China is a big exporter of household products and has always been dominated by European and American markets. With the implementation of the “Belt and Road Initiativeâ€, it has brought new opportunities for domestic home furnishing enterprises. M&A around the home industry chain has come one after another, with the goal of targeting overseas. What are the new trends in the development of home furnishing companies overseas this year?
It is understood that in the past two years, due to factors such as rising raw materials and labor costs, the cost advantage of China's home manufacturing industry has gradually weakened. In addition, Southeast Asia is also occupying some of its original market share in China. In the face of increasingly fierce competition in the international market, many home furnishing companies are taking the initiative in product innovation and improvement.
Yao Jiqing, President of Dongguan Moussi Bedding Products Co., Ltd.: Manufacturing cost advantage This bonus has passed, there is no such advantage, so when it comes to the world, it depends on what we rely on. For example, Dongguan, where we are located, is actually the most concentrated home industry chain in China. This is a very good foundation for going global. The second is that after you have this foundation, it is better to integrate the advantages of the world's industrial chain.
In a home furnishing company in Shenzhen, the reporter saw that the person in charge of the overseas market of the company was discussing with the design director the design style of the home products sold to the Middle East market. The design director told reporters that in order to quickly enter the overseas market, it is necessary to continuously improve the products according to the needs of overseas customers.
Zhuangwei Silk Shenzhen Lufu Bedding Co., Ltd. Design Director: Like the Middle East market, they will prefer white and light colors. It is the kind of gray and beige products. It may be because it is too hot. We will adjust according to some overseas markets. .
Yao Jiqing told reporters that his home furnishing company began to carry out a globalized layout as early as 2011, and established a self-owned brand store in Australia, and achieved good results. In recent years, the implementation of the “Belt and Road Initiative†has brought new opportunities for many domestic household enterprises to expand overseas markets. In the past two years, his company has opened more than 3,600 stores in more than 20 countries and regions.
Yao Jiqing products can lead the trend, and this trend is not only in China, but also in Australia, Italy can lead the trend. Why do this? In fact, in 2005, we introduced an international team of designers to do this. The overseas market grew by about 40% this year.
It is understood that the road to overseas distribution of the home industry has already opened. On November 13, Gujiajiao announced that it intends to acquire a 51% stake in Quanzhou Tunbao Home Technology Co., Ltd. for 424 million yuan through equity transfer and capital increase. Quanzhou Tunbao Home is the leading exporter of domestic mattresses. The main market is Europe. The acquisition of Gujiashan will strengthen the company's mattress business and make up for the shortage of mattress export. The reporter visited a number of enterprises and learned that with the gradual recognition of Chinese household products in foreign markets, the export growth of high-end products of domestic household enterprises has become more obvious this year.
Kong Jian, general manager of Shenzhen Lufu Bedding Co., Ltd.: In the past, overseas buyers came to China to purchase, often buying low-value, low-value-added products. From 2014 to 2015, we exported a cabinet, a 40-foot The amount of the cabinet is about 60 to 80,000 US dollars, but in the past two years, we exported a 40-foot cabinet, the value of which is about 250,000 to 300,000 US dollars.
Online and offline acceleration integration helps home furnishing companies gain market share
In the face of increasingly fierce competition, domestic homes in addition to grab the global market, but also deepen the potential of the domestic market, pay more attention to the experience of offline store customers. At the same time, with the rapid development of the domestic e-commerce market, home furnishing enterprises hope to accelerate the integration of online and offline, win more market share, and look at the reporter's investigation.
A home sales store reporter in Guangzhou saw that Mr. Wang is buying household items for his new home. He told reporters that unlike his previous experience of visiting home stores, today's home stores have a better experience and more products.
Mr. Wang: I like a lot of space, and then I can layout it very comprehensively and modernize. I want what I want. Every space is like my own living room bedroom, I can choose here.
