As the China Solid Wood Furniture Industry Base recognized by the China National Light Industry Council and the China Furniture Association, the city has always occupied its own place in the furniture industry at home and abroad. However, in recent years, especially this year, due to the sluggish domestic and international markets and the significant increase in the cost of labor and raw materials, the entire furniture industry has shifted from the “rapid expansion period†to the “shrinking front periodâ€, and the reshuffle has been adjusted. It is imperative.
"Small profits but quick turnover" can hardly work.
The rapid development period of Dalian furniture industry appeared in the late 1990s. Since then, the output value of the whole industry has been growing at a rate of about 17% per year. By 2008, the output value has reached about 12 billion yuan. However, with the outbreak of the international financial crisis, the growth momentum has been contained, and the output value is still hovering around 12 billion yuan.
On the one hand, the scale of the industry has not been further expanded. On the other hand, the cost of labor and raw materials has risen sharply, and the profits of enterprises have been continuously diluted. Under this circumstance, the furniture manufacturers in our city have invariably reduced the scale of production and moderately reduced production. According to industry insiders, due to the support of orders, the Dalian furniture industry has taken a development path of “small profits but quick turnoverâ€. However, with the decline in orders in the past two years, many companies have experienced overcapacity problems. Enterprises can only shrink their front lines and cut off some of their excess capacity.
European debt crisis, real estate regulation, furniture industry, "snow" plus "frost"
Over the years, Dalian's furniture industry is mainly based on foreign trade. There are thousands of furniture manufacturers in large and small cities, including more than 200 enterprises above designated size. Almost every family has foreign trade export business. However, with the outbreak of the European sovereign debt crisis and the weak economic recovery in the United States, the demand for foreign markets has declined significantly. According to the Secretary General of the Municipal Furniture Association, the period of furniture use abroad is relatively short. Many families have replaced new furniture in about three years. However, as the economy deteriorates, they bid farewell to this consumption pattern, and the frequency of replacement of furniture is greatly reduced. It also has a significant impact on the export of furniture in our city.
The domestic market has also fallen rapidly in the last year or two. In order to curb the excessive rise in housing prices, the state has increased its control over the real estate market, and various restrictions on purchases have been introduced. The furniture industry can be said to be one of the industries with the highest correlation with the real estate industry. In China, furniture is generally purchased only when new homes are renovated. The domestic demand market for furniture is falling as the real estate market declines.
Pay attention to brand building and change profit model
For how to deal with the industry's winter, to spend the "shuffling period", experts said that companies must focus on brand building, while further reducing various costs.
In the past, when looking at the export order production and processing, companies do not need to consider brand promotion and product sales. But now a large number of processing companies are facing transformation and must face the market personally. In this process, the establishment of the brand is the primary issue. The Secretary General of the Municipal Furniture Association believes that the furniture industry has entered the stage of brand consumption. This is not to say that consumers are blindly pursuing brands, but behind the brand are the contents of quality and service. Therefore, establishing your own brand is critical to gaining consumer recognition. Brands will become an important weight for companies to reshuffle in this round of industry.
In addition, marketing costs can be further reduced through e-commerce and other models, which will also have an important impact on the future development of the company. Nowadays, the popularity of online consumption in various fields is getting higher and higher, especially by the main consumer groups of furniture products from 20 to 45 years old. Therefore, furniture enterprises must quickly adapt to the emerging business model of online shopping, through online shopping. The marketing approach further reduces the cost of shop rents and other occupations and captures a broader market.
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