[Editor's note] This is the 2021 "Tao Xing China" national ceramic tile and sanitary ware market survey [Fuzhou Station] Issue 1: People's Views (Part 1). Due to the tight time and heavy tasks of this investigation, more information, more data, more characters, more opinions, more analysis... We will write and publish articles one by one in the future. A special reminder here is that the market research activities being conducted at the same time are also [Shenzhen Station], so stay tuned!
In order to understand the ceramic tile market in Fujian's core cities run by the Fujianese who are "best at selling ceramic tiles", China Ceramics Network's "Channel Fission, Market First" terminal market research went into Fuzhou on August 11, 2019. During the 7-day survey, the research team measured the ceramic tile market with their feet and carefully collected first-line information. It took 7 days and resulted in 6 research articles (see "6 Articles to Understand the Fuzhou Ceramic Ceramic Market" for details).
After two years, the Fuzhou ceramic tile market has undergone earth-shaking changes. The "channel fission, market first" terminal market research has also been upgraded to the "Taoxing China" national ceramic tile and sanitary ware market survey. On September 9, the China Ceramics Network's "Tao Xing China" national ceramic tile and sanitary ware market survey team (hereinafter referred to as the "Survey Team") came to Fuzhou to revisit the home building materials market they had visited and revisit the exchanges they had made back then. tile dealer.
01
“Rents are rising, labor costs are rising, but product prices are afraid to rise.”
——Roma Leo tile Fuzhou dealer Chen Dengxiang
Chen Dengxiang has been engaged in the ceramics industry in Fuzhou for 19 years and will be representing Romario for 15 years. When the China Ceramics Network terminal market research team visited Fuzhou in 2019, he was full of confidence.
Currently, in Chen Dengxiang’s business, the three major channels of distribution, assembly, and store retail, which are common in the industry, account for 35%, 30%, and 35% respectively.
Before 2019, the engineering channel, which accounted for 50% of its entire performance, is now facing a situation of being gradually abandoned. The reason for being abandoned is related to the difficulty in collecting payment for the project -“In the past, I could advance project funds, but now I no longer dare to advance funds. This does not mean that there is no money, but that there is no money in one's own pocket, and the money is all in other people's pockets. It is too difficult to get money through engineering channels." On the other hand, it is also related to traditional store retail channels.
Take the Xiyingmen headquarters store where Chen Dengxiang’s store is located as an example. Store rents, which account for the majority of retail channel costs for ceramic tile dealers, have doubled in the past few years, with a year-on-year increase of 60% in 2019. Now the rent has It has reached 280 years/㎡, and the rent is collected every two years in the form of a rental loan. This kind of rent level, judging from what the investigation team learned at other dealers in Fuzhou, is 40% higher than the Red Star Macalline 1 store and the headquarters store, and 20% higher than the Red Star Macalline No. 2 store. It is more than twice as high as the newly opened Camellia Modern Home Building Materials Plaza. While rents are high, store operating costs are also increasing at an annual rate of 15%, especially because consumers are increasingly demanding services, and the increase in labor costs has a tendency to exceed the rental growth rate.
Although the operating costs of the store are constantly increasing, Chen Dengxiang is still very confident in Romario tiles and himself. This year, he opened a new store in Red Star Macalline.
02
“Renovation, relocation, and resettlement housing expand the market size, but have no impact on leading brands.”
——Nobel Tiles Fuzhou dealer Zhang Yisi
Zhang Yisi, a Nobel dealer who is also in the Xiyingmen headquarters store, also has something to say. With the advent of the epidemic, Nobel, like Romario, has seen its engineering channel share continue to decline, and part of the declining share has been transferred to new retail channels - new retail has increased by 20% to 30% year-on-year. In 2019 before the epidemic, Zhang Yisi had 3 stores, but now he has 6 stores. Compared with his peers, it can be said that he is not on the rise. However, Zhang Yisi told the investigation team that his life was not particularly good: although his business continued to grow, operating costs in all aspects were also rising, and profit margins were declining compared to before the epidemic. Among the many factors causing cost increases, the increase in store rental costs can account for 15%. Like Chen Dengxiang, he also believes that high rents in stores have seriously affected the survival of tenants.
