Faced with the severe market situation at home and abroad, domestic brand furniture companies have to think about new market strategies to deal with. Some companies have begun to turn off some of the furniture stores' flat sales of physical stores to reduce expenses. Others are beginning to consider entering the e-commerce arena.
Internal and external difficulties
Faced with more and more international barriers, the global economic downturn and the double-sided attack of domestic real estate regulation, coupled with the rise in raw material prices and labor costs, led to a gradual weakening of manufacturing advantages, and furniture exports suffered heavy losses. Under the influence of factors such as the decline in overseas orders, foreign anti-dumping policies, and expectations of RMB appreciation, some furniture companies engaged in export business have to shift their main markets to the domestic market.
According to cohabitation data of a well-known financial website in China, one of the 12 furniture listed companies suffered losses last year, and the net profit of six companies declined year-on-year; the performance of the first quarter of this year showed an accelerated decline, four companies suffered losses, and nine companies Net profit fell year-on-year. Judging from the semi-annual performance forecast, as of now, there are 8 companies that have announced performance forecasts. One of them is uncertain, one company has lost money, two companies have been reduced, and four companies have increased slightly.
The insiders pointed out that the advantage of export-oriented furniture enterprises lies in the huge production scale and efficient production and processing capacity. In the face of the decline in overseas orders, enterprises can choose to produce OEM products for local famous brands or imported brands sold in China.
However, the person in charge of a brand-name furniture company in Beijing, interviewed by the reporter of China Sankei Shimbun, said that the export orders are relatively stable, and usually they must have obvious profits before they can operate. However, after exporting to domestic sales, enterprises will face new development. The market channels are mainly cultivated in the early stage of the market, which means that they have to invest mainly, so it is difficult for enterprises that export to domestic sales to make profits in the short term. In addition, the products exported are mainly designed for the needs of overseas consumers. After turning to the domestic market, it is necessary to reposition according to the characteristics and habits of domestic consumers. This also takes time.
Despite the recent rebound in China's import and export data, the industry believes that the latter trend remains to be seen. Due to the global economic situation such as the European debt crisis, the situation of China's furniture and other foreign trade enterprises is still not optimistic.
Marriage e-commerce
With the marriage of e-commerce companies, can furniture companies get rid of the current dilemma through e-commerce? And e-commerce can follow the fast-moving consumer goods, 3C products and then a violent business category? This has become a topic of common concern in the industry today.
"China Sankei Shimbun" reporter learned in the Beijing area that Tesco Mall, Jingdong Mall, Nest Bee Net, Sina Leju and other e-commerce platforms have attracted such as Qu Mei, Nick Ai, the Federation, Disney, the Top 100 and many more. Home furniture brands to join. These e-commerce companies have also chosen to provide online entity experience stores in large-scale home stores such as Chengwai Cheng and Jimei, forming online and offline interactions. There are also some furniture brands that have launched their own online sales platforms, which form a good complement to e-commerce.
Ms. Jie, the head of Beijing Baiqiang Furniture Network, told the reporter of China Sankei Shimbun. Although some furniture companies entered the category of furniture e-commerce through Taobao platform in 2007, the e-commerce revolution of furniture enterprises began only last year. A relatively long-term progress. In particular, in 2012, when the development of the industry was in a slump, some well-known and established companies have opened up online shopping malls, trying to get rid of the current dilemma through this business model.
“Actually, furniture is a large non-standardized product. Consumers usually have certain doubts. Therefore, how to open up online and offline is a major obstacle to the development of furniture e-commerce.†Ms. Jie told China’s Sankei News reporter.
In a network entity experience store in the Outer Furniture Store in South Third Ring Road, the consumer, Miss Wang, consulted the sales staff about the color, size and price associated with the purchased furniture. She told the reporter of China Sankei Shimbun that it is no longer unfamiliar to online shopping. She can accept this kind of online sales behavior of furniture companies, but she must be more assured after reading it in the physical store, because there will be errors in color and so on. . Miss Wang’s words just confirmed the above concerns.
“Although it seems that the way for furniture companies to go to e-commerce is the trend of the times, in the process of transformation, it is the most important to formulate development strategies according to the characteristics of the company itself. How the future trend of the entire market depends on it? The overall operation quality and strength of the entire furniture company." China Furniture Association management slightly told the "China Sankei Shimbun" reporter.
Price wars start again
What makes the industry more worried is that, like the physical store, the furniture on the e-commerce platform is a big price war, and the discount is attractive.
"If online sales and physical store sales cannot be differentiated, just a price war, there will be a new crisis in the future." Wang Jianjun, professor of economic management at Henan University of Finance and Economics, told the reporter of China Sankei Shimbun. .
"China Sankei News" reporters in the Tmall Mall, Sina Leju and other online store survey found that the same style of products, different stores, discounts, often higher discounts are more popular, buyers are more.
According to industry insiders, these behaviors of furniture manufacturers are actually only changes in sales methods, and they are still fighting price wars, and the final result of price wars will undoubtedly reduce the profits of furniture manufacturers. The combination of traditional enterprises and e-commerce is not easy. The furniture e-commerce revolution still needs a process. In such a process, some enterprises will be eliminated.
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