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Furniture Market in China

Updated: Mar 11

May 19, 2022

Furniture is in high demand in China, which has a large population and an ever-growing middle class, making it an incredibly profitable industry.

The growth of the Internet, artificial intelligence, and other advanced technology in recent years has aided the development of the furniture sector. The impact of COVID-19 reduced the size of the furniture industry's market in 2020. According to data, retail sales in China's furniture business totalled 159.8 billion yuan in 2020.

“As per estimates, China leads online furniture sales globally with an estimated sale of over USD 68.6 billion in 2019. The rapid development of e-commerce in China has increased the sales channels for furniture in the past 2-3 years. The online sales of furniture through online distribution channels increased from 54% in 2018 to around 58% in 2019 as consumers are showing a rising preference for the purchase of furniture products online. The steady growth in e-commerce and the rise in retailers adopting online channels for selling their furniture products is anticipated to further increase the demand for furniture products in the country.”

The Myth of “Made in China”

The "Made in China" myth is well-known around the world. People believe that Chinese items are of poor quality. This is certainly not the case. If the Chinese had been producing furniture while sacrificing quality, their exports would not have expanded so much. Since designers began having their furniture made in China, this perception has shifted in the Western world.

There are more and more quality suppliers in China that can make quality items at reasonable pricing, such as Nakesi, a Guangdong plant that solely does OEM for high-end customers outside.

When did China Become the Largest Exporter of Furniture?

Prior to China, Italy was the leading furniture exporter. However, in 2004, China overtook the United States as the country with the most furniture exports. Since then, there has been no looking for this country, and it continues to supply the globe with the greatest number of furniture. Many of the major furniture designers have their furniture manufactured in China, though they normally avoid discussing it. China's population is also important in making the country the largest exporter of numerous things, including furniture. With an estimated value of 53.7 billion US dollars in 2018, furniture was one of China's biggest exports in 2018.

The Exclusivity of the Chinese Furniture Market

China's furniture may be rather distinctive. You may even find furniture that does not utilize nails or glue. Traditional Chinese furniture manufacturers believe that nails and glue shorten the life of furniture by rusting and becoming loose. They create furniture such that all elements may connect with each other without the need for screws, glue, or nails. If built of high-quality wood, this sort of furniture can last for decades. To properly assess the amazing technical mentality of Chinese furniture producers, you must experience it. You'll be shocked at how they link various sections without leaving any trace of the connection. It appears that only one piece of wood was utilized to construct the whole sculpture. This is beneficial to all stakeholders involved in the furniture sector, including manufacturers, designers, and retailers.

Source: Statista

Areas where the Local Furniture Industry is Concentrated in China

China is a large nation with several local furniture industries in various areas. The Pearl River Delta has the greatest furniture production rate. Because of the abundance of natural resources, it has a strong furniture business. Shanghai, Shandong, Fujian, and Zhejiang are also well-known for their excellent talents in creating high-quality furniture. Because Shanghai is China's largest metropolitan metropolis, it has a massive furniture market, maybe the largest in the Yangtze River delta. The centre and western areas of China lack the necessary resources and facilities to support a robust furniture sector. This industry is still in its infancy over there, and it will take time to mature.

Beijing, China's capital city, has an incredible flow of resources accessible to furniture manufacturers. All of the tools and facilities necessary for furniture production are also there, thus an increasing number of furniture manufacturers are interested in opening corporate headquarters in Beijing.

Why Does China Produce Higher-Quality Furniture Than Other Countries?

Although China has a reputation for creating low-quality goods, it also produces high-quality furniture. According to a study, more than 50,000 enterprises in China create furniture. Surprisingly, the majority of them are small to medium-sized businesses with no brand identity. In recent years, various enterprises with their own brand identities have evolved in the furniture manufacturing sector. These firms have enhanced the industry's degree of competitiveness.

According to a poll performed by the Hong Kong Trade Development Council (HKTDC), small to medium furniture firms in China may make a lot of money if even a tiny fraction of the Chinese population decides to get rid of its old-fashioned furniture and embrace a more modern style. This adaptability and growth within the business are why producing furniture in China is the best option for meeting consumer wants and desires.

Revenue in China on the rise

The most crucial evidence that China manufactures higher-quality furniture than its competitors is the growth in income. According to one estimate in 2010, 60 percent of China's entire income came from its furniture business, which was sold both locally and internationally. The COVID-19 epidemic harmed the industry in 2020, but long-term growth is likely to recover. Over the next five years, industry revenue is predicted to expand at an annualized rate of 3.3 percent, totalling $107.1 billion.

While metal furniture is currently more popular in the West than wood furniture, China is predicted to outperform the West in this industry due to its incredible furniture-producing skills and refusal to compromise on quality. As previously said, this is a positive indicator for both makers and sellers since it increases the perception and worth of the market as a whole.

China Furniture Market Trends

The Impact of China's Urbanization on the Furniture Market

China's economy has been booming, and it doesn't appear to be slowing down anytime soon. Because of employment prospects, higher education, and a substantially better lifestyle, the younger generation is now migrating to cities. Because the younger generation is more trend-savvy and self-sufficient, many of them are living on their own. The ever-increasing trend of new home construction has likewise pushed the furniture sector to new heights.

As a result of urbanization, new brands have emerged in the Chinese furniture sector. Their most devoted clients are younger individuals, who are more likely to adopt new trends and have tremendous spending power. This urbanization is also having a detrimental impact on the furniture sector. It is causing forest loss, and high-quality timber is becoming increasingly rare and expensive. Furthermore, there are several groups striving to protect the environment and minimize deforestation. The government is taking steps to boost the number of trees in the country in order to ensure that While safeguarding the environment, the Chinese furniture sector continues to flourish. Because this procedure is time-consuming, Chinese furniture manufacturers import wood from other countries, and some firms export finished wooden items and furniture to China.

Living & Dining Room Furniture: the biggest selling segment

This area has been gradually rising, accounting for roughly 38 percent of the Chinese furniture market in 2019. The living room category is soon followed by kitchen and dining room equipment in terms of popularity. With the proliferation of high-rise structures, this tendency is notably visible in the country's southern and eastern regions.

IKEA and innovation within the industry

IKEA has a very excellent and established business in China, and the brand's market share grows year after year. Ikea collaborated with Chinese e-commerce giant Alibaba in 2020 to build the first large virtual shop on Alibaba's e-commerce platform, Tmall. This is a very smart business move since the virtual shop allows the Swedish furniture manufacturer to reach many more consumers and experiment with a new manner of promoting their items. This bodes well for other furniture brands and producers since it demonstrates the market's phenomenal development and the innovations accessible for them to reach consumers.

The Popularity of “Eco-friendly” Furniture in China

The notion of eco-friendly furniture is becoming increasingly popular. Chinese customers recognize its significance and are willing to invest in it, even if it comes at a greater cost. Eco-friendly furniture is devoid of any toxic chemicals, such as fake odours and formaldehyde, which can be damaging to one's health.

The Chinese government is likewise concerned about the environment. This is why the government enacted the Environmental Protection Law in 2015. Many furniture firms were forced to close as a result of this regulation since their practices were incompatible with new protectionist rules. The regulation was clarified further in December of the same year so that furniture makers are aware of the requirement to use formaldehyde-free goods that are not damaging to the environment.

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