In January 2021, the COVID-19 pandemic broke out in some provinces and cities in China, which indicates that China's economy will continue to advance in difficulties this year.
But in any case, compared with the past 2020, China’s furniture industry in 2021 will not have the huge ups and downs of last year, and there will be no more economic shock-like blows caused by the COVID-19 pandemic. We expect that the new year will A little bit smoother than the previous year.
In 2021, Chinese furniture companies will still face more conventional difficulties and challenges.
Challenge 1: Market pressure due to the continued decline in China’s labor
In 1962, the Chinese-born population exceeded the 20 million mark for the first time after the founding of the People's Republic of China, reaching 20.075 million. In 1963, there were about 27 million people born in China. From then on until 1976, the number of births in China remained at more than 20 million per year.
The 15-year population boom has provided young, large and cheap labor for China's reform and opening up in the 1980s, and has achieved the original accumulation of Chinese capital.
By 2017, China's infant birth rate began to be surpassed by the employee retirement rate. In 2022, the retirement wave will have a shocking impact on Chinese society.
Moreover, the huge reduction in China's labor force will continue for more than ten years.
Under such a large population situation, if Chinese furniture companies raise any exaggerated slogans, it will obviously no longer work.
In recent years, many Chinese furniture companies have encountered major problems in their mergers and acquisitions, which have a major bearing on the nature of the market not supporting rapid expansion.
As a leader and observer of the Chinese furniture industry, Interi Furniture hereby advises Chinese furniture companies, especially small and medium-sized furniture companies: to mention less radical propaganda slogans, and do more scientific market planning and accurate data forecasts.
Challenge 2: The development model of China's whole-house custom furniture conceals the contraction of the furniture industry market
In the past, when selling furniture in China, finished furniture was the best seller. Now when you sell furniture, you need to design and customize the whole house. Is this a good phenomenon or a bad phenomenon?
In Interi Furniture's view, no matter good or bad, it has brought a huge impact to China's furniture market.
For many furniture companies, custom-made furniture for the whole house is a bit difficult to grasp. Even if they reluctantly accept orders, they are prone to many follow-up problems, which makes the goodwill of the furniture companies extremely vulnerable.
The popularity of whole-house custom furniture in China actually conceals the nature of the decline in the Chinese furniture market.
As mentioned above, due to the decline in the Chinese labor force and the increase in the retired population, the demand for furniture in the Chinese market has dropped significantly. In terms of statistical data, the increase in unit price may have masked the decrease in the number of pieces. If you only count furniture sales, it is difficult to find red flags that the number of furniture pieces has fallen.
After the COVID-19 epidemic in 2020, many Chinese traditional furniture companies lost their competitiveness and were forced to withdraw from the market. However, due to the prevalence of whole-house custom furniture and the high unit price of custom furniture customers, it has attracted a large number of companies in related industries and design companies to transform into the furniture industry. Therefore, data shows that the number of companies in the furniture industry has not decreased but increased.
Interi Furniture hereby presents our second piece of advice: full house custom furniture industry may not be a gold mine. If you want to successfully mine the gold in the custom furniture industry, you must have strong technical strength, a complete service chain, and superb design standards. If a Chinese furniture company does not want to turn a gold mine into a golden trap, then he must work hard and great energy for it.
Challenge 3: Continued penetration of China's digital economy
China's digital economy currently penetrates almost everywhere in the real economy, reshaping the inherent form of the traditional economy.
In the past 2020, Chinese furniture companies have almost completely embraced the digital economy, and their attitude towards the digital economy has also begun to change from resistance to cooperation.
But in the view of INTERI FURNITURE, a change of attitude is not enough.
Chinese furniture companies must make better use of the new competitiveness brought by the digital economy to lay the foundation for the development of their own companies.
According to reports, whether in the up-and-coming Nankang Furniture Industry Belt in Jiangxi Province, in the Sichuan Furniture Industry Belt, or even in the Central Plains, more and more furniture companies relying on digital technology to strengthen their market competitiveness have emerged.
Digital technology continues to make great progress in furniture production, sales, management, and even warehousing, logistics, and installation links.
Chinese furniture companies, which have always been considered low-tech, are actually full of technology. Those enterprises that mistakenly believe that furniture production and sales are traditional industries and do not need to use high-tech, eventually followed the gloomy development prospects.
The failure of many Chinese furniture companies is actually caused by the vastly backward technology investment.
Therefore, INTERI FURNITURE hereby gives our third piece of advice: Chinese furniture companies must invest in new technologies at all costs, especially digital technologies, and pay attention to them. New business opportunities exist in technological transformation, especially in the application of new digital technologies.
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