On the other hand, when it comes to the impact of the wave of urban renewal, relocation housing and resettlement housing on the industry, Zhang Yisi believes that although they have expanded the size of the Fuzhou ceramic tile market, they are still different from Nobel and Dongpeng. , Mona Lisa, Marco PoloThese top brands have little to do with it. Because this part of the housing supply is mainly rough housing, although it seems to be a good thing for brands like Nobel, which have an advantage in store retail, in fact, for those homeowners, Nobel, Dongpeng, Marco Polo, etc. Big brands are not the first choice. Instead, they mostly choose mid- to low-end brands with lower prices. Zhang Yisi said that after the epidemic, consumers have become more rational and believe that the quality of ceramic tiles is acceptable. Therefore, small brands below the waist have seized part of the market share of central brands with the advantage of ultra-low prices.
As for the future, Zhang Yisi is full of confidence: "With a big brand like Nobel behind me, I will always have a bite to eat. It's just the difference between living well and living better."
03
“Distributors must have experience in building brands.”
——Ying Brand Ceramics Fuzhou dealer Wang Changzhu
In 2001, Wang Changzhu was already a dealer of Eagle Brand, but his fate with Eagle Brand dates back to the 1990s - his parents were the earliest dealers of Eagle Brand Ceramics.
Wang Changzhu’s Fuzhou Eagle brand store is located in the Red Star Macalline No. 1 store, which is currently the largest home furnishing store in Fuzhou. According to him, Fuzhou Yingpai engineering channels currently account for 45% of the total business, large retail including decoration and designer channels account for 40%, while distribution channels only account for 15%, and they are also facing challenges at any time. At the same time, the market share of traditional retail channels, once the mainstream of the industry, has plummeted; and in the high-end field, the influence of designer channels is gradually expanding.
Wang Changzhu believes that the most important thing for manufacturers is to make good products, so that dealers can have the confidence to compete in the market. For dealers, representing a brand must concentrate on one thing. "Dealers must have a good reputation when building a brand. They must not only build a good reputation for the brand, but also build a good personal reputation. Only in this way can they always have a place in the complicated market competition."
04
“Products should return to their own material properties and decorative properties.”
——Huang Qimei, Fuzhou dealer of Asia Tile and Airmont Tile
Huang Qimei, like the two previous dealers, believes that the current store business is becoming increasingly difficult: store operating costs have doubled in the past three years, store warehouse rental costs, manual operations Investment and customer service standards are much higher than before; however, store customer flow has plummeted, product prices have continued to fall, and gross profit margins have already dropped to a level that is difficult to maintain daily...
There are many reasons for the decline in product prices. The rise of finely decorated houses and fully furnished channels has intercepted part of the market share that originally belonged to retail, and the flow of people in terminal stores has dropped sharply. With the popularity of private domain traffic and the advent of the short video era, all kinds of information are flying everywhere. For example, various platforms sell various low-price bricks in the name of Foshan manufacturers or origins, disrupting terminal audio-visuals and making people who are originally choosing ceramic tiles confused. Consumers who find it difficult to compare good and bad products are even more confused, and ultimately judge products and brands by price. In addition, the product designs, quality, and service contents of various brands are similar. In order to retain customers and maintain business, many merchants are forced to choose to start price wars.
It is precisely because he realizes that price war is a bottomless pit that has no effect except cutting his own profits and increasing operating costs. When Huang Qimei talked about how to deal with this change, he believed that we must be more careful in product selection. Rich to meet different styles and groups of people, broaden sales channels, and insist on working hard to provide customers with value-added services, insisting on winning terminals with quality and service reputation. This year, on the basis of being an agent for Asian ceramic tiles, their company has added Airmont ceramic tiles to enrich its product matrix. At the same time, he said, "The quality of the brand products we represent is very good, but now the share of retail channels has been reduced and operating costs have increased. As a dealer, we can only survive by ensuring a reasonable gross profit margin."
