, the home industry will face unprecedented difficulties in development. In the period, the existence of difficulties means innovation or transformation. It is expected that the government will introduce strong economic stimulus policies around 2017, and the home industry will adopt a three-year economic climb to achieve new development."