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Furniture Market China (Part III) FurnitureMarket China(PartIII)
April2012
ExecutiveSummary
Market
Chinasfurnitureindustryhasexhibitedarapidgrowthanddevelopmentoverthepast20years
FurnitureindustryisestimatedtobeworthUSD343bnby2015,growingataCAGRof22.8%during200915
Productionvolumehasgrownby8.1%CAGRbetween2010and2011
Drivers: Challenges:
Drivers&
Ch ll
HealthyEconomyandRisingIncome
RealEstateBoom
AcceleratingUrbanizationandChangingLifestyle
FurnitureExpositions
HugeImporterofRawMaterials
StringentHousingMeasures
IntenseCompetitionandRisingOperatingCosts
CredibilityCrisis
Challenges StrongDistributionNetwork
ChangingDemographics
RiseinTourism
Government GovernmentStandards
Trends
RiseinLuxuryFurnitureDemand
EmergenceofNewerVarietiesofFurniture
Furniture Malls
Initiatives
OldforNewFurnitureSubsidyProgramin2012
Competition
Trends
FurnitureMalls
IncreasingPresenceofForeignRetailers
OnlinePortalsDedicatedtoFurnitureProducts
MajorPlayers
2 FURNITUREMARKETINCHINA2012.PPT
Competition
Quanyou Qumei RedApple Huari IKEA Royale
Introduction
MarketOverview
Global
China
ExportImport
Drivers&Challenges
GovernmentInitiatives
Trends
Mergers&Acquisitions
Competition
3 FURNITUREMARKETINCHINA2012.PPT
KeyTakeaways
Trends Summary
RiseinLuxuryFurnitureDemand
E f N O li P t l D di t d t EmergenceofNewer
VarietiesofFurniture
OnlinePortalsDedicatedto
FurnitureProducts
Key
Trends
IncreasingPresenceofForeign
Retailers
FurnitureMalls
4 FURNITUREMARKETINCHINA2012.PPT
Marketiswitnessingariseindemandforluxuryandhighend
furniture
RiseinLuxuryFurnitureDemand
Highend
furniture brands
RisingincomeandwealthofChineseconsumersiscreatinganincreaseindemandforluxury
furnitureinChina
furniturebrands
areenteringto
tapthedemand
LuxurymarketinChinaincludingluxuryfurniturehasbeengrowingatarateofatleast30%annuallyoverthe
lastdecade
Luxuryfurnishingitemsareusuallyconsideredasasymbolofwealthandstatus
HighendItalianfurniturearequitepopularamongtheaffluentChinesepopulace
Withtheintentiontotapthismarket,highendfurniturebrandsareopeningretailchains
Aninternationalfurniturecenter,GOHO,whichhouses374globalluxurybrands,openedinEasyHome,atop
homeandfurniturechaininBeijinginApr2010
ReputedluxurybrandssuchasGucci,LVandChanelhavealsoidentifiedthegrowingopportunityofferedby
the Chinese furniture market theChinesefurnituremarket
HighendImportedFurniture KeyConsumerMarkets
Tier II Cities
TierICities
BeijingandShanghai
5 FURNITUREMARKETINCHINA2012.PPT
TierIICities
Shenzhen,WenzhouandHangzhouetc.
Playersareintroducingdiverserangeoffurniturecateringtothe
demands
EmergenceofNewerVarietiesofFurniture(1/2)
Playersare
offering various
Thefurnituremarketisgrowingandiswitnessingdemandforadiversifiedrangeoffurniture
styles
offeringvarious
kindsof
furniture
Playersinthemarketarebecomingcustomerresponsiveandareaccordinglyintroducingnewer
designs
GreenFurniture
Inordertoaddressthegrowingawarenessamong
Readytoassemble(RTA)and
Doityourself(DIY)furniture
Withincreasingnumberofpeopleworkingfromhome,
peopleabouttheenvironmentissues,Chinesefurniture
manufacturesareintroducingdiversifiedproducts
includingtheusageoffabricsthatdonotgeneratetoxic
fumesintheproductionprocess,suchaspolypropylene
demandforthistypeoffurnitureisgrowingespecially
inNorthAmericaandEuropeancountries
TheexportorientedunitsexistingintheChinese
furnitureindustryareshiftingfocustothiscategory
Alsotocurbtheconsumptionofwood,some
alternativematerialsarebeingadopted
Somemanufacturersarealsomakingfurniturefrom
recycledproducts,suchasreclaimedwoodandoldteak
from wood buildings
Leatherandheavierdurablefabricispreferredinthis
categoryoffurniture
6 FURNITUREMARKETINCHINA2012.PPT
fromwoodbuildings
ofawidevarietyofcustomerswithspecificpreferences
EmergenceofNewerVarietiesofFurniture(2/2)
Whilefurnituremakersareconsideringenvironmentfriendlydesignedfurniture,theyarealso
optimisticaboutcateringtothedemandsofconsumersforcompactandmultifunctionality
f it furniture
Risingurbanpopulationandhigherlivingstandardsareleadingtoanincreaseddemandfornew
varietiesoffurniture
Multifunctionality
Chinesefurnituremarketiswitnessinghigherdemand
SimplicityandNeutralColors
Intermsofdesignsandcolors,simpledesignswillbe
formoreflexible,functionalandsmallerfurniture
Withincreasingpopulationandshortageofspace,the
marketforfurniturethatcanoptimallyusethespace
availableisgrowing.
