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1、CONTENTS Error! No text of specified style in document. August 2011 | 1-800-330-3772 | IBISWorld Industry Report 6582 Furniture Stores in China August 2011 About This Industry . 2 Industry Definition . 2 Main Activities . 2 Similar Industries 2 Additional Resources 2 Industry Performance 4 Executi
2、ve Summary 4 Key External Drivers . 4 Current Performance 5 Industry Outlook 7 Industry Life Cycle 8 Products (2) Department Stores Industry: Department Stores also retail a wide range of furniture products; and, (3) Mail-order and Electronic Shopping Operators: operators in this industry retail fur
3、niture products via remote communications without the necessity to run open stores. High-end and low-end furniture retailers In this industry, there are two kinds of players: high-end and low-end furniture retailers. High-end players build their own furniture stores, often at great expense, and oper
4、ate the stores exclusively. The products in the stores are usually their own brands or specialized brands from well-known enterprises. The competition between high-end players mainly focuses on product variety, product design, one-stop purchasing services, on-demand customization, etc. Their product
5、s are high-priced, and their major customer base consists of people that consider quality, design and brand reputation above price. On the contrary, low-end players compete mainly on price. They do not have large funds to invest in their own furniture store and can only rent small areas to display p
6、roducts on a small-scale. Their products are not as competitive and attractive as high-end stores, while they can attract price-sensitive customers by offering low-priced and simple-design practical products. WWW.IBISWORLD.COM.CN Furniture Stores in China August 2011 21 A new store type called “furn
7、iture supermarkets“ has developed in recent years in China. Furniture supermarket operators build large-scale business buildings that are rented to small furniture retailers to display their products as they do in independent stores. However, furniture supermarkets offer extra advantages, such as pr
8、omotional effects and reputations of supermarket brands, professional property management, relatively lower rents, greater product variety, and other special services. Therefore, furniture supermarkets have become a new form of furniture retailing that is competitive with high-end retailers. WWW.IBI
9、SWORLD.COM.CN Furniture Stores in China August 2011 22 Barriers to Entry Barriers to entry are medium and increasing. Barriers to Entry checklist Level/Impact Industry Competition High Industry Concentration Low Life Cycle Stage Growing Capital Intensity Low Technology Change Low Regulation and Poli
10、cy Medium Industry Assistance Low SOURCE: IBISWORLD Large-scale furniture retailing often requires substantial initial investment to rent buildings, storage places, and exhibiting large amounts of furniture. Purchasing and transporting furniture also requires large sum of liquidity to operate. Compe
11、tition among large retailers is still at a low level. This leaves opportunities for new players to enter. However, existing players will rapidly expand sales networks to suppress the growth of new competitors. Supply and purchase relationships between retailers and suppliers are often well-establish
12、ed. Some large enterprise even own manufacturing companies. Leading enterprises in the industry have their own design and research center to develop new products, which enhances relationships as manufacturers rely on the orders and designs from retailers. Different from large-scale retailers, small-
13、scale retailers operate their business with low investment and small areas. Furniture supermarkets also offer low requirement for small retailers to enter, such as low rent, available areas, and utilities, as well as professional management. Due to differences in requirements for large-scale and sma
14、ll-scale players, the level of barriers to entry is evaluated as medium. WWW.IBISWORLD.COM.CN Furniture Stores in China August 2011 23 Industry Globalization The level of globalization is low and increasing. Industry globalization is low as the number of foreign-owned enterprises accounted for just
15、0.8% of total enterprise numbers in this industry in 2008. However, foreign enterprises generated approximately 11% of total industry revenue in 2008, which indicated that foreign players were more competitive compared with domestic firms. It is forecast that in 2011, foreign-generated revenue will
16、account for 14% of industry revenue and 1.4% of stores. China opened its retail markets to foreign firms in December 2004. As part of Chinas obligations to the WTO (World Trade Organization) in 2001, imported furniture tariffs were set to zero in January 2005. These measures enabled foreign furnitur
