Furniture can be divided into handmade furniture, finished furniture and custom-made furniture according to the different modes of production. In recent years, custom-made furniture has achieved rapid development by virtue of its personalised design, high space utilisation, environmental protection and other advantages, while catering to the trend of furniture consumers towards youthfulness, and the market space is expected to further expand in the future.
Comparison of the advantages and disadvantages of various types of furniture
Development of customized furniture
By comparing the development trend of operating income of domestic custom home furnishing listed companies, it is obvious that the domestic custom furniture market experienced a period of rapid development in 2016 and 2017, and the revenue growth rate of domestic custom home furnishing listed companies declined in the first half of 2018, but its average value still remained at a high level of 26.57%. so far in late 2019, home furnishing retailing has been affected by the new crown in the short term performance under pressure, the second half of the year after the epidemic just demand repair, and with the increase in income levels of residents, and the gradual emphasis on the living environment, consumers are increasingly personalized demand for furniture.
Customised furniture has become a new and rapid growth point in the furniture consumption sector in recent years by virtue of its efficient use of home space, fully reflecting consumers’ personalised consumption needs, modernity and greater environmental protection.
In recent years, customised furniture companies have continued to see high growth in revenue, significantly higher than the overall growth rate of the furniture industry, but the concentration is still relatively low. Finished furniture still accounts for the main share of China’s furniture market, in addition to the second to fifth-tier cities there are still manually made cabinets, custom furniture in the furniture market share is still a large growth space.
Development trend of custom-made furniture
◆ ◆ ◆ ◆
1 High relevance to real estate
The custom furniture industry is highly correlated with the real estate industry, but the market base of the industry is still small and there is more room for development. The downstream of the custom-made furniture industry is oriented towards domestic consumers who buy commercial housing and renovate the stock, as well as real estate enterprises who launch finely decorated commercial housing.
The real estate industry is affected by national macro-control and has a strong cyclical nature, but the impact of real estate on the furniture industry has a lag, about 12~24 months. The custom furniture industry has a higher correlation with the timing of housing delivery. Since 2018, the state has strengthened its control over the real estate market and the home furnishing industry has started to come under pressure from the slowdown of the real estate industry.
However, the proportion of renovation of stock houses has also continued to rise, especially in key first-tier cities, where the proportion of renovation of second-hand and stock household goods has accounted for more than 40%, and is on a year-on-year rise. As the custom-made furniture industry belongs to the emerging industry, it is seizing the market share of hand-made custom-made, decoration companies and finished furniture. The custom-made furniture industry currently has a small market base and a large development space.
◆ ◆ ◆
2 Intelligent is the trend
Along with the upgrading of home decoration consumption, the extensiveness of custom-made furniture has been enhanced. Customized home has been gradually developed from traditional kitchen and bedroom to whole house customization, customized products cover bedroom, study, living and dining room, children’s room.
With the development of technology, intelligent home is also gradually popular. The improvement of the living standard of the residents provides the material basis for the development of intelligent custom furniture; and the development of the Internet of Things, cloud computing and other scientific and technological developments provide the technical feasibility of intelligent custom furniture.
Custom furniture intelligence has become the focus of attention in the pursuit of high quality of life. For example, custom wardrobe set lift cabinet, can effectively solve the upper cabinet is not convenient to store, take the disadvantage of things; custom wardrobe set touch automatic door, enhance the sense of technology and user experience; intelligent dressing table, add automatic lift, hidden and intelligent lighting and other functions, not only convenient to use, and save space; custom wardrobe add automatic dehumidification, sterilization function, to prevent the storage of clothes mold; intelligent drying, ironing cabinet, can make the laundry, ironing cabinet. Ironing cabinets can make the washed clothes automatically ironed flat; intelligent drying machine, beautiful and fashionable and convenient drying, with sterilization and drying functions, etc. In the future, intelligent customised furniture products may also be integrated with other furniture products on the smart home platform, making home life more intelligent and convenient. Custom furniture intelligence has become one of the important development directions of custom furniture.
◆ ◆ ◆
3 The popularity of O2O model has increased
Market growth is slowing down, terminal traffic is decreasing, online marketing capabilities are becoming more and more important, and the popularity of O2O (online to offline) model is increasing.
Influenced by the regulation of the real estate industry, the growth of home building materials market scale has slowed down, with a compound growth rate of only 3.2% from 2013-2018. Coupled with the accelerated implementation of the refined housing policy, many home improvement companies force packaged all-inclusive whole package, the home building materials market traffic is decreasing. The popularity of the O2O (Online To Offline) model is increasing.
Customised home furnishing industry outlook
In the general environment of custom home furnishing, custom wardrobe is also facing increased competition in the industry and slower growth in customer flow. However, compared with cabinets, the market penetration rate of custom wardrobes is relatively lower and the industry growth rate can still be maintained at a high level, so companies can still enjoy certain industry dividends. If you can further establish the brand effect, expand new marketing channels, attract customers while improving the conversion rate of customer flow, increase product categories to expand business in the direction of whole-house customisation, such custom wardrobe enterprises can occupy a larger share of the increasingly competitive market.
Customized home industry barriers
◆ ◆ ◆ ◆
1 Brand awareness
Brand awareness is an important factor for consumers to measure product quality, environmental protection, reputation and after-sales service, and it is also one of the important considerations for consumers to choose goods. Consumers have a high degree of loyalty to well-known brands. Brand awareness is the result of long-term investment and accumulation in brand building, product design, product quality and marketing services, etc. It is usually difficult for new entrants to establish brand advantages in a relatively short period of time.
◆ ◆ ◆
2 Design R&D capability
As consumer demand becomes more and more personalised and differentiated, the ability to create unique and creative designs has become an important driving force and source of development for custom furniture manufacturing enterprises. Quality design needs to take into account the characteristics and requirements of product beauty, practicality, durability and environmental protection, combine with customer preferences and fashion design style, and coordinate with the overall style of customer’s living room. Therefore, innovative design and R&D capability and a perfect design and R&D system is one of the important elements of competition in the custom furniture industry and has become one of the barriers for new entrants to the industry.
◆ ◆ ◆
3 Marketing network system
Customized furniture products emphasize personalization and professional services, both of which need to rely on a wide coverage and efficient operation of the marketing service network to achieve. The establishment of a comprehensive and perfect sales network and channel management mechanism requires a large capital investment and the improvement and accumulation of experience in channel management during the long-term operation process, and it is difficult for new entrants to form an effective marketing network service system within a short period of time. The construction of sales channels is also quite difficult due to the complexity of the products and the low customer unit value of fine hardware products; the professional dealer network and the wide coverage of distribution and retail outlets are important barriers that are difficult for new entrants to break through in a short period of time.
◆ ◆ ◆
4 Information application capability
Information management system is an important means for modern enterprises to improve efficiency and strengthen management. For custom-made furniture enterprises with “order-based” production, the application of information technology is indispensable in various aspects such as design and development, order, procurement, production, sales, storage and logistics. The application of information technology is an important barrier to entering the industry and forming a large-scale development.
