Furniture export enterprises, domestic and foreign countries are trapped back to the country to find business opportunities

Since the outbreak of the financial crisis in 2008, the furniture export market has continued to slump . The EU recently officially passed the “Wood and Wood Products Regulations and New Environmental Design Directives” to further improve the export of wood products to China, which has made the originally stormy export market worse. At the same time, the domestic demand market has been increasingly ruined by real estate regulation since 2011. Under the difficulties of internal and external affairs, Beijing and other places have successively introduced “trade-in” for furniture consumption, trying to promote the industry's recovery through stimulus policies.

1 overall loss

“In 2011, the sales of the entire furniture industry chain all declined. About 30% of the stores in the hypermarket lost money. This year, the loss spread to 50% to 60%.” Industry insiders told reporters that this figure is the current consensus in the industry. According to statistics, in the town of Dalingshan, the first town of domestic furniture export, more than 30% of the furniture enterprises are in a state of loss, and the phenomenon of bankruptcy is still intensifying.

Mr. Zhou, who came to Shenzhen in 1992, is a dealer relying on hypermarkets. He recently made a difficult decision: to reduce the number of eight stores in Baoan to three. "I have never encountered such a light off-season. I have been engaged in the furniture industry for 20 years. Last year, I lost hundreds of thousands. This year is even more difficult."

China is a big country in furniture production and a big consumer, but for many practitioners, the best situation no longer exists. Recalling the good time of the seller's market at the beginning of the business, Mr. Zhou couldn't conceal his enthusiasm: "At that time, the market had just risen, the sellers had fewer buyers, and the price could rise sharply during the holidays. The buyers had to keep saying good things when they picked up the goods. The freighter earns a lot of tips every month." What about now? His face turned, the furniture grew bigger and heavier, but now the delivery guys have no small fees for moving to high-rise buildings without elevators. Now, it can be seen that the market is here for a while.

"Summary down, this line earns fast, the loss is also very powerful, and the risk is relatively large." In Mr. Zhou's view, the background of the recent domestic demand stimulus policy is based on the downturn. He calculated the account with the reporter. A colleague who runs furniture shops in Sungang, Shenzhen, can't continue to support it. The monthly rent is 240 yuan per square meter. The selling cost of a few hundred square meters is only 60,000. The operating expenses of human and logistics expenses are about 100,000 yuan, and at least 200,000 yuan can be used to protect the capital in one month. "This is already over the middle of the month, only 10,000 yuan of income. In this way, each store loses money in one month. Nearly 100,000".

In contrast, Mr. Zhou’s store in Bao’an has a lower rental burden, but it is now at a loss. “On the one hand, oil prices have reached new highs, and the cost of distribution channels has been rising. On the other hand, due to inflation, the original operation The cost has risen sharply and the wages of employees are rising."

The reporter recently visited a number of large furniture stores, although during the "3?15" promotion period, most of these shops were deserted. In the big stores, only the boring staff members chatted online, and some shops even had black lights during business hours, only at the door. Post a huge discount notice.

“Now the counter salesperson sees the customer as if he is hungry.” Miss Xu, the store manager of Fuyong’s furniture store, described the business situation of the industry. She told reporters that the trend of the furniture industry and real estate "one glory, one loss and one loss", real estate in 2009 out of the long-term, the furniture industry upstream and downstream hot expansion, the past two years suffered real estate regulation, the furniture market has shrunk, previously large Businesses of scale expansion have tasted the pain.

“Low-price subletting, Wangpu subletting... all over the subletting, indicating a general downturn.” Mr. Zhou’s colleague, Li Mingzhen, who has been operating a four-year furniture store in Longgang, Shenzhen, signed the transfer agreement last week. The manpower and logistics are all rising in price, but the turnover has flown down to three thousand feet.” Li Mingzhen stressed: “Sublease is not the worst case. Many people run straight, and even the stores don’t want it.”

At the Shenzhen International Home Furnishings Exhibition, exhibitors generally reflected that the market was "poor" in the past two years. Although the year is in spring, their industry is still in the winter, and even can't guarantee whether they can get down. The peak season of half a year is coming. Due to the decline in the domestic market, many companies have indicated that they have reduced production capacity.

2 Low external demand

“The difference between export and domestic sales is that export orders usually require each pen to be profitable, but the market cultivation period of domestic sales is based on investment.” Yan Shaoling, general manager of Shenzhen Mubao Furniture Co., Ltd. told reporters that the company has entered a dozen In the past three years, from the export of timber and furniture to domestic sales, to promote their own brand, although in the brand cultivation stage, but also affected by real estate policy, but still optimistic about the future development space, "this industry does encounter difficulties, but it will not fall Drop it."

Furniture is a typical export-oriented industry. With the global economic downturn and the cost advantage of China's manufacturing industry gradually weakening, furniture exports have been hit hard. Zhu Qingyu, a light industry researcher at China Investment Consulting Co., said: "In 2011, due to the slowdown in the global economic development rate, the overseas market has insufficient consumer demand and the foreign trade situation has deteriorated. This has led many export-oriented furniture companies to switch their sales to domestic sales. It is the business direction chosen according to the changing economic situation and is the way for companies to seek new development."

