Furniture industry in the future or trillion-level?Real estate is the wild card

2022-05-21 0 By

The China economic weekly “reporter Appalachian state | jiangxi ganzhou reported “ganzhou bamboo-shack now, factory business lineup to out of stock, basic logistics center in a state of congestion.”Chen Zhongfeng, chairman of Ganzhou Haiyue Furniture Co., LTD, told China Economic Weekly that “some furniture factories’ orders in December 2021 are two to three times those in November.”While the furniture business is hot, Chen Zhongfeng smelled a trace of abnormality: “We started as an e-commerce business, in the past because of the ‘Double 11’, the furniture sales in November is better than in December, but in 2021, the business in December is better than in November.””We may still be getting a real estate dividend,” he said, adding: “Consumers typically wait a year or two before buying furniture. So far, we haven’t felt the pinch of the downturn in the property sector, but what about in the future?”Nevertheless, analysis orgnaization is very optimistic to industry future however, its thinks, the intelligence that future household home installs and green change still can bring huge space to whole market, the industry may reach trillion level.Furniture factory online sales in December 2021 good to “strange” like real estate, furniture industry also exists “gold nine silver ten”, but, in September and October 2021, there is no “gold and silver”, online market, even in previous years popular “Double 11” also lost in December.Chen Zhongfeng used “very strange” to describe the hot scene of furniture sales in December last year. “In previous years, after the ‘Double 11’, the online business in December was basically weak, but last year, the sales volume of some businesses in December was 2 to 3 times that of November.”In China furniture association, executive chairwoman QingWeiHui bamboo-shack furniture association, jiangxi free kingdom furniture co., LTD., chairman of Gu Jiansha opinion, this phenomenon is not an accident, “the effect of the ‘double 11 now can’t compete with previous years, now the electricity of furniture sales have been normalized, especially like trill these platforms, via live electrical business style has also changed the”.Different from online stores, traditional offline stores do not feel such an “anomaly”. Every December has been their peak sales season, and then in February of the next year, the sales gap is very obvious.The front end of the supply chain to furniture factory a flourishing a weak contrast is also very bright, Nankang intelligent material preparation center (production of furniture parts) before the order has been lined up, to negotiate more customers than usual, “now basically to meet the order after the year, but the whole February will present a low order state.”Ganzhou Nankang District Chengfa furniture Industry intelligent manufacturing Co., LTD., manager of the comprehensive department said.Why the contrast?The furniture factory owner in Nankang offers two explanations.One is that dealers need to “stock up”.Gu Jianxia said, furniture factory business in December is really better, because the end of the year is approaching, logistics holiday, dealers will appropriately increase some inventory.Chen Zhongfeng has a similar view: “Dealers are worried about limited logistics in the context of the epidemic and will make a wave of purchases in December.”The second is that “consumers want to be able to move into new homes before the Lunar New Year, so they buy furniture in a big way before the lunar New Year.”Chen Zhongfeng said.Although the major furniture factories in Nankang are busy “collecting money”, for furniture enterprises, the following market conditions may be mixed.On December 8, 2021, held the scio policies of the State Council routine briefing, the introduction of “difference” promoting the modernization of agriculture and rural areas planning, put forward “to encourage conditional rural household appliances in the areas of update operations, implementing the countryside furniture home outfit subsidies and a new car to the countryside, promote the upgrading of rural residents is durable consumer goods”.Reviewing the last round of home appliances to the countryside policy, on December 22, 2007, the Ministry of Finance and the Ministry of Commerce jointly announced the expansion of China’s rural consumption “home appliances to the countryside” work.From 2009 to 2012, the subsidy for rural home appliances reached 90 billion yuan.Statistics show that in the four years since the implementation of the policy, by the end of November 2012, 293 million sets of household appliances had been sold to rural areas, achieving a sales volume of 707.1 billion yuan.And the new implementation of home appliances to the countryside policy, subsidy scope is wider, more product areas, including furniture, home decoration, cars and other fields.Dongwu Securities research newspaper analysis, the furniture to the countryside policy is expected to copy the process of home appliances to the countryside, promote the penetration of furniture products and consumption upgrade.In the medium and long term, the furniture industry has great demand growth potential, and the furniture to the countryside policy is expected to promote the penetration rate of furniture and consumption upgrade in rural areas.Shengang Securities believes that compared with small and medium-sized enterprises in the industry, leading enterprises are more likely to further improve their market share in rural areas under the policy of furniture going to the countryside by virtue of their own industrial status and channel advantages.However, how the real estate market changes in 2022, the impact on the furniture industry is difficult to judge.Haitong Securities analysis, residential demand is still the main driving force for furniture consumption growth, and custom furniture enterprises, soft furniture enterprises, kitchen furniture enterprises quarterly income growth rate, and the residential quarterly completed area growth rate has a strong correlation.According to official data from the National Bureau of Statistics, from January to November 2021, housing construction area of real estate development enterprises reached 9.59654 million square meters, up 6.3% year on year.Of which, the residential construction area was 6,795.4 million square meters, up 6.5 percent;New housing construction began on 1.828.2 million square meters, down 9.1%;New residential construction began on 1,350.17 million square meters, down 8.4%.The drop in new floor space has raised concerns about the future.”After the consumer purchases the new house, general one to two years will begin to decorate, that is to say, now buy furniture to decorate the new house is the basic before the buyer.”Chen Zhongfeng has some concerns about the furniture market after 2022.Fan Wei, general manager of Fixed income financing headquarters of Shenwan Hongyuan Securities and researcher of Tsinghua University, is optimistic about the development of home decoration industry in the future: “In the longer term, we believe that the intellectualization and greening of home decoration will bring huge space to the whole market.In the next five years, the smart home and green home industry may reach trillion levels, which is actually equivalent to the supply-side reform of the home decoration industry.The home improvement industry is more intelligent, convenient and green, which will bring new demand.”Capital is also somewhat excited about the furniture industry in 2022.On the evening of December 29, 2021, Qumei Home furnishing announced that Hillhouse capital invested 200 million yuan in a company of qumei home furnishing main chair.Since the furniture to the countryside policy after the wind, furniture industry a number of listed companies rose sharply.Editor: Yang Lin