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When the entire industrial chain is in a cold winter, why is the annual Shenzhen furniture exhibition soaring? When the small and medium-sized dealers lose money, why is the performance of listed companies soaring? The domestic demand market is unprecedentedly difficult. Why have the industry leaders who have been in the sea for many years have sailed back and forth? With these questions, the reporter recently interviewed industry chain listed companies, industry associations and a number of manufacturers and distributors to find out.
This year's Shenzhen International Furniture and Jewellery Show is more lively than in previous years, which is greatly out of the expectations of Qiu Decheng.
Qiu Decheng's participation status is the deputy general manager of Guangxi Kuandian Furniture Group Co., Ltd. He told the Securities Times reporter: "My biggest doubt in the past few days is that the popularity of this year's furniture fair is not optimistic. Actually, it’s so prosperous, dealers all over the country are coming, and it’s estimated that they can’t sit still.â€
Yesterday, the reporter came to the Shenzhen Convention and Exhibition Center where the exhibition was held. At 4 or 5 o'clock in the afternoon, it was close to the end of the daily exhibition. However, the front of the convention center is still busy, the ticket office is lined up, and the entrance and exhibition halls are bustling. Shenzhen Furniture Association staff told reporters: "The more the market is worse, the more participants in large-scale furniture exhibitions, the more emphasis on promotion platforms and opportunities in the market downturn."
The loss of bankruptcy has intensified. "In 2011, the sales of the entire furniture industry chain all declined. About 30% of the stores in the hypermarket lost money. This year, the loss spread to five to 60%." Qiu Decheng told reporters that this figure is the current consensus in the industry. According to statistics, in the town of Dalingshan, the first town in China's furniture export, more than 30% of furniture companies are in a state of loss, and the phenomenon of bankruptcy is still intensifying.
Mr. Zhou, who came to Shenzhen in 1992, is a dealer relying on hypermarkets. He recently made a difficult decision: to reduce the number of eight stores in Baoan to three. "Never encountered such a light off-season, engaged in the furniture industry for 20 years, lost hundreds of thousands last year, this year is even more difficult."
China is a big country in furniture production and a big consumer, but for many practitioners, the best situation no longer exists. Recalling the good time of the seller's market at the beginning of the business, Mr. Zhou couldn't conceal his enthusiasm: "At that time, the market had just risen, the sellers had fewer buyers, and the price could rise sharply during the holidays. The buyers had to keep saying good things when they picked up the goods. The freight master has a lot of tips every month." What about now? His face turned, the furniture became bigger and heavier and heavier, but now the delivery guys are moving to high-rise buildings without elevators, and there are very few tips, so the market can be seen for a while.
"Summary down, this line earns fast, the loss is also very powerful, the risk is relatively large." In Mr. Zhou's view, the background of the recent domestic demand stimulus policy is based on the downturn. He calculated the account with the reporter. A colleague who runs a furniture store in Sungang, Shenzhen, can't continue to support it. The monthly rent is 240 yuan per square meter. The selling cost of a few hundred square meters is only 60,000. The operating expenses of human and logistics expenses are about 100,000 yuan. At least 200,000 yuan can be used to protect the capital in one month. "This is already over the middle of the month, only 10,000 yuan of income. In this way, each store loses money in one month. Nearly 100,000".
In contrast, Mr. Zhou’s store in Bao’an has a low rental burden, but it is now at a loss. “On the one hand, oil prices have reached new highs, and the cost of distribution channels has been rising. On the other hand, due to inflation, the original operation The cost has risen sharply and the wages of employees are rising."
The reporter recently visited a number of large furniture stores, although in the "3·15" promotion area, but most of these shops are deserted, only the boring staff in the big store are chatting online, some shops even black light during business hours, only at the door Post a huge discount notice.
“Now the counter salesperson sees the customer as if he is hungry.†Miss Xu, the store manager of Fuyong’s furniture store, described the operation of the industry. She told reporters that the trend of the furniture industry and real estate "one glory, one loss and one loss", real estate in 2009 out of the long-term, the furniture industry upstream and downstream hot expansion, the real estate regulation in the past two years, the furniture market has shrunk significantly, previously large Businesses of scale expansion have tasted the pain.
