Medical Dressing,Absorbent Cotton Roll,Cotton Roll,Sterile Gauze Swabs COTTONWHISPER (TAIZHOU) DAILY PRODUCTS CO.,LTD , https://www.cottonwhipershop.com
Furniture channels are gradually sinking, customizing the growth rate of enterprises or accelerating
The furniture industry has experienced significant growth, fueled by both exports and domestic sales. However, the focus is shifting toward domestic market development. In recent years, the share of export revenue in China’s furniture industry has declined from 37.45% in 2008 to 23.49% in 2013. Over the past three years, the export segment grew at a CAGR of 7.27%, while domestic sales surged at an impressive 21.1%. This shift indicates that brand competition will play a central role in the future. The domestic market is still evolving, with no single brand dominating the landscape. As large furniture companies pivot their strategies toward domestic sales, building strong brands will become crucial for capturing market share.
The industry's growth rate has remained relatively stable, with a three-year average CAGR of 17.8%. Looking ahead, we expect growth to remain around 15% in the coming years, which is more consistent than the pre-financial crisis era. To sustain high-speed development, companies must adapt to changing consumer demand. We anticipate a "dumbbell-shaped" demand structure: on one end, the rising middle and upper classes are driving demand for premium, customized furniture; on the other, urbanization is bringing more rural populations into cities, creating a growing need for affordable options.
The overall industry concentration remains low, with China’s furniture sector having a CR10 of just 3%, compared to 40% in the U.S. This lower concentration stems from diverse income levels and varied product demands. While the market is fragmented, certain sub-sectors like mattresses and custom furniture are showing signs of consolidation. Drawing from the U.S. model, we believe that Chinese furniture companies with strong brands and technological capabilities will gain a competitive edge in these segments.
Large furniture manufacturers have demonstrated strong cost control, with gross profit margins steadily increasing. While the average gross margin for Chinese large firms is around 40%, this is still below the U.S. level of 81.48%. However, improved operational efficiency and increased advertising spend are expected to further boost margins. This financial strength provides room for expansion and brand investment, making the outlook for leading companies optimistic.
Furniture companies with well-established distribution networks in less-developed regions can grow faster. These areas, though with lower consumption power, show higher potential for household demand growth. With second- and third-tier cities outperforming first-tier cities in real estate sales, companies that have expanded into these markets are well-positioned to capture new opportunities. By focusing on these emerging regions, furniture firms can scale their operations more rapidly.