China’s housing market and the rapidly developing economy have resulted in growth in the furniture store industry.
In the five years through 2013, the furniture store industry in China has been growing at an annualised rate of 23.2 per cent to $16.7 billion, says IBISWorld.
The industry has a low concentration level, with the top four firms – Ikea, Yuexing Group, Kinhom Group and Shenzen HoBa Home Furnishings – accounting for an estimated 19.9 per cent of industry revenue in 2013.
The concentration level is expected to increase in future years, as major players have greater funds to expand their sales networks, says IBISWorld.
A new store type, called furniture supermarkets or malls, has developed in recent years in China. Furniture supermarket operators build large-scale business buildings that are rented to small, low-end furniture retailers to display their products as they do in independent stores.
Resource management systems adopted by high-end firms will be employed by furniture supermarkets to more efficiently manage the entry and exit of retailers and compete more effectively with high-end retailers, says IBISWorld.
Demand for high quality furniture is increasing in China as income levels increase and China’s middle class expands. With booming e-commerce in China, online furniture stores have also been developing fast, says IBISWorld.