“Low-price subletting, Wangpu subletting... subletting everywhere, indicating a general downturn,†Mr. Zhou’s colleague, Li Mingzhen, who has been operating a four-year furniture store in Longgang, Shenzhen, signed the transfer agreement last week. “Rent , manpower, logistics are increasing prices, but the turnover has flown down to three thousand feet." Li Mingzhen stressed: "Sublease is not the worst situation, many people run directly, even the store is not." In this Shenzhen At the International Home Jewelry Show, exhibitors generally reflected that the market was "poor" in the past two years. Although the year is in spring, their industry is still in the winter, and even can't guarantee whether it will come to the peak season in the second half of the year. . Due to the decline in the domestic market, many companies have indicated that they have reduced production capacity.
The difference between export and domestic sales is that the export orders usually require each piece to be profitable, but the market cultivation period for domestic sales is based on investment.†Yan Shaoling, general manager of Shenzhen Mubao Furniture Co., Ltd. Reporter, the company has been in business for more than ten years. In the past three years, it has been exporting timber and furniture for export and promoting its own brand. Although it is influenced by real estate policy during the brand cultivation stage, it is still optimistic about the future development space. “This industry has indeed encountered difficulties. But it won't fall out."
Furniture is a typical export-oriented industry. With the global economic downturn and the cost advantage of China's manufacturing industry gradually weakening, furniture exports have been hit hard. Zhu Qingyu, a light industry researcher at China Investment Consulting Co., said: "In 2011, due to the slowdown in the global economic development, the overseas market has insufficient consumer demand and the foreign trade situation has deteriorated. This has led many export-oriented furniture companies to switch their sales to domestic sales. It is the business direction chosen according to the changing economic situation and is the way for enterprises to seek new development."
In addition, the combination of domestic and foreign sales has also become the development path of many industry leaders. Yihua Wood (600978) Dong Wei Liu Weihong told reporters: "Yihua Wood has expanded its domestic market in recent years. At present, the company sells domestically and export-oriented two-wheel drive. It is expected to achieve a steady increase in export sales. The domestic sales space is huge and the overall scale. The current domestic market is directly operated by distributors and distributors. The direct market is mainly for first-tier and provincial capital cities, and the dealer channels are mainly for second- and third-tier cities.†Liu Weihong revealed that the current gross profit margin of direct-operated stores is higher than that of the export market. The gross profit margin of the dealer channel is equivalent to the export. Yan Shaoling also revealed that compared with export OEMs, the gross profit margin of self-owned brands is higher.
Many industry insiders interviewed by the reporters said that the transformation of furniture export processing enterprises into domestic and foreign sales and production integration enterprises has become the trend of the times, many of which have already tasted the sweetness of domestic sales.
Why have industry leaders previously focused on the export market? Zheng Wei, an analyst at Dongfang Securities, which has long tracked the furniture industry, told reporters: “Compared with domestic sales, it is easier to make money in the past. When the market is good, it is easy to sell products through the exhibition. The export mainly uses OEM and OEM. The way, you don't need to take a lot of real money to build your brand and channel."
Liu Weihong said: "The company's increase in domestic sales is mainly based on the consideration of production layout. Previously, the production capacity was limited. In recent years, the capital market has raised funds to expand production capacity, so the company can now deploy the domestic market." He stressed that exports to domestic sales for the company It is also a challenge. In the past, when you focused on exporting, you didn't need to touch the consumer with zero distance, but the transformation of domestic sales needs to re-establish the brand and channel. Qiu Decheng analyzed that some of the listed peers have transformed themselves from export to domestic market, and have greatly improved their performance through the construction of large-scale experience halls and direct-operated stores. The biggest advantage of this approach is that the channels are firmly grasped, but the risks are pre-existing. The investment is large and requires a lot of financial support.