As for what kind of support measures she hopes manufacturers will provide, Huang Qimei said frankly that she has fought hard in the price war. Faced with such a competitive market environment, only manufacturers can respond proactively and insist on R&D and production with advantages and characteristics. Only by providing good products, merchants strive to improve their comprehensive ability to serve customers, insist on using word-of-mouth to build the brand, and solve the needs of end customers can they make the brand better. Regarding the question of "what kind of product is good?", he believes that the ceramic tile itself as a decorative material should focus more on the functionality and decorative properties of the material itself on the space. "For example, the anti-skid performance of ceramic tiles is of concern to many customers. For example, products that are more artistic and decorative are issues that many designers and young consumers are concerned about." Good products coupled with appropriate marketing and promotion will naturally win the market and consumers. recognized.
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05
"As a party member, you should be a person first and then do things."
——Fuzhou dealers Wang Linxin and Hu Xiaofen, Fuzhou dealers of Owen Lai plain ceramic tiles
Wang Linxin is an old friend of Owen Lai. It has been more than 19 years since he chose to represent Owen Lai in 2003. When Wang Linxin chose Overlay, he valued Overlay's strong product research and development capabilities and liked the "taste" of Overlay. Regarding today's Owen Lai, Wang Linxin said that his old friend is very pleased. Owen Lai has always been the Owen Lai of the past, and still has the same "flavor".
Wang Linxin and Hu Xiaofen are officially certified "five-star dealers" by Owen Lai and are also "communist members operating households" of Red Star Macalline Fujian No. 1 store. In the ceramic tile business, they always maintain an optimistic attitude. Hu Xiaofen said bluntly: "If the people are good and the products are good, we just make some money while making friends. In fact, the pressure of store management is not very high. In many cases, it is the pressure placed on ourselves. Because many businesses are You are referred by an old customer. If the customer trusts you, you cannot disappoint the customer. This aspect is quite stressful. ”
Because of this, Fuzhou Ouwen Lai's current performance mainly comes from retail. The engineering channel is mainly manufacturers, and the market share of distribution and assembly channels is not large. Like the four dealers interviewed by the investigation team, Wang Linxin also pointed out that the current profit margin of retail channels is indeed showing a downward trend compared with the past, but he is still confident about the future. His confidence stems from, on the one hand, the reputation he has gained from operating Owen Lai in Fuzhou for more than ten years; on the other hand, it comes from his confidence in Owen Lai's products. Hu Xiaofen hopes that manufacturers can provide more support in brand promotion. "Because the building materials market where we used to be has been demolished, and because there were no contact tools like WeChat before, it often happened that many old customers could not find us. In this regard, we still hope that manufacturers can have some support."
06
“Our next step is to integrate various categories and integrate resources.”
——Zheng Xiujin, Fuzhou dealer of Qianghui Seiko Ceramics
Jung Soo Kim officially signed a contract with Qiang Hui in March 2010. The reason for choosing Qianghui is very simple, that is, Qianghui's products meet market demand and also perform well in terms of brand awareness and influence.
The demolition of Fuzhou Southern Building Materials Market allowed Zheng Xiujin to move the store to Camellia Modern Home Building Materials Plaza. Behind this move is his next strategic plan to integrate various categories of Dajia and integrate resources. Camellia Modern Home Building Materials Plaza gathers various categories of large home furnishings, including mid-to-high-end brands in various industries such as electrical appliances, soft furnishings, wood industry, doors and windows. He hopes that through the joint efforts of various brands, the power of the entire home furnishing market can be gathered into a "fist" to occupy the market.
Behind this strategic plan is the business impact brought by the demolition of the southern building materials market: the demolition and replacement of the market resulted in the retention of only 80% of old customers and the loss of some customers; at a macro level, the Fuzhou building materials market is fragmented situation, competition pressure among stores has increased sharply.
07
“The improvement in consumer quality is a good thing for us.”
