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Furniture Market China (Part III)FurnitureMarket China(PartIII)
April2012
ExecutiveSummary
Market Chinasfurnitureindustryhasexhibitedarapidgrowthanddevelopmentoverthepast20years FurnitureindustryisestimatedtobeworthUSD343bnby2015,growingataCAGRof22.8%during200915 Productionvolumehasgrownby8.1%CAGRbetween2010and2011Drivers: Challenges:
Drivers&Ch ll
HealthyEconomyandRisingIncome
RealEstateBoom
AcceleratingUrbanizationandChangingLifestyle
FurnitureExpositions
HugeImporterofRawMaterials
StringentHousingMeasures
IntenseCompetitionandRisingOperatingCosts
CredibilityCrisisChallenges StrongDistributionNetwork
ChangingDemographics
RiseinTourism
Government GovernmentStandards
Trends
RiseinLuxuryFurnitureDemand EmergenceofNewerVarietiesofFurniture Furniture Malls
Initiatives OldforNewFurnitureSubsidyProgramin2012
Competition
Trends FurnitureMalls IncreasingPresenceofForeignRetailers OnlinePortalsDedicatedtoFurnitureProducts
MajorPlayers
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CompetitionQuanyou Qumei RedApple Huari IKEA Royale
Introduction
MarketOverview Global
China
ExportImport
Drivers&Challenges
GovernmentInitiatives
Trends
Mergers&Acquisitions
Competition
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KeyTakeaways
Trends Summary
RiseinLuxuryFurnitureDemand
E f NO li P t l D di t d t EmergenceofNewerVarietiesofFurniture
OnlinePortalsDedicatedtoFurnitureProducts
Key
Trends
IncreasingPresenceofForeignRetailers
FurnitureMalls
4FURNITUREMARKETINCHINA2012.PPT
Marketiswitnessingariseindemandforluxuryandhighendfurniture
RiseinLuxuryFurnitureDemand
Highendfurniture brands
RisingincomeandwealthofChineseconsumersiscreatinganincreaseindemandforluxuryfurnitureinChina
furniturebrandsareenteringtotapthedemand
LuxurymarketinChinaincludingluxuryfurniturehasbeengrowingatarateofatleast30%annuallyoverthelastdecade
Luxuryfurnishingitemsareusuallyconsideredasasymbolofwealthandstatus HighendItalianfurniturearequitepopularamongtheaffluentChinesepopulace
Withtheintentiontotapthismarket,highendfurniturebrandsareopeningretailchains Aninternationalfurniturecenter,GOHO,whichhouses374globalluxurybrands,openedinEasyHome,atophomeandfurniturechaininBeijinginApr2010
ReputedluxurybrandssuchasGucci,LVandChanelhavealsoidentifiedthegrowingopportunityofferedbythe Chinese furniture markettheChinesefurnituremarket
HighendImportedFurniture KeyConsumerMarkets
Tier II Cities
TierICitiesBeijingandShanghai
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TierIICitiesShenzhen,WenzhouandHangzhouetc.
