With the global scarcity of resources and a sharp rise in raw material prices, the cost of furniture—being a resource-intensive product—is bound to increase. At the same time, the appreciation of the renminbi and the reduction in export tax rebates for enterprises categorized as “high pollution, high energy consumption, and capital-intensive†have intensified competition within the domestic furniture industry, which once had significant growth potential.
**Market Demand Struggles to Keep Up with Rising Costs**
The price of wood has surged dramatically, while labor, transportation, and decorative paper costs have remained relatively stable. However, the overall market's ability to absorb these rising prices is lagging behind the rapid increase in raw material costs. Compared to previous years, sales this year have been significantly lower.
Furniture prices are now increasing every few months—or even every one or two months. A veteran in the furniture industry shared, “Even the monthly delivery price changes, and the factory only tells you about the price hikes without explaining the reasons. Eventually, I just stopped asking.†Despite the pressure, sellers are hesitant to raise prices due to fierce competition. Many are forced to accept lower profits. From the consumer perspective, buyers are becoming more rational, and traditional price promotions no longer hold the same appeal. Additionally, with the influence of national policies, many brands that once focused on the international market are now shifting their attention to the domestic sector, intensifying brand competition. As a result, marketing costs continue to rise, and traditional business models are under severe pressure.
**Brand Segmentation Shapes a New Market Landscape**
As the business model becomes more competitive, how can companies achieve sustainable growth? A long-time furniture dealer noted, “Each brand is becoming more grounded, no longer relying on abstract concepts. Store images are being updated, and after-sales service is gradually improving. These changes show that brands are focusing on building deeper brand value, making their identities more distinct. The stronger each brand’s personality, the more targeted its customer base becomes. Consumers with specific needs will naturally gravitate toward brands that align with their preferences. As a result, the furniture market won’t be dominated by one trend, such as anti-bacterial features, but will instead reflect diverse choices.â€
Brand integration, capital operations, and more active corporate alliances are key trends in the furniture industry this year. The industry is undergoing a major reshuffle, and competition will force brands to segment their markets, leading to a new pattern of brand differentiation.
**The Future: An Era of Competition and Cooperation**
Next year’s market will be highly competitive, driven by rising oil and production material prices, as well as an influx of new stores, products, and brands. The era of both competition and integration has arrived. Experts suggest that due to resource shortages and policy impacts, furniture prices are expected to continue rising. Industry insiders emphasize that competition is an inevitable part of market development, and the future will be defined by coexistence between competition and cooperation.
Competition and collaboration manifest in various ways. For furniture companies, it’s essential to define clear market, customer, and brand positioning, build a unique brand identity, enhance competitiveness, and expand market share. Moreover, the future market will demand cooperation among related companies, enabling them to enter the market collectively. This means brands must learn to share benefits, leverage resource integration, form cross-industry alliances, complement each other’s strengths, and drive group operations. By innovating profit models, alliance members can maximize mutual value and achieve a win-win outcome.
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