In addition, the combination of domestic and foreign sales has also become the development path of many industry leaders. Liu Weihong, the director of Yihua Wood Industry, told the reporter: “Yihua Wood has aggressively expanded the domestic market in recent years. At present, the company sells domestically and externally for two-wheel drive. It is expected that the export sales will increase steadily, the domestic sales space will be huge, and the overall scale will increase. The domestic market direct sales and dealers are two-line force. The direct marketing market is mainly for first-tier and provincial capital cities. The dealer channel is mainly for second- and third-tier cities.” Liu Weihong revealed that the current gross profit margin of direct-operated stores is higher than that of the export market, and distribution. The gross profit margin of the business channel is equivalent to that of export. Yan Shaoling also revealed that compared with export OEMs, the gross profit margin of self-owned brands is higher.

Many industry insiders interviewed by the reporters said that the transformation of furniture export processing enterprises into domestic and foreign sales and production integration enterprises has become the trend of the times, many of which have already tasted the sweetness of domestic sales.

Why did the industry leaders focus on the export market before? The long-term tracking of the furniture industry, Oriental Securities analyst Zheng Wei told reporters: "Compared with domestic sales, the previous export is easier to make money, when the market is good, through the exhibition can be easily Selling products. The export mainly adopts the method of OEM and OEM, and does not need to take a lot of real money and silver to carry out brand building and channel construction."

Liu Weihong said: "The company's increase in domestic sales is mainly based on the consideration of production layout. Previously, the production capacity was limited. In recent years, the capital market has raised funds to expand production capacity, so the company can now deploy the domestic market." He stressed that exports to domestic sales for the company It is also a challenge. In the past, when you focused on exporting, you don't need to touch the consumer with zero distance, but the transformation of domestic sales needs to re-establish the brand and channel. Qiu Decheng analyzed that some of the listed peers have transformed themselves from export to domestic market, and have greatly improved their performance through the construction of large-scale experience halls and direct-operated stores. The biggest advantage of this approach is that the channels are firmly grasped, but the risks are early The investment is large and requires a lot of financial support.

3 shuffling acceleration

“In the past few years, Chinese furniture has been popular. Everyone has embraced it. Last year, Walnut and Wujinmu began to sell well. This year’s exhibition is all about follow-up products.” Qiu Decheng told reporters that there is a lack of long-term planning and blind follow-up in the industry. The competition in the middle and low-end market is becoming more and more fierce, the homogenization of products is serious, and even the price war is started. The reshuffle trend of the survival of the fittest is very obvious."

Liu Weihong told reporters that the EU's new regulations are expected to accelerate the industry's reshuffle. At present, Yihua Wood has less furniture exports to the EU, and it has not been affected. With the increase of entry barriers, weaker manufacturers will withdraw from the market. Recently, the EU has enacted new regulations requiring all manufacturers on the timber production and processing chain to submit basic information on the legality of timber sources, such as timber source, country and forest, wood volume and weight, and the name and address of the log supplier. Wood products will be severely punished.

Zhu Qingxuan believes: "For large furniture companies, the new EU regulations have raised the price of related products to a certain extent, and the price is expected to increase by 15% compared with that before the certification. For SMEs, the new regulations have a greater negative impact. On the one hand, SMEs have long been relying on low prices and low cost to enter the European and American furniture market. Identity certification has increased their cost pressure, or it is difficult to establish a foothold in the EU market."

According to Zhu Qingyu's analysis, in the long run, the new regulations will benefit the long-term development of China's furniture industry, and at the same time effectively regulate the market, further eliminate backward small and medium-sized enterprises, and improve the quality and grade of Chinese furniture export products. For listed companies, their brands and financing. The ability has certain advantages, so it is not affected much. "At the same time, with the export crocodile returning to the domestic market and exerting brand building and channel expansion, it is expected that the furniture industry will have a reshuffle in the next few years."

Judging from the public data, compared with the dismal operation of many dealers and manufacturers, the listed company's 2011 transcripts are bright. Meike shares (600337, shares) (600337) is expected to increase net profit in 2011 by more than 100% compared with 2010, mainly because "2011 domestic wholly-owned subsidiary Meikemeijia domestic retail business increased compared with the same period last year." Customized wardrobe faucet Sofia (002572, shares it) (002572) 2011 total operating income of 1.004 billion yuan, an increase of 45.67% over the previous year, net profit of 134 million yuan, an increase of 44.45% over the same period last year.

The reporter learned that China's furniture industry is big and small, and China's manufacturing has a price advantage. However, compared with European and American high-end furniture, Chinese brands with high added value are still rare. In the prospectus, Sofia said that China's furniture industry is dominated by small and medium-sized enterprises. Most furniture companies have a relatively short set-up time. There are not many well-known furniture brands with independent intellectual property rights. The design and development capabilities of furniture enterprises are not strong, and the furniture designers in the whole industry are lacking. The product imitation problem still exists.

Mr. Zhou, who has been involved in the furniture industry for 20 years, told reporters that the best business he has done since he started his career is the first 10 years. At that time, the industry was just emerging. “The first soup is the most fragrant.” In recent years, the industry has become increasingly competitive. Many strong manufacturers began to do direct sales, but also brought great pressure to dealers and agents.

“Not necessarily only the middle and high-end products are popular, the key is to find the market positioning.” Qiu Decheng told reporters that his company currently covers high-end and low-end product lines, and high-end mahogany products are still in the market development stage. The mid-end products that are cost-effective and fit the Chinese style, "The orders in these days are good, better than expected."

Mr. Qiu revealed that although most people in the industry are not optimistic about the market, he is more optimistic. "China's urbanization process has just begun, and the industry still has broad development space." Liu Weihong also expressed similar views when accepting reporters: "At present, domestic real estate regulation and control will not change much during the year, but the pace of urbanization is unstoppable, and rigid demand is also difficult to suppress. Overall, furniture There are still many market opportunities in the industry."

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