The price increase of raw materials occurs every year, and the price increase of raw
materials in 2020 will have a particularly strong impact on small and micro furniture factories.
Since the National Day, the topic of "price increase of raw materials" has not diminished. With the coming of the next "Double 11" and New Year's Day furniture consumption season, orders for finished products will grow, and the raw material market is in short supply. "Price increase" is expected to become the main theme of the entire fourth quarter.
The price increase effect spreads to the terminal
It has been almost a month since the National Day raw material price increase. We found that in addition to many raw material price increase letters, there have also been price increase letters and price increase announcements from finished furniture factories: Chivas announced that the increase will start on October 9th. price. However, compared with Chivas’s price positioning, for its target consumer groups, announcing price increases may be more of a marketing tool, which has little effect on consumers. Another example is a furniture company that produces massage chairs in Shunde, which is based on the original price. Increase 80-100 yuan/unit. The main consumer groups of massage chairs are corporate orders and engineering orders, with relatively few individual consumers; Tangfeng Hanyunmu Space also announced a price increase. The brand belongs to a niche designer brand, and consumers are relatively high-end; custom furniture brands have increased with “new products”. "Price", the launch of aldehyde-free sheet products, the price of aldehyde-free sheet products is higher than that of ordinary sheet products.
From the raw material market to the terminal consumer market, the first wave of finished products companies that announced price increases have the following attributes: they are mainly engaged in engineering orders, originally positioned at high-end, and launched new products. Their price increases are either not too obvious to mass consumers, or acceptable to mass consumers.
Generally speaking, from the upstream raw material factory to the downstream finished product manufacturing factory, and then to the end consumer market, the influence caused by the rising tide of raw material prices is gradually diminishing.
When facing consumers, furniture manufacturing factories usually do not increase prices in a particularly obvious and naked way, but will use other means to absorb the pressure of upstream raw material prices.
Common ways are: ①Improve the efficiency of production and manufacturing with automation and intelligentization and reduce labor; ②Optimize the management system of internal R&D, production, and sales, strengthen cultural cohesion, strengthen training and other soft forces to drive development; ③ Increase cooperation with suppliers to obtain the original price of raw materials or even lower prices through the "quantity-for-price" method; ④Adjust the original product price system to maintain the original price of the product in the market or it is not easy for a small range Perceived price fluctuations; ⑤Introduce new products and raise prices for new products by a certain range.
In short, most furniture manufacturers will choose to digest themselves or deal with price increases in a relatively mild manner. This is why the prices of raw materials increase year after year, but consumers do not actually feel strongly when buying furniture in the market.
The price hike has a big impact on small and micro enterprises
There is a high probability that the price increase will spread to the end of 2020. Under the circumstance that product prices cannot be directly increased significantly, they are facing increasingly cruel market competition. Many small and micro enterprises will have less and less living space. Can they afford it? After "winter", it is an unknown number for many small furniture factories.
Changes in the external environment may be opportunities for large-scale enterprises.
On October 19, China’s economic heavyweight data was announced: GDP in the first three quarters was 7,22786 billion yuan, a year-on-year increase of 0.7%, and an increase of 4.9% in the third quarter. On this basis, analyzing the actual sales and future sales of the upstream real estate in the home furnishing industry, and the relevant data on the purchasing power of residents, it will be seen that the future growth is still positive. Judging from the sales data released by some large-scale enterprises, the growth performance in the third quarter is also very impressive. Therefore, for these furniture companies, "open source" must be placed in front of "throttling". As long as the number of orders continues to flow, even the recent decline in profits will not affect the development of the company.
2020 is difficult, but there is no shortage of companies preparing to go public like Mousse, ready to achieve leapfrog development.
Under the tide of price hikes, the concentration of furniture brands may continue to increase, and small factories are under pressure to survive. At the same time, large-scale factories continue to improve.
The threshold of the furniture business will be higher and higher, and furniture companies will evolve toward more and more intelligent and more innovative.
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