——Xiejin Ceramics Fuzhou dealer Chen Zhaofei
Chen Zhaofei is from Changle, Fuzhou. He has been in the industry for 24 years and has been an agent in Fuzhou for three years. According to him, the engineering channel accounts for 70% of his total business. Due to the great impact of finely decorated houses and real estate on dealers, he has reduced his number of stores from five in the past to one now. "The cost is already very high, but it keeps rising."
Amidst these rising costs, he feels that the increased labor costs due to higher consumer demands are well worth it. "The higher the quality of consumers and the more they know about the industry, the more transparent and standardized the industry will be in the end market. This is actually a good thing for our dealers," he said. The profit may not be as high as before, but it is more stable than before, and you will not be shot to death on the beach.”
He is very optimistic about the slate market, because slate is currently more widely accepted in the market. Many customers who buy ceramic tiles from him will use slate to some extent, but the price of slate is still slightly higher. Regarding whether you want your son to take over the family business, continueBeing engaged in the construction and ceramics industry, he believes that children should not be exposed to this industry since childhood. He has what he wants to do, so he just goes with it.
08
“The demolition of Southern Building Materials City is a good thing for me.”
——Fuzhou dealer Lin Juan of Hongtao Ceramics and Zhuoqi Slate Ceramics
Lin Juan is a native of Fuzhou. Unlike the above-mentioned dealers, she has mainly been engaged in ceramic tile wholesale business in the past ten years. Around 2015, her wholesale business reached its peak, with a warehouse of 1,500 square meters. But in the past five years, the warehouse area has dropped to 1,000 square meters.
Although the warehouse area is decreasing, Lin Juan's store area is constantly increasing. In other words, business is still good. In Sansan Building Materials Market, her store area reaches 1,200 square meters. In addition, the common problems of the previous dealers are also problems here. For example, the rent cost in Sansan Building Materials City is only 55 yuan/㎡, plus the maximum rent for warehousing is 35 yuan/㎡, which reaches 100,000 yuan in one month, and the clerk in her team has the lowest annual salary. It reached 60,000 yuan.
The relatively fragmented building materials market caused by the demolition of Southern Building Materials City is a good thing for the future; at the same time, the retail business is mainly referrals from old customers. Taking into account various conditions, despite the changing external market environment, wholesalers can still remain "unchanged".
09
"Our products are good and cost-effective. Why don't customers choose me?"
——Lin Xiucai, Fuzhou dealer of Qianhui slate tiles
Like Lin Juan, Lin Xiucai is in the wholesale business, and the two are siblings. Lin Xiucai is also a 16-year-old ceramics professional and mainly represents mid-to-high-end brands. After his introduction, the investigation team gained a new understanding of the ceramic tile wholesale business.
In recent years, although his total wholesale business has been declining, his retail business has been increasing. Taken together, his total business is still growing to a certain extent.growth. As for whether the wholesale business will decrease again in the future, he believes that it has hit the bottom now. Because, in the Fuzhou Ceramic Tile Wholesale Market, there were always more new people entering than old people exiting, but now only old people exit and few new people enter. Because the number of competitors has been decreasing, there is a high probability that his wholesale business will not decline again.
The growth of retail business mainly depends on Fuzhou consumers’ cognitive characteristics of the brand. "For them, apart from leading brands and imported brands such as Marco Polo, Dongpeng, Nobel, and Mona Lisa, there are only other brands." At the same time, the average house price in Fuzhou is 20,000-30,000 yuan/㎡, and consumption After purchasing a house, buyers will not have much budget for decoration, so they are more inclined to choose products with the highest price/performance ratio. "Whether it is our products or services, our price/performance ratio is the best. Customers come here through referrals, so why don't they choose me?"
Based on the views of dealers, the investigation team believes that as the industry reshuffle intensifies, in the Fuzhou home building materials market, market competition is likely to shift from competition among home building materials brands to competition among home building materials stores. Transfer; product research and development is still the core of the mission of ceramic manufacturers; consumers will become more rational and pursue cost-effectiveness.
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More effective information, more reliable data, and more people's opinions will be presented one by one in the China Ceramics Network's 2021 "Tao Xing China" National Tile Bathroom Market Survey [Fuzhou Station] publicity report!
(Author: Hong Xiaochun)
