Research on the Current Status and Future Trends of China's Furniture Industry

Currently, the prevailing sentiment in the industry can be summed up in one word: "cold"! This is a result of both external and internal factors. Externally: The direct and indirect impacts of the COVID-19 pandemic, international situation, economic downturn, and worsening macroeconomic environment mean that the macroeconomic outlook remains uncertain for the next 2-3 years; the civil furniture industry is directly affected by the downturn in the downstream real estate sector, with the real estate industry unlikely to return to its past state and a certain level of inventory competition; office and public furniture are not directly affected.
Looking at the industry internally: When market demand is strong, everyone can make a living; but during an economic downturn, the weak are the first to be eliminated. This is because the broader environment is beyond the control of individual companies, and strengthening oneself is the only way out. Therefore, the focus should be on the industry's internal dynamics, where the essence of the market is competition.
Profound Changes Within the Furniture Industry
The furniture industry is undergoing or has already undergone profound changes in three areas: the furniture itself, the product delivery model and market structure, and channel transformation and industrial ecology. Under these circumstances, individual companies must keep pace with the industry's evolution, or they will be eliminated.
Theoretical deductions and actual evolution may differ, but the differences only lie in the conditions of the ecosystem, the influencing factors, and the capabilities of various players. This will affect the speed of evolution, but not the overall direction.
Only by understanding the overall direction can we plan and forge our own creative path to success.
To understand the changes in the industry's ecosystem, we must view it from a historical perspective. Why? Because only then can we see the context and trajectory of evolution, and understand how the future will unfold.
1.1 Profound Changes in Furniture Products Themselves
From the "Product Era" to the "Product + Service" "Solution Era." From the 1980s after the reform and opening up to the first decade of the 21st century, the furniture industry was essentially in the product era. By the second decade of the 21st century, with the popularization of custom furniture and the introduction and implementation of concepts such as whole-house, whole-home, and whole-house decoration, the supply side gradually evolved from "providing products" to "solving problems," with the role of service becoming increasingly prominent. The "product service system" concept we introduced from Italy at the beginning of this century has been continuously validated by the specific practices of the contemporary Chinese furniture industry.
1.2 Rapid Changes in Product/Service Delivery Models and Market Structures
The delivery models for furniture products/services are also constantly evolving, with even more dramatic changes in the last decade. It started with basic sets marked by 4-6-piece bedroom sets, then extended from bedroom suites to individual items, and then to large whole-house furniture sets. These stages correspond to the product era.
The rise of custom wardrobes and companies originating in kitchen cabinets have pushed system furniture, primarily large cabinets, to a peak. Initially, it was separate from activity furniture, but now it is moving towards integration. At the same time, leading companies in some saturated markets are beginning to incorporate other interior components, ushering in a new model of full-case design and integrated delivery, which corresponds to the solution era.
1.3 Continuous Reshaping of Channel Transformation and Industrial Ecology
The essence of channels is "delivery," that is, accurately and effectively delivering a brand's value proposition to target users. There are two lines: one is the product/service line, and the other is the communication line. The former is the materialization of the value proposition, and the latter is the declaration of the value proposition's concept and benefits; the former involves the delivery of products and services, and the latter involves the accessibility and effectiveness of brand communication.
Speaking of channels, besides the B2B engineering channels that complement the real estate industry, the B2C retail channels currently commonly recognized in the industry are mainly superficial: physical channels, e-commerce channels, designer channels, and whole-house decoration channels. These are relatively direct and intuitive, but not in-depth. Among them, engineering channels have been severely impacted by the real estate industry's downturn, offline channels marked by physical showrooms have shrunk significantly, and e-commerce channels have reached a plateau. Therefore, many companies are trying designer channels and whole-house decoration channels. However, designer channels still have significant limitations, while whole-house decoration channels are still in the difficult exploration phase.
Compared to nearly twenty years ago, easily accessible channels are almost nonexistent. Deep cultivation of existing traditional channels and the establishment of new channels and multi-channel combined operations have become urgent issues to be addressed.
Channels are the arteries of a company. Relying solely on the single-channel model of traditional large physical showrooms is becoming increasingly unsustainable. Channels are showing a diversified demand and cross-port interaction. The "small and complete" and "large and complete" enterprise architecture models are outdated. Horizontal alliances and specialized social division of labor are the inevitable path. The nature of enterprises will need to be redefined, such as platform-type integrated enterprises, branded product-type enterprises (OBM), OEM and ODM-type enterprises, e-commerce and single-category enterprises, etc. The service and experience functions of channel ports will be further strengthened.
The dynamic development trajectory of the contemporary Chinese furniture industry is constantly evolving. Failure to understand this will lead to losing direction. The basic structure is now taking shape.
Technological advancements and changes in lifestyles will give rise to new functional layouts and spatial forms. Homogenized competition is the domain of large integrated enterprises, while the way out for small and medium-sized enterprises lies in innovation-driven development, with opportunities in specialization, high quality, and branding.