Playersareintroducingdiverserangeoffurniturecateringtothedemands
EmergenceofNewerVarietiesofFurniture(1/2)
Playersareoffering various
Thefurnituremarketisgrowingandiswitnessingdemandforadiversifiedrangeoffurniturestyles
offeringvariouskindsoffurniture
Playersinthemarketarebecomingcustomerresponsiveandareaccordinglyintroducingnewerdesigns
GreenFurniture
Inordertoaddressthegrowingawarenessamong
Readytoassemble(RTA)andDoityourself(DIY)furniture
Withincreasingnumberofpeopleworkingfromhome,
peopleabouttheenvironmentissues,Chinesefurniture
manufacturesareintroducingdiversifiedproducts
includingtheusageoffabricsthatdonotgeneratetoxic
fumesintheproductionprocess,suchaspolypropylene
demandforthistypeoffurnitureisgrowingespecially
inNorthAmericaandEuropeancountries
TheexportorientedunitsexistingintheChinese
furnitureindustryareshiftingfocustothiscategory
Alsotocurbtheconsumptionofwood,some
alternativematerialsarebeingadopted
Somemanufacturersarealsomakingfurniturefrom
recycledproducts,suchasreclaimedwoodandoldteak
from wood buildings
Leatherandheavierdurablefabricispreferredinthis
categoryoffurniture
6FURNITUREMARKETINCHINA2012.PPT
fromwoodbuildings
ofawidevarietyofcustomerswithspecificpreferences
EmergenceofNewerVarietiesofFurniture(2/2)Whilefurnituremakersareconsideringenvironmentfriendlydesignedfurniture,theyarealsooptimisticaboutcateringtothedemandsofconsumersforcompactandmultifunctionalityf itfurniture
Risingurbanpopulationandhigherlivingstandardsareleadingtoanincreaseddemandfornewvarietiesoffurniture
Multifunctionality
Chinesefurnituremarketiswitnessinghigherdemand
SimplicityandNeutralColors
Intermsofdesignsandcolors,simpledesignswillbe
formoreflexible,functionalandsmallerfurniture
Withincreasingpopulationandshortageofspace,the
marketforfurniturethatcanoptimallyusethespace
availableisgrowing.
morepreferredbyconsumers
Neutralcolors,includingearthtones,cream,blackand
whitetoorange(softenedtocoral,peachandcopper)
andredareamongstthefavoritecolorsofconsumers
Furnituresuchasraisedbedwithaboxbelowfor
storagepurposesorafoldingchairhungonawallcan
helpprovidestoragesolutionandfreespaceonthe
floor
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FurnituremallsareincreasinglygainingpopularityfosteringthegrowthoffurnituresalesinChina
FurnitureMalls
Increasedsalesfrom onestop
Intherecentyears,largescalefurnituremallshavegainedimmensepopularityinChina
Someofthemajorfurnituremallplayersinclude,RedStarMacalline,Easyhome,HOBA,Beijing fromone stopfurniture
shoppingmalls
j p y , , y , , j g
JimeiFurnishingandAydHomeFurnishings
Furnituremallserveasaonestopshoppingplatformforawidevarietyofcustomersranging
fromhomedecoration,interiordesign,homeproductssalestoconstructionmaterialssales
FurnitureMallOperators No.ofFurnitureRetailOutlets Description
RedStarMacalline 66
ItisoneoftheleadingfurnituremalloperatorsinChina
Ithadplansofsettinguptwotothreestoreseveryearand200chainp g p y
storesthroughoutChinaby2020
Easyhome 37
Easyhomecaterstotheneedsofconsumersseekingforhighend
importedfurniture
Easyhome furniture malls include brands, such as Joop, Simmons, RocheEasyhomefurnituremallsincludebrands,suchasJoop,Simmons,Roche
Bobois,ChateauxdAx,Bindiyaandmore
HOBA 20
IthasstorelocationsinShenzhen,Zhuhai,Shanghai,ChangshaCity,
Fuzhou,Chengducity,Zhongshan,andZhejiang
Its brand portfolio includes HOBA Home Furnishing and METEN Living
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ItsbrandportfolioincludesHOBAHomeFurnishingandMETENLiving
