Boost in Domestic Home Furnishing Market in China
Posted on 25 September 2016 by KenResearch Consumer Products and Retail,
Ken Research announced its latest publication on “Furniture and Floor Coverings Retailing in China-Market Summary & Forecasts” which aptly describes the latest scenario of retail market for furniture and floor coverings. Looking at China economy, this report provides comprehensive knowledge of emerging trends, forecasts and opportunities to 2020. Further, it provides detailed analysis of consumer trends, changing economic and population factors. This report provides an insightful analysis of key furniture and floor covering retailers of China.
Until 2015, China was world’s fastest growing economy which led to tremendous growth in all major sectors of economy. Attributing to this excellent growth of Chinese economy, retail market for furniture and floor covering also witnessed substantial growth. Looking at Chinese economy, this report provides comprehensive knowledge of emerging trends, forecasts and opportunities to 2020. Further, it provides detailed analysis of consumer trends, changing economic and population factors. This report provides an insightful analysis of key furniture and floor covering retailers of China.
China’s furniture and floor covering market
Floor coverings market
According to a report by floor covering institute, “By 2025 cities will construct 40 billion square meters of floor space in 5 million buildings, of which up to 50,000 will be skyscrapers – the equivalent of building up to two Chicago’s every year. The incremental growth alone in urban China’s consumption between 2008 and 2025 will be the equivalent to the creation of a new market the size of Germany’s in 2007.” Thisenhancement of demand for floor covering is playing pivotal role in expansion and growth of floor covering retail market of China. Most demanded floor covering type is ceramic tile followed by carpet and rugs, resilient, wood and bamboo, laminate and stone. Outstanding innovations in Chinese floor industry is observed which is not only improving domestic demand but also increasing demand for Chinese floor coverings globally. With industrial worth of USD13.3 billion, floor covering market is expected to grow further.
In last 20 years, China has become one of the largest production base and one of the largest exporter of furniture in the world. Pearl River delta area is most popular destination for furniture buyers followed by Yangtze River delta area, Bohai Sea surrounding area and northeast furniture zone. Different industrial cluster of China specialize in production, export and retail of different sorts of furniture. Example- Dayong and Guangdong are famous for its rosewood furniture production base. Demand for all sorts of furniture including home furniture, office furniture, hotel and guesthouse furniture and public institution furniture is rising which is met both from domestic production and imports.
Imports of furniture product in China in 2014:
|Description||2014 ( USD million)|
|Other seats with wooden frames||121.7|
|Other upholstered seats with wooden frames||75.1|
|Wooden furniture for kitchen use||106.0|
|Wooden furniture for bedroom||138.1|
|Other metal furniture||56.0|
|Furniture of other material||70.5|
|Other wooden furniture||333.0|
(Source: Global Trade Atlas)
Sales and distribution channels
There were 3 conventional distribution channels of furniture and floor covering products in China: first, through distributers, second, by renting a shop and selling products themselves and third, by selling products in malls, furniture marts and sophisticated markets. Recently, sales of furniture and floor coverings products are done through various channels like Home furniture and homewares retailers; hypermarkets, supermarkets and hard-discounters; online; department stores; value, variety stores and general merchandise retailers; home improvement and gardening supplies retailers; other general and non-specialist direct retailers; cash and carries and warehouse clubs; other specialist retailers. Home furniture and homeware retailers, department stores, hypermarkets, supermarkets, and hard discounters are the major sales channels for furniture and floor coverings.
Major macroeconomic trends of furniture and floor covering retail market of China
Both furniture and floor covering market has shown a remarkable growth and expansion in past few years and is expected to grow further despite of recent economic slowdown in China. Statistical evidence to support this growth is as follows:
- The retail marketof furniture and floor coverings is expected to experience annual growth of 13.09% over forecast period (2016-20).
- The market is anticipated to have a share of 3.3% in total retail sales by 2020.
- Per capita spending on furniture and floor coverings is expected to rise in forecast period.
- Market is expected to have Compound Annual Growth Rate (CAGR) of 12.5% over the next five years.
- Home furniture and homeware retailers contribute 76.4% of spending on furniture and floor coverings in 2015.
- The share on online spending on overall furniture and floor coverings is forecast to reach 11.9% by 2020.
Various factors responsible for outstanding growth and expansion of market are:
- Rising Gross Domestic Product (GDP) and growth rate
- Indicatorsof economic stability and prosperity like per capita GDP and per capita disposable income were rising in China. Chinese economy became world’s fastest growing economy in 2015.
Historical ranking by nominal GDP
|1990||China was not among the top 10|
|1995||China was the 8th largest world economy|
|2000||China was the 6th largest world economy|
|2005||China was the 5th largest world economy|
|2010||China was the 2nd largest world economy|
|2015||China was the largest world economy|
(Source: The World Bank)
- Huge domestic demand
Tremendous domestic consumption demand is observed in China due to rising GDP. Other factors responsible for this rising demands are:
- Rising population
China is the most populous nation in the world and due to this huge population domestic demand is quite high. Thus, expenditure on floor coverings and furniture is also very high in domestic economy leading to expansion of the market.
Again, due to rising GDP, standard of living of people is improving drastically. Real estate construction is undertaken to fulfill this demand for urban dwellings which is subsequently leading to rise in demand for furniture and floor coverings in China.
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