morepreferredbyconsumers
Neutralcolors,includingearthtones,cream,blackand
whitetoorange(softenedtocoral,peachandcopper)
andredareamongstthefavoritecolorsofconsumers
Furnituresuchasraisedbedwithaboxbelowfor
storagepurposesorafoldingchairhungonawallcan
helpprovidestoragesolutionandfreespaceonthe
floor
7 FURNITUREMARKETINCHINA2012.PPT
Furnituremallsareincreasinglygainingpopularityfosteringthe
growthoffurnituresalesinChina
FurnitureMalls
Increasedsales
from onestop
Intherecentyears,largescalefurnituremallshavegainedimmensepopularityinChina
Someofthemajorfurnituremallplayersinclude,RedStarMacalline,Easyhome,HOBA,Beijing
fromone stop
furniture
shoppingmalls
j p y , , y , , j g
JimeiFurnishingandAydHomeFurnishings
Furnituremallserveasaonestopshoppingplatformforawidevarietyofcustomersranging
fromhomedecoration,interiordesign,homeproductssalestoconstructionmaterialssales
FurnitureMallOperators
No.ofFurniture
RetailOutlets
Description
RedStarMacalline 66
ItisoneoftheleadingfurnituremalloperatorsinChina
Ithadplansofsettinguptwotothreestoreseveryearand200chain p g p y
storesthroughoutChinaby2020
Easyhome 37
Easyhomecaterstotheneedsofconsumersseekingforhighend
importedfurniture
Easyhome furniture malls include brands, such as Joop, Simmons, Roche Easyhomefurnituremallsincludebrands,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
8 FURNITUREMARKETINCHINA2012.PPT
ItsbrandportfolioincludesHOBAHomeFurnishingandMETENLiving
Design
Expansionofretailoutletsbyforeignretailerstocapitalizeonthe
growingopportunityinthedomesticfurnituresector
IncreasingPresenceofForeignRetailers
High Influx of
ForeignretailersareseekingtointroducetheirbrandedproductsinChinaowingtothe
increasingpurchasingpowerofChinesepopulation
HighInfluxof
ForeignBrands
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 t MagnussenHomeFurnishings,basedinNorthCarolina,planstolaunch100newstores
inChinaduring201113,targetingmediumtohighearningChineseconsumers
InSep2011,SpanishbrandZARAHOMEhadopeneditssecondstoreinBeijingat
Solana Lifestyle Shopping Park and plans to continue with its expansion spree in Beijing
9 FURNITUREMARKETINCHINA2012.PPT
SolanaLifestyleShoppingParkandplanstocontinuewithitsexpansionspreeinBeijing
Playersofferproductsviaonlineportalsasonlinesaleschannel
attainhighpopularityamongbuyers
OnlinePortalsDedicatedtoFurnitureProducts
Increasing
ChinasleadingB2ConlineshoppingplatformTaobaomallrunsacompletelydedicatedonline
portal(jia.tmall.com) forhomefurnishingproducts
popularityof
onlineportals
Tmalldisplayfurnitureproducts,suchasbed,sofa,mattress,tablesandchairs,cabinet,frame
classandmanyothertypes,whicharemadebyvariousfurnituremanufacturers
Furniturecompanies,suchasQumeiandX.M.B.havetheirownflagshipstoreinTmall,offering
exclusiveproductlineforonlinesales
Consumerscanbrowsethroughalltheavailablehomefurnishingitemsandpurchasethe
productwhichisbestsuitedtotheirrequirement
In May 2011 Taobao opened a furnishing showroom
ShareofTransactionsinTaobao.com(12
th
Dec2011)
InMay2011,Taobaoopenedafurnishingshowroom
inBeijinginordertoallowthecustomerstoexamine
theproductsbeforeplacingordersonline
TheBeijingmallcoversafloorareaof25,000sqmtand
displays22,000itemsfromabout300suppliers
0 100 200 300 400 500 600 700
Others
Digitalproducts
Homefurnishings
Womensapparel
p y , pp
On12
th
Dec2011,Taobaohadachievedthehighest
transactioneverforasingledayonitswebsite
Homefurnishingwasthesecondhighestcontributing
categorywithsalesof~USD78.5mn,representing11.6%
USDmn
675 54.0%
11.2%
11.6%
23.3%
10 FURNITUREMARKETINCHINA2012.PPT
Note:B2CreferstoBusinesstoConsumerandsqmtreferstosquaremeters
g y f , p g
ofthetotalsalesgenerated
Introduction
MarketOverview
Global
China
ExportImport
Drivers&Challenges
GovernmentInitiatives
Trends
Mergers&Acquisitions
Competition
11 FURNITUREMARKETINCHINA2012.PPT
KeyTakeaways
Mergers&Acquisitions(M&A)
Announced
Date
ClosedDate Target Buyer/Investors Sellers
Size
(USDmn)
Nov232010 Nov232010
MarkorInternational
FurnitureCo.,Ltd.
MarkorInvestment
Group Co Ltd
174.45
(SHSE:600337)
GroupCo,Ltd.
Sep172010 Sep302010
LangFangTianFeng
HomeCo.,Ltd.

FAVAInternational
HoldingsLimited
(SEHK:8108)
0.83
Sep152010 Sep152010
RoyaleFurniture
HoldingsLimited
(SEHK:1198)
AjiaPartnersAsset
Management(HK)
Limited
0.59
Beijing Yu Fa Jia Ju Co
RoyaleFurniture
Jan42010 Feb102010
BeijingYuFaJiaJuCo.,
Ltd.
y
HoldingsLimited
(SEHK:1198)
10.64
Dec172009 Nov162010
MarkorHome
Furnishings Co Ltd
MarkorInternational
FurnitureCo.,Ltd.
MarkorInvestment
Group Co Ltd
64.94
FurnishingsCo.Ltd.
(SHSE:600337)
GroupCo,Ltd.
12 FURNITUREMARKETINCHINA2012.PPT
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