During the visit, the reporter learned that with the rapid development of the domestic e-commerce market, after becoming the main consumer of the 80s and 90s, they tend to understand product information online. Many young people prefer to buy home products online. The changes in the market have led many home furnishing companies that have only focused on offline retail stores to engage in e-commerce, hoping to attract more traffic online and allow consumers to experience more offline stores.
Wang Bing, Vice President of Sophia Home Furnishing Co., Ltd.: We also vigorously invest in online communication with consumers and the construction of consumer viscosity. The traffic is sent to the corresponding store, and then the professional designer of the store will contact you. And then convert. We are currently about 16% of our overall performance online.
Some home furnishing companies not only sell on the Internet, but more importantly, they can attract more consumers to offline stores in this way. Especially in recent years, with the upgrading of domestic consumption concepts and consumer demand, people gradually improve the standard of consumer experience. The rise of the experience economy has allowed some home furnishing companies to seize the opportunities brought about by market changes and pay more and more attention to the experience of consumers in offline stores. Some home stores have expanded from the previous few hundred square meters to thousands of square meters now.
Yao Jiqing first makes product experience. Once you use your product through this experience, you can't put it down. The stickiness of the product should be very high. The second one is how you sell the front end, let him have this kind of experience, that is to say To do this kind of scene experience, that is to say, different people have different preferences, he can choose what he likes here.
According to industry analysts, with the advent of the new retail era, home furnishing companies that focus on furniture products integrate online and offline resources to bring better products and services to consumers, thus changing the sales model of home furnishing enterprises. Win a place in the market competition. According to the latest data from the National Bureau of Statistics, from January to October 2018, the national retail sales of furniture reached 182 billion yuan, a year-on-year increase of 10.1%. According to data from the Prospective Industry Research Institute, the scale of China's furniture e-commerce market exceeded 100 billion yuan in 2014. By 2017, the scale of China's furniture e-commerce market has grown to 165 billion yuan.
Zhuangweiyuan Shenzhen Yuanfangyuan Industrial Development Co., Ltd. President: Through the online drainage, to create a better experience for offline customers, we also let consumers better experience our products through the expansion of the store, through After this approach, our overall sales this year have increased by 20%.
Smart homes have two major pain points to increase research and development and increase sales
With the development of science and technology, “smart†has become a way of life. The home furnishing industry has also begun to pay attention to the needs of users. Keeping up with the social trend and getting involved in the research and development of smart homes, while bringing convenience to life, it has also increased the market for enterprises. Competitiveness.
Ms. Jin, who has lived and worked in Shenzhen for many years, told reporters that more and more smart products have appeared around her in the past two years, which has brought great convenience to life. Especially today's smart home products, not only the price is more grounded than a few years ago, the product is also more intelligent.
Ms. Jin: This mattress will adjust different angles according to different needs of the human body. For example, when I work a day, I am tired. When I go home, I want to raise my feet a little bit. This will make my body feel very relaxed. When I sleep, because it has memory function, I can follow me. I usually adjust the angle of the mattress I like at any time.
In a smart home research and development department of a home furnishing enterprise in Dongguan, the reporter saw that the person in charge of the department is working with the research and development personnel to test a smart mattress. The person in charge told the reporter that the rapid development of the Internet of Things, big data, cloud computing and artificial intelligence in the past two years has provided a more mature and complete technical foundation for the development of smart homes, which has greatly improved the intelligence of products. The R&D team increased research and development efforts, collected and analyzed user sleep data, and continuously optimized the products so that users can quickly adjust the fitness of the smart mattress and the human body through the app.
Zhang Xiaoyun Director of Intelligent Product Development, Dongguan Mousse Bedding Company, Dongguan City, Guangdong Province: Since our small batch production in December 2017, we have basically done this test for one year, set up by our app, our bed Pads have different hardness to match different people. At the same time, we collect the data collected by the softness and hardness in the background, and we aim to achieve a mattress that provides our customers with the best comfort and can match our customers' bodies as soon as possible.
