Long-term: custom home penetration rate increase, leading multi-dimensional building barriers
(1) The rate of urbanization is still lower than that of developed countries, and the increase in disposable income of residents promotes the demand for furniture consumption.
In recent years, China’s urbanization process has been accelerating. According to the National Bureau of Statistics, the urbanization rate has increased from 10.64% in 1949 to 58.52% in 2017, and according to the National Population Development Plan (2016-2030), to 2030. In the year, China’s urbanization rate will reach 70%. Although the pace of urbanization in China is accelerating, compared with international developed countries, according to data from the World Bank and the National Bureau of Statistics, the level of urbanization in China in 2017 is much lower than that in the United States (82%), the European Union (75%), and Japan (92%). South Korea (82%), and the level of urbanization in China in 2017 is lower than that of the United States, the European Union, and Japan in 1960. There is still room for improvement in China’s urbanization. The increase in the urban population, especially the increase in the number of newly-married people, has led to strong demand for new homes, and the demand for furniture products after the purchase of new homes has gradually increased, helping to promote the overall development of the Chinese furniture industry.
Secondly, with the continuous development of China’s economy, the living standards and cultural level of urban residents have been continuously improved. The per capita disposable income and consumption expenditure of urban residents have also gradually increased. According to the National Bureau of Statistics, the per capita disposable income of urban residents in China has reached 105,000 yuan from 2005. It rose to 39,300 yuan in 2018, with a compound annual growth rate of 10.68%; the per capita consumption expenditure of urban residents rose from 0.79 million yuan in 2005 to 26,100 yuan in 2018, with a compound annual growth rate of 9.59%. The per capita income of urban residents has increased, and the demand for living conditions has improved. The consumption expenditure for housing has increased from 808.66 yuan in 2005 to 6,255.00 yuan in 2018, and the compound annual growth rate is 17.04%. The growth rate is higher than per capita disposable income. And per capita consumption expenditure. The increase in per capita income has effectively increased consumers’ ability to accept custom home prices and promoted the consumption needs of the furniture industry, especially branded furniture.
(2) After 80 and 90, pay more attention to the independent design of the home environment and improve the overall home penetration rate.
Customized furniture is more personalized than traditional finished furniture and hand-made furniture. The design is tailor-made and fashionable. The design of “tailor-made” is limited to solve the problem of space utilization such as small room type and irregular room type, and at the same time customize the personalized service of home and intimate. Flexible time schedule enhances customer engagement and service communication efficiency.
Custom furniture takes into account the practicality and space utilization and fully meets the individual needs of consumers. With the promotion of urbanization and the increase in per capita disposable income, the penetration rate of customized home furnishing industry continues to increase. According to Prospective Industrial Research Institute, China At present, the penetration rate of the overall custom furniture in the household industry is 30%. Compared with the penetration rate of 60-70% in the developed countries such as the United States and South Korea, it is still at a relatively low level and there is still room for improvement. In terms of classification, due to different development time and market acceptance, the penetration rate is different. The overall penetration rate of the overall cabinet industry is about 60%. The custom wardrobe has been rapidly increasing in the market in recent years. The penetration rate is currently around 30%; while other cabinets are still in the lead-in period, with a penetration rate of less than 10%.
According to iResearch, among the people who have renovated or purchased homes in the past two years, the proportion of custom homes purchased after 70, 80, and 90 is 47.3%, 62%, and 74.7%, respectively, and the proportion after 80 and 90 is relatively high. After the 1980s, there are two children just needed, and the demand for housing improvement is strong. After 90, it is in the stage of marriage and childbirth. It is a generation that is about to grow up and become a family. It pursues individuality and brand and is not willing to spend too much energy on price comparison. After 80 and 90, in the choice of furniture products, more attention to brand, intelligence, customization, environmental protection, quality, and other factors, the independent design awareness of participating in the home environment is also increasing, laying a good foundation for the rapid development of the overall home industry, customized Furniture penetration is expected to increase further. In terms of cities, the penetration rate of custom homes in first-tier cities is relatively high. According to iResearch, the proportion of purchased household products in the first-tier cities after 70, 80, and 90 is more than 60%, and the second and third lines are relatively low. There is still a lot of room for improvement.