17、e retailers to more easily enter China with their stores and branded products. The entry of foreign enterprises is expected to continue to increase in the future. IKEA Group was the largest foreign enterprise in the industry in China. The Swedish-based company operates 315 stores in 38 countries and
18、 territories (as of the end of 2010). By the end of 2010, the company was operating six subsidiaries in China and is the largest company in this industry in revenue terms. Due to its strong competitiveness, brand image, and wide international influence, IKEA Group will continue to develop rapidly in
19、 China. WWW.IBISWORLD.COM.CN Furniture Stores in China August 2011 24 Major Companies Major Player Market Share IKEA Group 7.9% (2011) Kinhom Group 7.2% (2011) Yuexing Group 2.3% (2011) Shenzhen HoBa Home Furnishings Chain Enterprise Co., Ltd. 2.0% (2011) Jinan Fangzheng Furniture Co., Ltd. 1.0% (20
20、11) Other 79.6% (2011) IKEA Group Market Share: 7.9% IKEA Group is a well-known furniture retailer throughout the world. IKEA Group is based in Sweden, and the company owned over 300 stores in 38 countries at the end of 2010. Including the stores owned and run by franchisees outside the IKEA Group,
21、there are a total of 315 IKEA stores in 38 countries and territories. IKEAs furniture retailing strategy is to provide low-priced furniture with limited services. IKEA employs few staff per store, with furniture information and guidance provided by labels attached to the products. Customers find and
22、 select products themselves, and are also required to assemble their own furniture. The company offers very low prices to its target customers. It designs and modularizes its products, and sends orders to manufacturers around the world that can offer the lowest prices. IKEAs products are produced to
23、 minimize storage and packing space, which also lowers transport costs. Along with low prices and limited information services, IKEA provides its customers with additional services that other competitors do not offer. For example, IKEA stores offer childcare service rooms, Swedish restaurants with l
24、ow-priced fast-food and longer trading hours on public holidays. IKEA also publishes catalogues each year to promote its new products and furnishing concepts. However, IKEA progressed slowly in Mainland China. The first IKEA store was opened in Beijing in 1998. By July 2010, there were only eight mo
25、re stores in China, located in five major cities: Beijing, Shanghai, Guangzhou, Chengdu, Shenzhen, Nanjing, Dalian and Shenyang. Some reasons for the slow progress include: 1. IKEAs “limited services“ are against traditional Chinese consuming concepts. In China, car possession levels are low, but ha
26、ve increased from about one car per 300 people in 1998, to about one car per 70 people in 2007. Therefore, paid delivery services (IKEA does not provide free but paid home delivery only) are not popular with Chinese customers. 2. Paid assembling services are also not popular with Chinese consumers a
27、s most customers in China do not have the skill, time and motivation required. WWW.IBISWORLD.COM.CN Furniture Stores in China August 2011 25 3. One of IKEAs advantages is offering low prices. However, IKEA has kept prices at international levels, which are considered by Chinese people to be luxuriou
28、s and for wealthy people. Although IKEA has lowered its prices in China several times, they are still higher than average consumer expectations. 4. Swedish or European-style furniture is not popular with Chinese customers. The lack of Chinese culture in products deters Chinese customers from IKEA. H
29、owever, this is changing as the younger generation who prefer western styles are now capable of furnishing their own house. IKEAs revenue in China increased strongly since its entry to China (financial data of IKEA in 2003 and 2004 is not reported). In 2004-05 (year end August), sales revenue of IKE
30、A in China increased by 21%, surpassing $146 million (RMB 1.2 billion). However, that was less than 1% of the $18.42 billion (14.6 billion) revenue of the whole IKEA Group in 2004-05 (all data from IKEA financial reports). IKEA is trying to adapt the Chinese furniture market. In April 2006, the IKEA
31、 Shanghai store lowered its delivery and assembling charge, and offered free delivery if total consumption reached a certain threshold. IKEA also made some other adjustments to its unified market strategies for Chinese customers, such as longer time limits for returning unwanted or faulty goods. IKE
32、As strategies are working well, as IKEA announced over 30% growth in both 2005-06 and 2006-07. In May 2010 IKEAs store in Shenyang was put into operation. This follows store openings in Shenzhen and Nanjing in 2008, and the opening of IKEAs second store in Dalian in 2009. IKEA also expanded its busi
33、ness into large-scale shopping malls in combination with IIGG. In November 2009, IIGG announced the establishment of two large-scale shopping malls in Beijing and Wuxi, respectively. In the 2010 fiscal year, IKEAs sales revenue from China totaled $546.6 million, up 24.1% from 2009. By August, 2009,