It is understood that with the development of smart homes, more and more people are beginning to understand and buy smart homes. However, compared with ordinary homes, the price of smart homes is still higher, which also hinders the rapid spread of smart homes. Nowadays, with the maturity of technology, the cost of smart homes has been decreasing year by year, and sales have increased significantly.
Kong Jian: It is because of the two pain points of smart home, one is costly, and the other is that the experience is not good. We are investing in R&D. The smart bed greatly increases the customer's experience. Even when watching TV, it can have a unique memory key that can remember your favorite angle and achieve multi-angle adjustment. In fact, since 2013, our cost has been reduced by about 30% per year. By the end of this year, our smart bed sales accounted for about 60% of our system.
According to the data from the Prospective Industry Research Institute's "China Smart Home Equipment Industry Market Prospects and Investment Strategy Planning Report", the size of China's smart home market reached 60.57 billion yuan in 2016, a year-on-year growth rate of 50.15%. It is expected that smart homes will usher in the next few years. . By 2018, the smart home market will reach 139.6 billion yuan. By 2020, China is expected to become the largest smart home market in Asia.
Home sector performance growth slows experts suggest high valuation risk
Recently, the listed companies in the household goods sector have successively released the third quarterly report and the annual report. The companies with certain competitiveness are still achieving steady growth, but the growth rate has slowed down compared with the previous ones. So, how should investors know the home sector? Long-term investment opportunities?
Among the 28 listed companies in the Shenwan Industry Secondary Household Index, 4 of the 6 households that have disclosed their 2018 performance forecast have expected growth. Among them, Sofia expects a net profit of 997 million yuan to 1.179 billion yuan in 2018, an increase of 10% to 30%; Piano expects a net profit of 129 million yuan to 149 million yuan in 2018, an increase of 25% to 45%. Judging from the 28 published quarterly reports of 2018 in the home sector, there are 17 net profit growth. Among them, Gujiajia three quarterly report net profit of 786 million yuan, an increase of 26.7%; Meike home three quarterly report net profit of 337 million, an increase of 30.37%.
Wang Bing I think the reason for the growth of the whole industry is because consumption is still growing. Although the growth rate has come down, the whole consumption is still growing, and consumption is still upgrading. In this context, despite the real estate regulation in the past two years, the number of new home transactions will be less, but the demand for second-hand housing stocks for our homes is growing rapidly. I think that a home furnishing company with diversified channels, strong product research and development capabilities and a sound supply chain system can be strong and strong, and has excellent performance in the capital market.
According to the data of Wande, the household goods index fell 39.91% from the beginning of 2018, while the Shanghai Composite Index fell 21.44%, while the household goods index underperformed the Shanghai Composite Index by 18.47 percentage points.
Zhou Haichen, chief analyst of Shenwan Hongyuan Securities Light Industry: Although the performance of the entire home furnishing industry is still growing this year, the growth rate has slowed down. Under the background of real estate regulation and control, the sales area (growth rate) of residential commercial housing has slowed down sharply. This is one reason. The other is the pressure of channel expansion and capacity injection brought by the intensive listing of many customized enterprises in 2017, which makes the custom home business increase speed. block. The high growth in the previous period corresponds to a high valuation, and the decline in the growth rate has also caused the valuation level to drop significantly.
Experts believe that the investment opportunities in the home sector are expected to focus on two areas. The first is the finished home sector. Finished homes can focus on the softer home industry with a better competitive landscape. Such companies are expected to benefit from the logic of increasing industry concentration. The second aspect is the custom home sector. Customized homes are currently invaded by a large amount of capital, and competition in capacity and channel expansion is intensifying. The custom home industry should focus on companies with stronger comprehensive capabilities. In the period of intensified competition in the industry, leading companies can actively consolidate and strengthen their competitive advantages, and hope to increase market share.
Zhou Haichen: The potential risk is the impact of real estate sales on the lag of the entire home industry chain. This is one aspect. The other is that the staged competition may continue to intensify. We suggest that investors pay attention to the future trend of the competition in the whole industry, and on the other hand, we select leading companies with core competitiveness.
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