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Recently, a well-known furniture store in a prefecture-level city caused rents to be increased in disguise, causing merchants to turn off their lights to protest.

Furniture dealers cannot afford rising rents, and furniture stores need to increase profits. The contradiction between the two seems irreconcilable.

The root of the problem lies in the fact that furniture dealers have not enjoyed the dividends of economic growth.

From the perspective of macroeconomic data, my country’s economic development is good. This year, both domestic and foreign furniture sales have experienced good growth. However, when it comes to specific furniture companies, there is an uneven phenomenon of misery and happiness.

Some companies are developing rapidly, while others are difficult to operate.

This article discusses where all the interesting increments in the furniture industry come from?

1

High-end custom

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From the Guangdong Furniture Fair this spring, we found that traditional finished furniture companies have been involved in high-end customization on a large scale. Obviously, they put their hopes for future growth in this direction.

Some companies have previously piloted high-end customization in individual specialty stores, and the results have been remarkable.

Some companies engaged in design, after transforming into high-end furniture customization, have repeatedly won large orders of tens of millions.

High-end customization is a trending market phenomenon.

The market incentive for the formation of high-end customization is: it can promote the sales of finished furniture; it can give finished furniture companies a respite from the market, and lay the foundation for a thorough transformation of high-end customization in the future.

Simply put: high-end customization can at least keep the output value of the company from falling too fast.

In the future, high-end customization is a market direction, and whether it can be grasped depends on the company's organizational reengineering capabilities.

2

Bulk business orders

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Analyzing the annual reports of furniture companies in 2020, we have reached an important conclusion: Most of the growth comes from bulk business.

If the bulk of the business grows poorly, the company is likely to stagnate or even decline.

Take customized furniture as an example. Among the top three companies, the operating income of Opai Home Furnishing and Sofia increased by 8.91% and 8.67% respectively over the previous year, while the operating income of Shangpin Home Delivery decreased by 10.29% over the previous year.

Opal Home Furnishing’s bulk business grew by 24.05%, which is the fastest-growing business category; Sophia’s bulk business channel revenue accounted for 18.08%, because wardrobes are not a necessary option for the delivery standard of hardcover houses, and the growth rate of bulk business is not obvious. However, the new business Simi Cabinet achieved revenue of 1.211 billion yuan, a year-on-year increase of 42.26%, which drove the increase in overall performance.

The shortcomings of the bulk business have made Shangpin's home delivery loss larger. Not only did operating income drop by 10.29%, but net profit dropped by 80.81%.

Observations found that for smaller customized companies, the large business orders in 2020 will have a decisive impact on the improvement of operating conditions.

3

Internet sales

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A furniture company in Nan Kangyi, Jiangxi, sells through traditional channels, with an annual income of 10 million yuan. After joining Pinduoduo’s promotional activities, the daily sales are 1 million yuan and the monthly sales are 20 million yuan. In 2020, which is affected by the epidemic, sales will exceed 2 100 million yuan.

Henan Zhiou Furniture Co., when the epidemic in 2020 severely affects the world, its net profit reached 380 million yuan, 9.5 times that of 40 million yuan in 2018. Zhiou Furniture mainly conducts cross-border e-commerce for Europe, America and Japan through overseas websites such as Amazon.

Chengdu Fun Sleep Technology is a company that was only established in 2016. After being favored by Xiaomi Chairman Lei Jun, its sales revenue reached 480 million yuan in 2018 and 550 million yuan in 2019 through the sales of Xiaomi Mall. The sales revenue in 2020 affected by the epidemic will also be 478 million yuan.

Macro data shows that in 2020, the online retail sales of physical goods in my country will be 975.9 billion yuan, an increase of 14.8%, accounting for 24.9% of the total retail sales of consumer goods, an increase of 4.2 percentage points from the previous year.

There is no nationwide online furniture sales data, but the sales of physical furniture stores dropped year-on-year last year.

Compared with the general background of the decline in physical sales and the increase in online sales shown by macro data, online sales in the furniture industry are better than physical sales.

The above three important examples also show that the increase in online sales is real.

4

Overseas Sales

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The most powerful industrial belt of China's furniture industry is located in the coastal areas. This is because enterprises in coastal areas often pay equal attention to both domestic and foreign sales.

Take Man Wah Holdings as an example. For a long time, its operating income has been equal to domestic and overseas. There are many years of opening in May. Last year, domestic income greatly exceeded foreign income, and domestic sales accounted for 60%.

Gujia Home Furnishing also has a huge overseas sales scale. Its overseas revenue in 2020 will reach 4.65 billion yuan, accounting for 36.7% of all revenue.

These two companies rank among the top three in terms of sales volume in the furniture industry.

Last year, furniture exports gained momentum. Since June last year, my country's furniture exports have seen strong growth, adding a rare color to the furniture industry. This wave of export growth has continued to this day.

Last year, my country's furniture and parts exports increased by 12.2% year-on-year, and the national export value was 403.85607 billion yuan.

In the first five months of this year, my country's furniture and its parts increased by 52.9% year-on-year.

There are many domestic sales competitors and it is difficult to make profits; foreign sales have seen rapid growth.

The current situation of the furniture industry is familiar to each other compared to ten years ago.

The internal differentiation and adjustment of the furniture industry is an eternal phenomenon. Whoever can seize the opportunity in the current market and act decisively and quickly will be the winner.

There are new opportunities in the finished furniture market, new opportunities in online sales, and even in overseas markets. Opportunity always favors the discoverer who is prepared.