Design
Expansionofretailoutletsbyforeignretailerstocapitalizeonthegrowingopportunityinthedomesticfurnituresector
IncreasingPresenceofForeignRetailers
High Influx of
ForeignretailersareseekingtointroducetheirbrandedproductsinChinaowingtotheincreasingpurchasingpowerofChinesepopulation
HighInfluxofForeignBrands
RapidExpansionPlans
IKEAGroup,homefurnishinggiantbasedinSweden,haveplansofsettingup17stores
inChinaby2015
InApr2011,USbasedAshleyFurnitureInds.revealeditsplansofbuildingAshley
FurniturestoresinChina,whichwillbesellingtheproductsdevelopedinthethree
largeAshleyownedproductionfacilitiesinChinaandVietnam
M H F i hi b d i N th C li l t l h 100 tMagnussenHomeFurnishings,basedinNorthCarolina,planstolaunch100newstores
inChinaduring201113,targetingmediumtohighearningChineseconsumers
InSep2011,SpanishbrandZARAHOMEhadopeneditssecondstoreinBeijingat
Solana Lifestyle Shopping Park and plans to continue with its expansion spree in Beijing
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SolanaLifestyleShoppingParkandplanstocontinuewithitsexpansionspreeinBeijing
Playersofferproductsviaonlineportalsasonlinesaleschannelattainhighpopularityamongbuyers
OnlinePortalsDedicatedtoFurnitureProducts
Increasing ChinasleadingB2ConlineshoppingplatformTaobaomallrunsacompletelydedicatedonlineportal(jia.tmall.com) forhomefurnishingproducts
popularityofonlineportals
Tmalldisplayfurnitureproducts,suchasbed,sofa,mattress,tablesandchairs,cabinet,frameclassandmanyothertypes,whicharemadebyvariousfurnituremanufacturers
Furniturecompanies,suchasQumeiandX.M.B.havetheirownflagshipstoreinTmall,offeringexclusiveproductlineforonlinesales
Consumerscanbrowsethroughalltheavailablehomefurnishingitemsandpurchasetheproductwhichisbestsuitedtotheirrequirement
In May 2011 Taobao opened a furnishing showroomShareofTransactionsinTaobao.com(12th Dec2011)
InMay2011,TaobaoopenedafurnishingshowroominBeijinginordertoallowthecustomerstoexaminetheproductsbeforeplacingordersonline
TheBeijingmallcoversafloorareaof25,000sqmtanddisplays22,000itemsfromabout300suppliers
0 100 200 300 400 500 600 700
Others
Digitalproducts
Homefurnishings
Womensapparel
p y , pp
On12th Dec2011,Taobaohadachievedthehighesttransactioneverforasingledayonitswebsite
Homefurnishingwasthesecondhighestcontributingcategorywithsalesof~USD78.5mn,representing11.6%
USDmn
67554.0%11.2%
11.6%23.3%
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Note:B2CreferstoBusinesstoConsumerandsqmtreferstosquaremeters
g y f , p gofthetotalsalesgenerated
Introduction
MarketOverview Global
China
ExportImport
Drivers&Challenges
GovernmentInitiatives
Trends
Mergers&Acquisitions
Competition
11FURNITUREMARKETINCHINA2012.PPT
KeyTakeaways
Mergers&Acquisitions(M&A)
AnnouncedDate
ClosedDate Target Buyer/Investors SellersSize
(USDmn)
Nov232010 Nov232010MarkorInternationalFurnitureCo.,Ltd.
MarkorInvestmentGroup Co Ltd
174.45(SHSE:600337)
GroupCo,Ltd.
Sep172010 Sep302010LangFangTianFengHomeCo.,Ltd.
FAVAInternationalHoldingsLimited(SEHK:8108)
0.83
Sep152010 Sep152010RoyaleFurnitureHoldingsLimited(SEHK:1198)
AjiaPartnersAssetManagement(HK)Limited
0.59
Beijing Yu Fa Jia Ju CoRoyaleFurniture
Jan42010 Feb102010BeijingYuFaJiaJuCo.,Ltd.
yHoldingsLimited(SEHK:1198)
10.64
Dec172009 Nov162010MarkorHomeFurnishings Co Ltd
MarkorInternationalFurnitureCo.,Ltd.
MarkorInvestmentGroup Co Ltd
64.94FurnishingsCo.Ltd.
(SHSE:600337)GroupCo,Ltd.
12FURNITUREMARKETINCHINA2012.PPT
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