34、IKEA employed 4,000 people in China. In the five years to 2015, IKEA expects the number of its stores in China to double by opening new stores in Beijing, Shanghai, Wuxi, Jiangsu and Wuhan. Kinhom Group Market Share: 7.2% Kinhom Group is owned by Heung Kong Group, a large-scale private enterprise, w
35、ith more than 20,000 staff. Heung Kong Groups businesses include home furnishings distribution, metals and energy resources, real estate development and financial investments. The home furnishings division is run by Kinhom Group. Kinhom Group has established a nationwide chain of over 200 large-scal
36、e furniture stores and has been the largest furniture retailer in China since 1989. However, IKEAs entry into China threatened Kinhom Groups leading position. Kinhom Group invested in Shenzhen Kinhom E-business Co. Ltd in 2000 to set-up electronic management systems, such as SAP and specialized ERP
37、systems. In 2004 Kinhom Group obtained ISO9001 quality management system certification. Kinhom Group continues to maintain its leading position in the industry due to its strong relationship with furniture suppliers, unified channels for purchases and sales, network of nationwide delivery centers an
38、d after-sales service for customers. Kinhom is now transforming from a furniture retailer to a furnishing products retailer and is looking to expand into foreign markets in the future. WWW.IBISWORLD.COM.CN Furniture Stores in China August 2011 26 Yuexing Group Market Share: 2.3% Yuexing Group starte
39、d as a small rural wood furniture factory in 1988, and opened its first retail stores in Shanghai in 1994. Its main activities include design, manufacturing and sales of high-end household and hotel furniture. In December 1998, Yuexing opened its Nanjing furniture store. In April 2000, its Shanghai
40、furniture store was opened. By July 2011, Yuexing had opened nearly 20 stores, covering a total operating area of over three million square meters. Yuexings production lines were imported from France, Italy and Spain, and it manufactures first-class products under the Antico, Empire Craftsman and St
41、ory brands. Its high-end hotel furniture products are utilized by over 100 four and five-star hotels in China. Yuexings products are also exported to the US, Canada, Japan, Singapore and Hong Kong. Its business has expanded into 38 countries and regions in the world. Yuexing started the construction
42、 of its Changzhou furniture store extension in 2005, and is expected to have over 100 furniture outlets in major cities across China in the next few years selling its branded products. Yuexing will continue to establish its national retailing network, as well as to improve its design and manufacturi
43、ng facilities and brand promotion in China. Yuexing Group became the designated sponsor of the Shanghai World Expo for the furniture industry in 2010, which will further improve the companys brand influence. Shenzhen HoBa Home Furnishings Chain Enterprise Co., Ltd. Market Share: 2.0% HoBa was establ
44、ished in 1997 as Xi Yun Deng, a household furniture retailer. After opening several Xi Yun Deng furnishing stores in Shenzhen, the HoBa (in Chinese “Hao Bai Nian“) brand was started in January 1999, with the first branded furnishing store opening in Shenzhen. In August 2000, all Xi Yun Deng stores w
45、ere changed to HoBa stores. By 2011, HoBa had opened 20 chain stores in major cities across China, including Beijing, Shanghai, Shenzhen, Zhuhai and Xian. Of these, 15 stores have an area of over 30,000 square meters. HoBa operates three retail brands: HoBa Home Furnishings, Meten Living Design and
46、Banny Office Stores. These brands retail middle and high-end furnishing products, luxurious top-style household products and top-grade office products, respectively. HoBa purchases branded products from domestic and foreign manufacturers to retail in its stores. In each HoBa store, customers can bro
47、wse, select and buy all of the companys furniture products in the one store. HoBa has also formed partnerships with other enterprises, such as with B (2). Wholesaling: Distributing goods to retailers, industrial, commercial and institutional customers and other wholesalers and providing them with re
48、lated services; (3). Retailing: Distributing goods to individuals or organizations for their consumption or use at fixed outlets or by TV, telephone, mail, the internet and automatic vending machines and providing related services; and (4). Franchising: Licensing trademarks, trade names and business
49、 models to others by contract in exchange for compensation or royalties. Measures detail the procedures and requirements with respect to the establishment and operation of FICEs. Most notably, the Measures remove the special minimum capital requirement for foreign investors and the restrictions on foreign ownership in FICEs previously set forth in the 1999 Pilot Measures. The minimum registered capital requirement for FICEs now conforms to the standards set by Chinese Company Law. New National Standards on Classification