Why the flooring industry suffered market downturn

With the highest rent, the least traffic, the greatest pressure, and the smallest revenue, 2014, which will end with the “four crimes” label, will undoubtedly become the most difficult year for the flooring building materials market. Many home builders even called it "the worst in ten years!" Many industry insiders conservatively estimate that due to changes in national policies and the general environment, the market may continue to decline next year. So why is the flooring industry able to meet the market's lowest level as the social economy continues to progress?

The downturn in the property market is the main reason;

According to the data released by the Guangzhou Municipal Development and Reform Commission on July 24, the average monthly turnover of first-hand houses in Guangzhou was less than 440,000 square meters in the first half of this year, which was the lowest level in the past decade. In the second half of the year, under the circumstances of price cuts by multiple developers, there was no significant improvement in transactions. According to the data of the Sunshine Homeland official website, in October 2014, a total of 7,222 first-hand homes were signed in Guangzhou, a decrease of 22.3% over the same period of last year.

Once the first-hand property market turnover hit new lows, this has greatly constrained the downstream floor and other home building materials retail market space, and in the past two years to become a number of furniture and building materials business and decoration company's main growth point of second-hand housing renovation business due to second-hand housing transactions Severe shrinkage led to a sharp drop in orders. According to the data released by the Guangzhou Municipal Bureau of Land and Housing Administration, in September 2014, the turnover of second-hand housing in Guangzhou decreased by 50.4% year-on-year. The double hit caused an increase in passenger and sales of home building materials.

Price rises are difficult to evade;

On the other hand, as prices continue to increase, the rental costs of home shopping malls also rise. The operating costs of flooring companies are soaring! The average price of Mahui home is about 220 yuan. The rent of Weijisi Square is also more than 200 yuan. The industry generally believes that JSWB Panyu store has the highest cost-effectiveness, with the rent at 150 yuan, and the high-end customers just need to be more concentrated. Mr. Yi, a veteran building material dealer who has been operating for 10 years in Guangzhou, admits to reporters that since he entered the wood flooring industry in 2004, he has represented 10 building materials brands. This year is the tenth year that he has been in the market, with the highest rent in the store, the least passenger flow, the greatest pressure, and the lowest income. One year.

Wang Weidong, general manager of Nature Flooring Guangzhou Branch, who has more than ten years of experience in the operation of the building materials market in Guangzhou, also expressed the same sentiment. Over the past decade, the demand for wood flooring products has continued to shrink, with fewer passengers and lower unit prices, due to the company’s large home furnishing strategy. Newly-launched wooden doors and wallpaper store performance were also unsatisfactory, increasing operating pressure.

Pressure from all sides is almost overwhelmingly pressured by traditional industries such as flooring, and under multiple pressures, the industry may emerge as a “turn off tide” in the future. Flooring companies need to be prepared to respond to future crises!