The furniture market shuffles and accelerates. “The Chinese furniture was popular in the past few years. Everyone has embraced it. Last year, Walnut and Wujinmu began to sell well. This year’s exhibition is all about follow-up products.†Qiu Decheng told reporters that the industry lacks long-term planning and blind follow-up. The phenomenon is widespread. "The competition in the low-end market is becoming more and more fierce, the homogenization of products is serious, and even the price war is started. The reshuffle trend of the survival of the fittest is very obvious."
Liu Weihong told reporters that the EU's new regulations are expected to accelerate the industry's reshuffle. At present, Yihua Wood has less furniture exports to the EU and has not been affected. With the increase of barriers to entry, weaker manufacturers will withdraw from the market. Recently, the EU has enacted new regulations requiring all manufacturers on the timber production and processing chain to submit basic information on the legality of timber sources, such as timber source, country and forest, wood volume and weight, and the name and address of the log supplier. Wood products will be severely punished.
Zhu Qingxuan believes: "For large furniture companies, the new EU regulations have raised the price of related products to a certain extent, and the price is expected to increase by 15% compared with that before the certification. For SMEs, the new regulations have a greater negative impact. On the one hand, SMEs have long been relying on low prices and low cost to enter the European and American furniture market. Identity certification has increased their cost pressure, or it is difficult to establish a foothold in the EU market."
According to Zhu Qingyu's analysis, in the long run, the new regulations will benefit the long-term development of China's furniture industry, and at the same time effectively regulate the market, further eliminate backward small and medium-sized enterprises, and improve the quality and grade of Chinese furniture export products. For listed companies, their brands and financing The ability has certain advantages, so it is not affected much. "At the same time, with the export of predators returning to the domestic market and exerting brand building and channel expansion, it is expected that the furniture industry will have a reshuffle in the next few years."
Judging from the public data, compared with the dismal operation of many dealers and manufacturers, the listed company's 2011 transcripts are bright. Meike (600337) expects net profit for 2011 to increase by more than 100% compared with 2010, mainly because “the domestic retail business of Meikemeijia, a wholly-owned subsidiary of the company, increased in 2011 compared with the same period of last yearâ€. Customized wardrobe faucet Sofia (002572) In 2011, its total operating income was 1.004 billion yuan, an increase of 45.67% over the previous year, and a net profit of 134 million yuan, an increase of 44.45% over the same period of the previous year.
The reporter learned that China's furniture industry is big and small, and China's manufacturing has a price advantage. However, compared with European and American high-end furniture, Chinese brands with high added value are still rare. In the prospectus, Sophia said that China's furniture industry is dominated by small and medium-sized enterprises. Most furniture companies have a relatively short set-up time. There are not many well-known furniture brands with independent intellectual property rights. The design and development capabilities of furniture enterprises are not strong, and the furniture designers in the whole industry are lacking. The product imitation problem still exists.
Mr. Zhou, who has been involved in the furniture industry for 20 years, told reporters that the best business he has done since he started his career is the first 10 years. At that time, the industry was just emerging. “The first soup is the most fragrant.†In recent years, the industry has become increasingly competitive. Many strong manufacturers began to do direct sales, but also brought great pressure to dealers and agents.
“Not necessarily only the mid-to-high end products are popular, the key is to find the market positioning.†Qiu Decheng told reporters that his company currently covers high-end and low-end product lines, and high-end mahogany products are still in the market development stage. The mid-end products that are cost-effective and fit the Chinese style, "The orders in these days are good, better than expected."
The furniture industry is worried about the export of predators
Since the outbreak of the financial crisis in 2008, the furniture export market has continued to slump. The EU recently officially passed the “Wood and Wood Products Regulations and New Environmental Design Directives†to further improve the export of wood products to China, which has made the originally stormy export market worse. At the same time, the domestic demand market has been increasingly ruined by real estate regulation since 2011. Under the difficulties of internal and external affairs, this year Beijing and other places have successively introduced “old-for-new†for furniture consumption, trying to promote the industry's recovery through stimulus policies.