China’s kitchen appliances market has expanded considerably over recent years. According to mainland market surveys, the total value of China’s kitchen furniture market exceeded RMB96 billion in 2017. In the long run, urbanization is expected to drive steady expansion in the kitchen appliance industry. As of 2017, China’s urbanization rate stood at 58.5% and is projected to rise by about one percentage point annually. Advances in urbanization, the real estate market, and smart home appliances are all seen as conducive to the development of the kitchen appliance market.
As consumers’ brand awareness continues to heighten, more emphasis is being placed on product design, functions, and features, while price sensitivity is falling. Medium to high-end products is becoming the mainstay of the consumer market, while the demand for eco-friendly and energy-efficient kitchen appliances is also growing as consumer environmental awareness increases.
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Imported kitchen market in China: Chinese people want more design
More and more people spend their money on enjoyment centric consumption or improvement centric consumption. The China Furniture Association released the “2018 China Furniture Industry Information Report.” Data show that China’s furniture imports totaled US$3.052 billion in 2017, a year-on-year increase of 15.65%, and furniture imports hit a new high in nearly a decade. So under this background, it is highly positive that imported-furniture consumption will keep a positive development.
The furniture industry, and so the kitchen too, have a highly separated structure, according to the survey, industry giant such as IKEA has only 3% market share globally, not to mention the situation in China where a major part of market share belongs to Chinese native brand. So in face of Chinese market where the market margin is still very high for high-end imported furniture, how should a foreign furniture brand take the first step to the Chinese market?
Learn from IKEA
IKEA is known globally for its low prices and innovative designed furniture. In China, however, it faced peculiar problems. Its low-price strategy created confusion among Chinese consumers while local competitors copied its designs. IKEA identified the strategic challenges and made attempts to overcome them. One of the main problems for IKEA was that its prices, considered low in Europe and North America, were higher than the average in China. Since 2000, IKEA has cut its prices by more than 60 percent.
IKEA also had to tweak its marketing strategy. In most markets, the company uses its product catalog as a major marketing tool. In China, however, the catalog provided opportunities for competitors to imitate the company’s products. Instead, the company is using Chinese social media and micro-blogging website Weibo to target the urban youth.
How to Manage a Successful marketing Strategy in China?
Therefore, business in China involves a lot of hard work and awareness of consumer behavior. If you find yourself weak in understanding consumer expectations, professional marketers can be of great use. In the field of kitchen furniture business too, the owner has to have a complete arsenal at the disposal to score big market share. Here is what a kitchen furniture business owner in China needs to have for meeting the promotion objectives.
French furniture brand “Ligne Roset ” has reduced 25% and 15% of its price in the Chinese market both in 2015 and 2016. Norwegian brand “Stressless” has already set its price in the Chinese market the same as it in Europe. Some imported brands have even set their price in the Chinese market lower than those in Japanese and Singapore market to attract Chinese consumers.
Indeed, Chinese consumers, with their increasing horizons, are more and more reasonable. Imported goods are no longer something untouchable. Consumers pay more and more attention to the design and quality instead of the price tag. It is true that in the first period, when imported furniture was still something new and was being worshiped like an idol in the shrine, consumers with limited knowledge of consumers only pursue high price and a distorted imported-furniture market was born under this consuming behavior the purchase raised the price and the raised price impel continuously the consumer. But this has changed dramatically these years. With the development of the native brand and more reconnaissance of quality, Chinese consumer needs no more to “worship” imported brand blindly. So Italian brand need to consider their consumer first and set the strategy of its pricing more carefully
Online presence: Cost-effective Campaign
Internet usage is exceptionally common in China. The owner of any business in China, including the furniture specialist, should have an online venture to reach to a humongous chunk of the audience. To gain more visibility online, thus, one should have SEO specialist hired. Also, the business owner can take the audience to online tour to the manufacturing unit to gain more trust and credibility, giving you better chances of scoring more sales ultimately.
High Quality website
The online presence of kitchen appliances starts with the building of a web property like a website or mobile application. Therefore, any web application or website developed should be responsive in nature. This way it becomes easy to tap the large consumer base active on mobile phones and tablets.
Take part of Chinese E-commerce
In the last 10 years, China has made its way to have the most developed e-commerce industry in the world. Main e-commerce platform such as Tmall and JD.COM is no doubt an efficient and economical portal for a foreign furniture brand to expand its brand influence, improve its brand awareness, accumulate its customer base hence develop its business in Chinese market. According to sales report from Alibaba, only in “11.11” one day, the most influential shopping festival in China, the sale from top 5 furniture brands account for 10% of total sale of all brands that participated the event. With these general e-commerce platforms such as Tmall and JD.com, one can definitely approach the Chinese market with a limited risk now.
Not only limited to big shopping platform, foreign brands who want to have a share in Chinese market can also cooperate with specialized online furniture selling platform such as ITALYCLASSICO that has a good reputation with real estate developers. Cooperation with real estate developers means a chance to be the furniture supplier for luxury real estate project. Most developers also believe that using imported furniture is more attractive to consumers.
Social media accounts make the difference
Approaching the Chinese market using these platforms can be a “hard bone” for the communication barrier and the ever-changing commercial policies in China. It is hard for a foreign brand also in that the digital marketing tools are totally different from those in the Western world. The disappearance of Google, Facebook and Instagram can make brand communication an impossible mission for a “new” company which has definitely no idea what’s going on in China. So finding a good business partner that knows the digital approach to Chinese can be fundamental for the business strategy you may choose.
To fathom the online world further, the furniture business enterprise in China should be active on the social media networks too. Posting the latest product’s information creatively, launching promotional events and giving information about them on social media accounts are some furniture business can try to reach to the consumers.
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Chinese Kitchen Furniture market has a bright future, and you can take part of this big adventure. Let us help you to become the new IKEA in China and get your ROI shortly.