How to establish a global development pattern for home furnishing enterprises?
With the changes in the domestic market environment and the upstream real estate industry, the growth rate of home furnishing enterprises began to slow down. After 20 years of vigorous development, the home furnishing industry entered a period of reshuffle, which put forward new requirements for enterprise brand building, product structure, service mode and market layout.
With the increasingly fierce competition in the domestic market, many enterprises began to focus on overseas, and the leading enterprises began to layout early, opening up a global business idea.
China is the world's largest exporter of furniture products. In 2021, China's furniture and spare parts exports reached 472.2 billion yuan. Cross border e-commerce also continues to increase categories of household products, expanding wider channels for household products export.
In the first three quarters of 2022, the overseas business of finished furniture enterprises is the main force of income increase. The overseas business layout of major customized home furnishing enterprises has also become large-scale.
Oupai Home has more than 6000 stores in the world, covering about 188 countries on 6 continents. According to the official website, Europa is attracting investment from at least 40 overseas countries, including the United States, Israel, India and Mexico.
In November, Zhibang Home 9S Exhibition Hall opened in Kuala Lumpur, which is another new shop after the opening of Thailand, Cambodia, the Philippines and other capitals, marking the completion of the retail layout of Southeast Asian capital cities.
The whole house furniture customization industry model of Shangpin Homestead has also been successfully exported to Thailand, Poland, India, Indonesia, Singapore and other countries.
Many home furnishing enterprises have been "going abroad" for many years. The problems they found and the results they gained in the process of overseas expansion should become industry experience. All enterprises use the existing data as a reference for future overseas layout to find the outbreak point of overseas market dividends.
Differentiated layout makes "going to sea" more powerful
Among many home furnishing enterprises going international, the "Sailing" performance of gold medal kitchen cabinets is relatively outstanding. In the first half of 2022, the overseas business of gold medal kitchen cabinets achieved sales revenue of 122 million yuan, with a year-on-year growth of 42.29%.
As early as 2015, the gold medal kitchen cabinet began to try to expand its overseas market, adopting a differentiated layout for different markets.
Focus on promoting the expansion of RTA distributors in the North American market, achieve market breakthrough in the Australian market by engineering subcontracting, and strengthen the retail store channel layout in the Asian market. From 2016 to 2020, the overseas revenue of gold medal kitchen cabinets increased from 22 million yuan to 108 million yuan. In 2021, the sales revenue will reach 164 million yuan, with a year-on-year growth of 51.37%.
It is easy to see from the "going to sea" strategy of the gold medal kitchen cabinet that the differentiated market layout can help enterprises to accurately position according to the market characteristics of different countries and regions, and achieve business focus.
In addition to market differentiation layout, enterprises should also pay attention to brand differentiation in the process of product integration. When domestic household enterprises merge and acquire overseas brands, they should achieve a differentiated and layered brand layout in the process of product integration.
After Qumei Home acquired the recliner brand Ekornes from Norway, its Stressless and IMG brands have been walking in the high-end recliner queue, forming differentiation with its local brands, and targeting users of different ages, levels and consumption levels.
Yazhen Home Appliances, which also distributes overseas businesses, has not given full play to the complementary advantages of domestic and foreign brands due to the lack of outstanding brand differentiation, resulting in weak overseas business layout.
Overseas business expansion is not only to sell local products, but also to introduce foreign businesses. It is also necessary to capture the consumption trend through the expansion of the wide area market, learn advanced experience through the acquisition and merger of overseas brands, and finally establish a global thinking for enterprises to form a stronger brand potential and further development.
Overseas market expansion is a big test of enterprise's overall ability
Globalization is a new growth point for enterprises, as well as a severe test of operational capabilities and strategic decisions.
From January to August 2022, the export volume of China's furniture products decreased by 8.5% year on year, mainly due to the rising cost of shipping, rising raw material prices and exchange rate fluctuations.
The epidemic has led to port congestion, tight shipping lines, and a sharp rise in freight rates. Some enterprises even started to purchase cargo ships by themselves. More enterprises still rely on cross-border e-commerce and the turnover of overseas warehouses.
The proportion of materials in the furniture manufacturing industry is relatively high, and the price changes of bulk materials such as steel, cotton, oil, etc. affect the production costs of enterprises.
The appreciation of RMB corresponds to the devaluation of foreign currency, which increases the procurement cost for foreign enterprises, reduces the competitiveness of price sensitive export products, and the fluctuation of exchange rate will also cause enterprises to lose in exchange.
To continue to strengthen the brand potential and tap the dividends of overseas markets, it is necessary to improve the overall ability of the enterprise, gather strength to resolve the crisis, create new market breakout points, and improve the brand ability, channel ability and supply chain ability.
◎ Brand ability: when private brands go to sea, they need to fully investigate the target market and determine the brand positioning according to local conditions. If overseas distribution is carried out through acquisition and merger of overseas brands, it is necessary to do a good job in product integration, help self owned products open the market through overseas local well-known brands, and provide customers with different price and style product choices with differentiated products and different brand positioning.
◎ Channel capability: through sharing domestic and foreign channel resources, foreign brands can enter the domestic market, domestic brands can expand overseas channels, and leverage broader overseas channels through self built stations or cross-border e-commerce and other online channels.
◎ Supply chain capability: For large, non-standard and re delivered household products, to truly realize the global layout, most of the leading enterprises will set up factories or branches locally to improve their landing capability; Enterprises that do not have this foundation need stronger local supply chain integration capabilities, as well as the use and coordination of third-party resources.
The improvement of enterprise capability not only depends on the strategic vision and layout ability of decision-makers, but also needs to follow the development of the times and market with the help of external forces. Today, with the advent of digitalization, it is undoubtedly a powerful way to enhance the potential of enterprises with digital tools.
◎ Digital tools help to improve brand capability. With the help of digital software, improve the product attraction from the design side and integrate the online and offline channel layout, integrate cross-border e-commerce, live streaming, video sales and offline channels, accelerate the speed of overseas brand building through systematic brand promotion, and shorten the cross-border business operation link.
◎ Digital management improves management efficiency. Use digital capabilities to open up the overall link of design production storage transportation store operation sales after-sales service, improve production management efficiency and strengthen effective cooperation in all links. Through the timely data management system, we can capture customers' preferences and guide the design and product development based on market demand.
◎ Digital logistics helps supply chain management. The supply chain capability is the channel power for enterprise operation. Only when household enterprises go overseas, the overall operation link is extended, and the warehousing and logistics capabilities are improved through digital capabilities, and the supply chain operation efficiency is improved, can we increase the horsepower for "going to sea".
As a major importer of household products, the United States has introduced various anti-dumping policies against China's export furniture industry this year, and the purchasing power of American consumers has also declined significantly. However, the export volume of China's furniture products in Canada, Australia, Italy and other countries rose significantly, with growth rates of 111.6%, 13.81% and 23.06% respectively in the first three quarters.
The overseas market has huge potential for growth. At the moment when the domestic home furnishing industry is rolling in, making efforts overseas is one of the important means for enterprises to break the situation.
Home furnishing enterprises with long industrial links must first practice their internal skills if they want to explore overseas. The combination of strong internal power and differentiated market layout is the secret of overseas gold mining.
