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Wood Flooring Industry in China
The flooring industry in China has been affected by the depressed real estate sector in the year 2014. This has caused a slowdown in growth rate, the sales volume reached 390 million square meters with a decline of 2.8% year on year. However in 2015, the Chinese Government issued a series of favorable policies to ease the gradual recovery of the commercial housing market and stimulated the demand for wood flooring which is expected to have a growth of 4.2%. The policies are:
- Lowering proportion of down payment for second house loans
- The exemption of sales taxes for ordinary housing
Moreover, The pursuit of high-quality lifestyle grows in accordance to the consumption levels of the population of China. The laminate wood flooring enjoys the highest sales volume, as sales figure in 2014 was approximately at 210 million square meters. This accounts for 54.7% of the total sales volume of the wood flooring industry in China.
In China, the wood flooring industry can be classified into five different categories
- Solid wood flooring
- Engineered solid wood flooring
- Laminated wood flooring
- Bamboo wood flooring
- Corkwood flooring
Since 2004, there has been a rapid development in engineering wood flooring and increasing residential construction in urban and rural areas. Engineering wood flooring is becoming attractive in the Chinese Market due to its low price and easiness for cleaning, wear resistance and impact resistance. In 2010, engineered wood flooring has occupied 56% and 82% of the total output and sales volume of wood flooring in China. Additionally, bamboo flooring is increasingly popular among the consumers due to the benefits such as environmental friendliness and high price-to-performance ratio.
Adding to that, the increasing residential construction in the company of the changing lifestyle generates a demand for wood thus, driving the wood flooring market. There have been some concerns over the environment such as deforestation that could restrain the growth of this market. However, there are wood products that are also being used as a source of recycled products, which could promote the growth of wood flooring market. The development of the Chinese wood flooring market has caused the uprising of large enterprises and big brands such as Power Dekor, Nature, Elegant Living, Der, Shengda, and Tubaobao.
Interview with Alexandre Gauthon of AL Flooring
In light of this market research, our Market Research Assistant, Arthur Seet had the pleasure of interviewing Alexandre Gauthon of AL Flooring to get his insight and expertise in this industry. Alexandre Gauthon has been in the flooring industry for six years and is continuously gaining recognition as he provides “European style wood flooring” in China, Hong Kong, and Thailand. In 2011, Mr. Gauthon began working for a Flooring Company and was in charge of developing the sales team in Asia, finding projects, and hiring people. In 2013, he left the company and established AL-Flooring with the goal of bringing the beauty of wood floorings into high-end venues and private designer’s apartments. During the interview Mr. Gauthon, stated in the Chinese Market, solid wood is preferred, however in China, solid wood is a piece of wood that is short and shiny, even with the name solid wood, Mr. Gauthon begs to differ as he states in China solid wood is actually Medium-density Fibreboard (MDF) with small percentage of real wood that wears out within a period of 5 years time. According to Mr. Gauthon, one of our most popular products is the reclaimed and recycled flooring which has now become very popular in Asia’s market. It provides the authenticity of wood flooring while promoting sustainability and remaining economical. Reclaimed and recycled flooring has become a very big trend with more architects and designers are moving towards those products. In addition, the market has been grown and evolved over the recent years. In the beginning of the year, there was a high demand in the flooring industry that started to stabilize over time. Mr. Gauthon states as long as there is development in China, of houses, apartments, restaurants or buildings there will always be growth for the flooring industry.
See their website: http://www.al-flooring.com/
Daxue Expert conclusion
In the Chinese market, three important aspects to the Chinese consumers would be the cost quality and service of the product. The majority of the Chinese consumers focus on choosing a product that has equal value in price and quality and not the design. A floor that is both durable and economical is the optimal option for the Chinese consumers. Furthermore, the after service plays a very important role in the Chinese industry. Indeed, the Chinese consumers expect excellent service once the products are purchased; for the wood flooring industry, the installation is a vital part of the customers’ experience, which directly correlates to the brand image of the company.
Experts of Daxue Consulting agrees with Alexandre Gauthon and concludes that China’s wood flooring market is still growing and providing there is still development in the country in terms of infrastructure or pioneering projects, there will be room for this industry taking into consideration of the environment, price and service.
Case Study – Flooring Industry in China
Daxue Consulting has worked for one of its clients in the flooring industry, the objectives of the research were to identify and understand the flooring sales trends in China. 70 online surveys were completed by flooring professionals in China such as flooring contractors / dealers / installers etc. The report helped the client to get the insights of the market in China. In addition to the sales trends, the report also provides information for planning and marketing.
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