Ms. Dai Bei is the Chief Editor of Sina Home, Panel member of Beijing International Design week, Red Star Design Award and C Foundation; she is the Vice Secretary General of WGDO (World Green Design Organization), adviser and observer of Chinese home decoration industry and original furniture design.
Ms. Dai Bei, how is the Chinese furniture market evolving?
I think there may be greatest changes in the recent years, especially in financing and mergers & acquisitions. Some domestic manufacturers are now engaging in international joint ventures or in joint establishment of factories and brand cooperation. The latest M&A case, at the beginning of this year, is that the Chinese company Qumei merged and acquired a Norwegian brand in cash of RMB4 billion.
The Chinese furniture companies are recently starting overseas expansion: one of them has just begun to set up factories in Germany. In the process of globalization, I think this is a real start for Chinese companies and an obvious trend in the future.
Some international brands have also carried out mergers and acquisitions in the domestic channels. And M&A between domestic brands are also starting. Big brands are getting bigger, while SMEs fail to keep up with market changes. On the one hand, SMEs may disappear in the market, and on the other hand, they may be merged and acquired.
Some enterprises are listed due to capital investment and growing strong. Some competent enterprises are gradually expanding towards high end.
Besides, the boundaries of the furniture industry are not so obvious. This is another change in the domestic market: for example, if an enterprise specializes in solid wood furniture or cupboards, it can enter the whole home decor sector and concentrate on more categories.
These are some obvious trends in China over the past two years.
Which is the situation of the furniture distribution in China?
As for furniture and building materials malls, there are two giants in China: one is Red Star Macalline and the other one is Easyhome. The former has been listed and the latter is preparing for listing. As the two largest channels with the widest coverage in China, their business formats have undergone great changes. They have expanded from the furniture and building materials sectors to the home furnishing and lifestyle sectors. For example, they have also begun to engage in the cinemas and shopping malls, as well as nursing & kids’ furniture and other lifestyle products, which are related to the formats of the furniture malls.
There are some brands, similar to Qumei, that are used to focus on furniture sector only and are now expanding to engage in lifestyle products. And so does Kuka: their stores have also changed the original furniture sales methods or the user experience. Some lifestyle-related elements such as café may be added to the stores. It is a great change.
Red Star Macalline Group is the largest national home improvement and furniture retail platform in China, which operates now more than 200 malls in all the major Chinese cities
How do you see the trends in Chinese furniture design?
I think furniture can be customized. Recently, there may be more discussions about the relationship between customization and finished products. Some people even say that customization may become a standard in the future, but the understandings on this concept may differ. Some enterprises have expanded from making the cupboards and wardrobes to offering customized furniture solutions. This is a new orientation.
I know there are a number of companies that make furniture, but they are also offering modular furniture based on the standard production mode in the industry. It is also a small-scale customization mode. This is what some enterprises are aiming at, including IKEA that is trying to do in this orientation.
From the perspective of the dimensions in the design field, Chinese architectural designers are going in the direction of interior design, and the interior designers are focusing on product design. From an industry perspective, they are changing.
Customized solutions proposed by the Chinese furniture brands are one of the main trends seen during the last editions of CIFF in Shanghai and in Guangzhou
Which is now the role of designers?
Some local Chinese designers, in particular interior and product designers, actually grow relatively fast and have surpassed the previous generation. There are a lot of young and middle-aged product designers and interior designers that have received many international awards. They do a good job and are well received. The creative Chinese designs also keep improving. In fact, it is a good opportunity for them: I think they can pay more attention to China's creative design as well as furniture design and interior design. Now more Chinese young and middle-aged designers are beginning to rise, and their abilities are as good as those of the famous designers including Steve Leung. I think they can pay more attention to the generation of young and middle-aged designers.
Steve Leung Group. One Park Shanghai II project
Design brands are growing in China. Which is your point of view?
Some design brands have started to develop in China, so they are entering the mainstream sales channels, such as Maxmarko, Domienature, Duoshao, and some younger brands including Bentudesign, Ziinlife and MZGF. These brands focus on the Post-60s and Post-70s. The owners and the designers have international background: they studied design abroad and then start a business in China for design.
From the perspective of design brands, the domestic design institutions have also begun to participate in mergers and acquisitions. As far as I know, in early July, Steve Leung’s company will be listed in Hong Kong. A Shenzhen-based design company, Jiang Feng Design Company was China’s first listed design company. Regardless of any industry chain, manufacturing, design or channel, we are in a wave of capital. In fact, it is changing and advancing faster as a whole.
Maxmarko by Derek Chen
Jiang Feng Group. Anlu Zhujiajiao Hotel project