Chinese Market
Country information
- Surface (kmq): 9,527,900
- Inhabitants (mln 2018): 1,393.0
- Capital city: Beijing
- Language: Chinese
- Currency: CNY
- Time zone: GMT + 8 h
- PIL (bln $, 2018): 13,608
- PIL growth (2018): +3%
Source: World Bank Group
Market information
The Chinese home and garden market continued to grow in 2019, but saw its rate of expansion slowed by the negative impact of a sluggish property market and new furnished housing policies.
These factors had a particularly marked effect on the home improvement category, which experienced a notable reversal in its fortunes during the year.
Nonetheless, continued growth resulted from Chinese consumers’ ongoing tendency to replace existing items more often, which is going hand-in-hand with an upmarket trend in demand.
A growing consumer emphasis on aesthetics in purchasing decisions is supporting this upmarket shift in demand, as well as the increasing influence of rising consumer health-awareness and eco-consciousness.
Moreover, the premiumisation trend is being spurred by manufacturers’ efforts to develop products and services that are more compatible with evolving demand trends, and to market them accordingly.
The Chinese home and garden market is forecast to see continued growth over 2019-2024, albeit at a slower pace than that seen over the review period.
Growth will be supported by the ongoing upmarket shift in demand across a range of categories.
This will be underpinned by the further development of trends towards health-awareness, eco-consciousness, convenience and aesthetic designs, which manufacturers will encourage through the development of an ever wider range of higher-end products, such as decoration products utilising natural materials.
Smart home and garden products are also expected to gain in prominence, supported by the roll out of the 5G network and increasing consumer familiarity with the concept of the smart home.
However, furnished housing policies are set to continue to act as a constraint on growth in home improvement, in particular, taking potential sales out of retail and encouraging manufacturers to court business customers during the forecast period.
As well as health, environmental and aesthetic considerations, demand for convenience is exerting an ever stronger influence on purchasing decisions in the Chinese home and garden market.
This element of demand came to the fore in 2019 in the form of the growing focus on one-stop shop solutions, which appealed to the rising number of consumers experiencing time pressures as a result of hectic work and social schedules.
The increasing demand for convenient, one-stop shop solutions led home and garden manufacturers to move beyond simply expanding into adjacent product categories and seek to enter a diverse range of compatible areas.
This led to alliances with partners such as decoration companies, as players worked to provide all-embracing home and garden solutions.
The major home and garden brands, Oppein and GoldenHome, illustrated the trend towards providing more extensive, convenient solutions for busy consumers by entering consumer appliances.
The motivation for cross-category development is being further enhanced by the emergence of connectivity and the development of integrated smart products.
This was a notable feature of the home and garden market at the end of the review period, illustrated by the introduction of smart gardening products and smart thermal bottles, as well as the robust growth of smart lighting.
Store-based home and garden specialist retailers continued to dominate home and garden value sales in 2019.
However, e-commerce saw its influence increase rapidly throughout the review period, and maintained strong growth in 2019.
The channel remains a strong focus for industry players, both large and small.
Indeed, e-commerce has provided new brands with an economical way to enter the market and contributed to the diversification of the offer in a range of categories.
At the same time, the increasing importance of e-commerce is encouraging store-based retailers to develop their own online activity and adopt multi-channel approaches that often involve consumers experiencing products first-hand in-store before purchasing them online.
This is, in turn, leading to a shift in the role of stores - further magnifying store operators’ emphasis on the consumer experience, and blurring the boundaries between online and store-based activity.
Contents courtesy from Euromonitor International Ltd, read more at: www.euromonitor.com.
