The appreciation of the renminbi and rising domestic costs are constantly weakening the good situation of China's manufacturing exports. The reporter recently learned in an interview with Tongling, Anhui, that the trend of the real estate industry is similar, and the furniture industry closely related to it is moving from the first-tier cities to the second- and third-tier cities. This trend will continue to emerge in the future.
Furniture exports plummeted from 20% to 8%
The appreciation of the renminbi and rising domestic costs are constantly weakening the good situation of China's manufacturing exports. The reporter recently learned in an interview with Tongling, Anhui, that the trend of the real estate industry is similar, and the furniture industry closely related to it is moving from the first-tier cities to the second- and third-tier cities. This trend will continue to emerge in the future.
Data show that in the first half of this year, the growth rate of Guangdong Shunde furniture exports fell by 5.39 percentage points year-on-year; the local furniture association revealed that the profits of enterprises above designated size in the furniture industry decreased by about 600 million yuan from January to July, and the profit loss of the whole industry was about 1.5 billion yuan. . Some insiders believe that under the pressure of RMB appreciation, adjustment of export tax rebate policy, rising cost of production factors and trade barriers, the decline in furniture export growth and the increase in volume reduction are inevitable.
At the China Furniture Market Development Forum held recently, Chen Baoguang, vice chairman of the China Furniture Association, also said that due to the appreciation of the renminbi and the increase in various expenses and costs, the growth of furniture exports has declined this year since the beginning of this year. In August, the growth rate of furniture exports has dropped from 20% to 8%, and export companies face many uncertainties.
According to Wu Zhihui, dean of the School of Furniture and Industrial Design of Nanjing Forestry University, this change was more obvious in the second half of last year and the first half of this year. The reason is the transfer of the real estate industry brought about by the regulation of the property market.
Since April last year, the state has successively launched three rounds of real estate market regulation, and the regulation and control has been gradually strengthened, and the market has also clearly differentiated. By August of this year, the transaction volume of the four most restrictive first-tier cities had fallen, and the volume of most second- and third-tier cities continued to rise. Many large-scale housing companies have begun to cut investment in first-tier cities and increase the layout of second- and third-tier cities.
A well-recognized view is that furniture, building materials and other industries closely related to the real estate industry are among the first to be under the “aftermath†of property market regulation. Subsequently, the second and third tier cities will also undertake the transfer of more industries.
The furniture industry is one of the most relevant industries in the real estate industry. In the rapid development of the real estate industry from 2006 to 2007, the turnover of China's furniture industry has also been rising. Since the second half of last year, the furniture market has shrunk with the downturn in the property market.
According to the National Bureau of Statistics, in August this year, the sales volume of the furniture industry was 9.8 billion yuan, which was the same as that in July, but the year-on-year growth rate fell by 3.6 percentage points. Since the beginning of this year, the sales volume of the furniture industry has continued to show a downward trend.
Furniture industry shifts to second- and third-tier cities
Exports are blocked, and the home market in first- and second-tier cities is becoming increasingly saturated, but at the same time, the development of secondary and tertiary markets is very active. Ren Xingzhou, director of the Market Economy Research Institute of the Development Research Center of the State Council, said that second and third tier cities are the cities and regions with the fastest economic growth and development potential in China in the future. Many national-level development strategies such as the “Chengjiang City Belt to undertake industrial transfer demonstration zone planning†"" also gave some development opportunities in the second and third-tier cities.
Similar to the real estate industry, the layout of the furniture industry in the first-tier cities is almost saturated, the competition of enterprises is fierce, and the spillover effect is obvious. Therefore, many second and third tier cities take the initiative to undertake the transfer of industries. Recently, Anhui Tongling invested heavily in the construction of furniture production and sales base, trying to make it one of the pillar industries of the city. Numerous furniture manufacturers have begun to brew and turn their eyes. They have already aimed at the second and third-tier markets. Countless dealers have also begun to “escape†from the first-tier cities, and like the Red Star Macalline, the Real Home, and the Sixth Space. The furniture chain giant also opened the market to cities below the third level.
However, Ren Xingzhou said that there are still many challenges in the development of the second and third-tier markets. Apart from the inter-regional blockade and the differences in industrial structure and policies, the competition is fierce and faces the crisis of homogenization and homogenization. At the same time, the market environment, order and integrity system are still in the process of construction, and it is not satisfactory. In addition, there are obstacles in terms of ideas and concepts. In particular, there are some third-tier cities that need further development, as well as gaps in talent reserves and resource allocation. Moreover, the new trends of regulation and control policies, especially the changes in the property market, have also had a great impact on second- and third-tier cities. Therefore, the industrial transfer to the second and third tier cities should be planned early. On the one hand, it is necessary to locate and segment the market; on the other hand, it is necessary to strengthen brand innovation, improve reputation, affinity, appeal and foster consumer loyalty. At the same time, draw lessons from Da Vinci furniture, emphasize green concepts, avoid systemic risks, low-carbon management, circular economy, and effectively protect the interests of consumers, integrity culture, establish a culture of integrity in the industry, and avoid unspoken rules.
In fact, similar to most real economy industries, the transfer of the furniture industry is also due to the pressure of rising costs. Wu Zhihui told this reporter that the high cost of labor, land, financing and raw materials in first-tier cities has greatly reduced the profitability of furniture companies. On the other hand, the increase in transportation costs has also prompted companies to move directly to second- and third-tier cities. Zhang Jun, general manager of Southern Furniture, told the Daily Economic News that logistics costs accounted for 6%-15% of the company's operating costs.
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