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Since 2012, under the pressure of tight regulation of real estate, weakening demand and trade barriers between Europe and the United States, some furniture companies have experienced declining sales, sharply reduced profits, and even fell into a state of loss. The news of reducing production, closing stores and layoffs has emerged one after another. Faced with a tough market environment, the contrarian breakout has become a topic that every furniture company must face.
Industry dilemma
According to China Research Puhua's "2013-2017 China Furniture Market Survey Analysis and Development Trend Forecast Research Report", the overweight of real estate control policies has caused the real estate industry to enter a cold winter, which undoubtedly cast a shadow over the furniture industry downstream of real estate. Just when China's furniture industry fell into a trough, the trade barriers bills of countries such as Europe and the United States showed a tendency to bombard. Under the shackles of internal and external factors, some furniture companies generally have a decline in sales performance, a sharp drop in profits, and even a loss.
The EU recently formally adopted the “Wood and Wood Products Regulations and New Environmental Design Directivesâ€, which will further increase the barriers to the export of wood products in China.
The analysts of the China Research Institute's furniture industry pointed out that with the increase in raw materials and labor costs, the production costs of domestic enterprises have been continuously improved, and the foreign sales prices have not increased, directly compressing the profit margin of enterprises. The appreciation of the renminbi has further reduced corporate profits, and the new EU regulations are undoubtedly worse.
Recently, the 2012 mid-term profit warning announcement of the Dynasty Furniture shows that “as of June 30, 2012, the unaudited consolidated profit for the six months will be reduced by more than 90% year-on-year. After the announcement, the royal family’s furniture valuation plummeted as high as 10.69. %.
In fact, the decline in the performance of the Dynasty furniture is actually a microcosm of the entire furniture industry. According to incomplete statistics, in 2011, more than 70 small and medium-sized furniture enterprises in Shenzhen closed down. In all parts of the country, there was also a phenomenon of excess furniture stores and closed stores. The furniture brand in Beijing was less than half a year in the second half of 2011. Five stores were closed; sales of major brands also experienced varying degrees of decline and loss.
Market accelerated shuffling
According to China Research Puhua's "2013-2017 China Furniture Market Survey Analysis and Development Trend Forecast Research Report", there are currently more than 60,000 furniture enterprises in China, and there are only over 4,000 enterprises above designated size. Most of the companies are still fighting alone, rarely cooperate with other companies and other industries, lack of cluster awareness, and the competitiveness of enterprises is relatively weak. Without a big brand, it is difficult to raise awareness, which is a big pain for furniture companies.
At present, the situation of some small and medium-sized enterprises in China is closed down, and some of the barely maintained furniture companies have also seen a significant decline in store popularity. From the end of 2011 to this year, with the penetration of national real estate control policies and the rising cost of raw materials and labor, the sales growth of some furniture companies and dealers has narrowed and their profitability has declined.
There are many factors contributing to this phenomenon. In the first 10 years of China's furniture industry, the growth rate was over 30%. When the economic environment was unfavorable in the past two years, the market showed a transformation pain.
The industry analysts believe that the current lack of long-term planning in the industry, blindly follow the trend of the phenomenon, the competition in the low-end market is increasingly fierce, product homogeneity is serious, and even the price war, the reshuffle trend of the survival of the fittest is very obvious.
In addition, the domestic furniture industry brand is more chaotic, lacking high value-added Chinese brands, and well-known furniture brands with independent intellectual property rights are rare. There is a huge gap between product quality and developed countries, which directly affects the international status of China's furniture enterprises and directly affects the long-term development of China's furniture exports.
According to analysts from the China Research Institute, the furniture industry will face a reshuffle in the next three to five years. In the context of the global economic downturn, the reshuffle of the Chinese furniture market has just begun. Under the influence of market rules, through resource integration, shuffling has positive significance for the long-term development of the entire furniture industry; at the same time, this is a new challenge for every enterprise. At present, furniture companies should work hard on product innovation, design, production technology, quality control, and internal management to reduce costs and improve overall competitiveness.