This year’s China (Guangzhou) International Building Decoration Fair was the largest and most influential of its kind in Asia, with over 2,400 companies exhibiting their products on a fairground covering 320,000 sqm.
It was jointly hosted by the China Foreign Trade Centre (Group) and China Building Decoration Association.
The “Integrated Furnishing Section” this year will likely set the trend for the future development of China’s building decoration industry as it combines re-pricing with utility.
The building decoration business is upstream of the real estate industry and its development is deeply affected by property market trends.
However, many exhibitors pointed out that although the government’s tightening of control over the property market has affected their businesses, the direct impact is not very significant.
|The fairground is packed.|
Future prospects remain bright, although consumers have become more rational when spending.
Companies can still find opportunities as long as they can guarantee the quality of their products.
There was indeed statistical evidence available. China’s building decoration industry grossed Rmb2.35 trillion in 2011 and is expected to gross Rmb3.8 trillion by the end of the 12th Five-Year Plan (2011-2015), under the dual drive for public building refurbishment and more refined home decoration, according to official statistics.
This suggests a compound annual growth rate of 12.6% and an annual increase of Rmb340 billion.
The building decoration industry has expanded from a small, traditional industry into one of the three pillars of the building and construction businesses.
Xu Jinrong, Executive Director of Meizhixuan International Building Material Co of Hong Kong, said his company was incorporated in the SAR in the mid-1990s and began venturing into the Mainland market in 2002.
|Visitors examine a wooden door.|
He said they face many challenges under the impact of property sales restrictions and rising wages, rent and cost of raw materials – yet still saw a 40% jump in sales revenues over the same period last year.
In Xu’s opinion, the company took advantage of the situation by adjusting its marketing strategy, producing more avant-garde and individualistic products.
This met a higher price-performance ratio on the one hand and strengthened production management and product quality on the other.
He Zhaohui, Furniture Marketing Director with Guangdong Oppein Home Group Inc, said his company produces a wide range of building decorations and can customise kitchen units, wardrobes, doors and other items for clients. Its sales of kitchen units so far this year showed an increase of between 30% and 40% compared with the same period last year.
Sales of recently launched custom-made doors even registered a year-on-year increase of over 300%, said He. These figures give a glimpse of the potential market.
He said his company has adopted a series of measures to ensure good business for dealers and focused on product quality to increase consumers’ confidence.
Integrated furnishing the trend
An integrated furnishing solution is a “bundled” service model that takes interior decoration as a holistic concept in the marketing of products.
According to the fair organiser, integrated furnishing is the hot topic in the building materials and interior home furnishing industry.
Integrated furnishing has become an important form of quality lifestyle. An “Integrated Furnishing Section” was set up at this year’s Guangzhou building decoration fair in line with the trend.
Guangzhou Shangpin Home Decoration Co showed model decorations for living rooms, bedrooms, kitchens and other parts of homes it designed. Also on display were wooden doors, dining tables, wardrobes and beds designed and produced by the company.
According to Proprietor Zhang Hong, Shangpin can design and produce any building decoration product people need. The biggest advantage of integrated furnishing solutions is that they give homes a unified style.
|A unique piano with inlaid decorations, priced at Rmb5 million.|
The company can provide one-stop services, from design to production and installation. This saves clients the trouble of having to shop for wardrobes at one place and kitchen units somewhere else.
In Zhang Hong’s opinion, the mainstay consumers in today’s building decoration market have changed from people of the “post-1970s” generation to people of the “post-1980s” and even “post-1990s”.
People now set greater store by individualisation of home decorating and the market is showing greater potential as these young consumer groups grow.
Integrated furnishing is expected to become the core of the building decoration industry.
Shangpin‘s annual turnover is growing at a rate of over 50%, with turnover in the slack season of each year surpassing peak season turnover in the previous year.
|Exhibitors negotiating deals.|
Integrated furnishing will allow companies to integrate their resources and seek greater business opportunities.
The Huahe Group specialises in designing and producing mid- to high-end doors and wardrobes. According to Huahe‘s Deputy General Manager, Ruan Qipeng, the company uses the same brand for its doors and wardrobes.
But it has two separate production lines and marketing channels for these products. In view of the expanding market for integrated furnishing, a company can better pool its resources and increase its competitiveness by selling home furnishing products in custom-made package deals, Ruan believed.
He cited an order for a custom-made door at a price of Rmb30,000 with a wardrobe of the same style. If a company also produces wardrobes, the probability of his ordering both items is very high.
The value of the bundled order will climb to between Rmb50,000 and Rmb60,000. Ruan said his company was hoping to explore ways to integrate its resources.
Product safety and environmental protection
|A model presenting bathroom fixtures.|
Many exhibitors noted that people are equally concerned about product quality and environmental protection as the price of their homes. So, manufacturers have devoted more attention to product quality.
He Zhaohui said over 95% of the materials for making the body of Oppein wardrobes and kitchen units are imported. Environmental compliance inspections by Chinese Customs when the goods are imported ensure that the materials used are eco-friendly. All Oppein products carry the “China Environmental Labelling” certification.
The Huahe Group also has its own set of environmental criteria. According to Deputy General Manager Ruan Qipeng, his company adheres to European environmental protection standards, which are much higher than Mainland standards, because some of its products are exported to countries such as Japan and France.
Intelligent and high-tech building decoration
Exhibitors using technology to market their products and building decoration products featuring intelligent technology could be found at every corner of the fairground.
Guangzhou Shangpin Home Decoration Co made use of 3D software in home decoration design.
|Exhibitors hire models.|
Designers put wardrobes, doors, wallpapers and other products in virtual homes on the computer to give clients more concrete ideas of the finished design and help them choose their favourite combinations. The company then makes the relevant products to order and installs them onsite.
Zhang Hong said Shangpin employs professional designers for home furnishing products according to clients’ specific needs. Showing clients 3D pictures of the newly-designed home helps minimise losses on the part of both the company and the client.
Some exhibitors displayed a variety of intelligent products. There was an intelligent folding door with a microwave sensor which opens when someone walks past and closes after the person is gone.
Another exhibit was a clothes rail lamp with an on/off switch that works on body infrared radiation. The lamp is lit when someone opens the door of the wardrobe and is switched off 30 seconds after the door is closed.