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Home Retailing - China - December 2018

“Consumers in China are more willing to decorate and upgrade their home. They have become more generous on budget and are seeking a balance of functions and styles. The demands of the home retail market will shift from renovating new housing property to upgrading ‘old’ ones. It will be crucial for retailers/brands to act with strategies such as streamlining the distribution, making the products multifunctional and multi-scaling the business to win over more market share.”

– Jaslien Chen, Senior Analyst

This report examines the following issues:

  • Retailers need to be more approachable online and offline
  • Consumers care more for lifestyle brought by brands than prices
  • Extra functions on home retail products will become essential

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Excluded
          • Sub-group definitions
          • Executive Summary

              • The market
                • Figure 1: Best- and worst-case forecast of total furniture market value, China, 2013-23
              • Companies and brands
                • Figure 2: Market share of top 10 furniture brands/manufacturers, China, 2013-17
              • The consumer
                • Consumers are active in decorating their home
                  • Figure 3: Attitudes towards home decoration and home retail products, August 2018
                • Essential homeware items are the most purchased home retail products
                  • Figure 4: Home retail products purchased in the last 12 months, August 2018
                • Functionality or emotional need, what drives consumers to buy?
                  • Figure 5: Reasons to purchase home retail products, August 2018
                • Functionality comes before appearance
                  • Figure 6: Top three factors influencing choices of different home retail products, August 2018
                • Online channels outshine different offline channels
                  • Figure 7: Purchase channel for home retail products, August 2018
                • Consumers like to get information from offline and online
                  • Figure 8: Source of information for home retail products, August 2018
                • What we think
                • Issues and Insights

                  • Retailers need to be more approachable online and offline
                    • The facts
                      • The implications
                        • Consumers care more for lifestyle brought by brands than prices
                          • The facts
                            • The implications
                              • Extra functions on home retail products will become essential
                                • The facts
                                  • The implications
                                    • Figure 9: OOO My Design’s Shy chair set
                                • The Market – What You Need to Know

                                  • Challenges brought by control on real estate and environmental regulations
                                    • Upgrade in consumers’ needs will empower the market again
                                      • Transformation in business brought by digitisation
                                      • Market Size and Forecast

                                        • 2018 is a challenging year
                                          • Figure 10: Total sales, wholesale and retail sales of the furniture market, China 2013-18
                                        • Market will suffer for few more years but still has potential to rebound
                                          • Figure 11: Best- and worst-case forecast of total furniture market value, China, 2013-23
                                      • Market Factors

                                        • Government control on real estate and on environmental issue
                                          • Consumers’ upgraded needs on home decorating will empower the growth of market
                                            • Figure 12: Attitudes towards home and home decoration, August 2018
                                          • New capitals starts to push transformations in home retailing
                                          • Key Players – What You Need to Know

                                            • Local retailers/brands are dominating the market
                                              • Fully assembled products are still the main stream though customised products are uprising
                                                • Distribution is getting streamlined as well as multichannel
                                                  • Innovations are brought by technologies and reformation in distribution
                                                  • Market Share

                                                    • Fully assembled furniture brands are leading the home retail market
                                                      • Figure 13: Best- and worst-case forecast of retail furniture market value, China, 2013-23
                                                      • Figure 14: Market share of retail sales value of top 10 furniture companies, China, 2013-17
                                                  • Competitive Strategies

                                                    • Home retail business is streamlined by digitisation
                                                      • Figure 15: Purchase channel for home retail products, August 2018
                                                    • Emphasis on lifestyle instead of functionality itself
                                                      • Increase customer touch points at different consumption scenarios
                                                        • Figure 16: Shangpin collection store in Shanghai, 2018
                                                      • Customisation can be affordable
                                                        • Leverage young consumers’ desire for sharing
                                                          • New marketing strategies move towards home retail
                                                          • Who’s Innovating?

                                                            • VR/AR assist home décor
                                                              • Figure 17: Placing IKEA virtually via IKEA Place in real environment, 2018
                                                            • Well suited for different living scenarios
                                                              • Figure 18: Bene’s Work and Life table piece
                                                            • Bringing your home living elsewhere
                                                              • Figure 19: MUJI hotel’s room
                                                            • A more eco-friendly home
                                                              • Figure 20: EcoQube greenhouse set, 2018
                                                          • The Consumer – What You Need to Know

                                                            • Consumers like to decorate home and to buy home retail products
                                                              • E-commerce channels are most popular
                                                                • Consumers are purchasing for both functional and emotional reasons
                                                                  • Function factors drive choices
                                                                  • Attitudes towards Home Decoration and Home Retail Products

                                                                    • Home reflects personality and style
                                                                      • Figure 21: Perception of the importance of home decoration, August 2018
                                                                    • Home should be multifunctional
                                                                      • Figure 22: Attitudes towards home functions, August 2018
                                                                    • Continuous willingness to spend on decorating home
                                                                      • Figure 23: Attitudes towards keeping informed of and purchasing home retail products, August 2018
                                                                      • Figure 24: Attitudes towards purchasing and updating home retail products, by family status, August 2018
                                                                  • Home Retail Products Bought

                                                                    • Essential homeware items are more welcome than decorative ones
                                                                      • Figure 25: Home retail products purchased in the last 12 months, August 2018
                                                                    • Consumers aged 20-24 are least likely to buy kitchenware
                                                                      • Figure 26: Kitchenware purchased in the last 12 months, by age, August 2018
                                                                    • Decorative homeware items are popular among 80s and 90s consumers
                                                                      • Figure 27: Home air fresheners and home decoration products purchased in the last 12 months, by generation, August 2018
                                                                    • Household population determines purchase incidence for furniture
                                                                      • Figure 28: Furniture purchased in the last 12 months, by demographics, August 2018
                                                                  • Factors Influencing Choices of Home Retail Products

                                                                    • Consumers consider functionality of home retail products first
                                                                      • Figure 29: Top three factors influencing choices of different home retail products, August 2018
                                                                    • Consumers aged 20-24 care about design of furniture mostly
                                                                      • Figure 30: “Good-looking design” as a factor influencing choice of furniture, by age, August 2018
                                                                    • Natural materials are important for household linens
                                                                      • Brand name would affect more choices for essential home items
                                                                        • Figure 31: “Brand” as a factor influencing choice of kitchenware, by demographics, August 2018
                                                                      • Eco-friendly factor is effective enhancer for decorative homeware choice
                                                                        • Figure 32: “Eco-friendly” as a factor influencing choices of decorative homeware items (home decoration products and air fresheners), by age, August, 2018
                                                                    • Reasons to Purchase

                                                                      • Purchasing home products is a functional and emotional decision
                                                                        • Figure 33: Reasons to purchase home retail products, August 2018
                                                                        • Figure 34: Reasons to purchase home retail products, by age, August 2018
                                                                      • Consumers aged 30-49 purchase mainly for upgrade existing product
                                                                        • Figure 35: “Renewing items with upgraded features” as a reason to purchase, by age, August 2018
                                                                      • 20-24-year-olds buy home retail products for basic function
                                                                        • Figure 36: “Replace worn-out/broken items” as a reason to purchase, by age, August 2018
                                                                        • Figure 37: “Make home premium and luxurious” and “keep up with latest fashions” as reasons to purchase, by age, August 2018
                                                                      • Post-80s and post-90s contradict on personal styles and limits through living situations
                                                                        • Figure 38: Housing situation of consumers, by generation, August 2018
                                                                    • Purchase Channels

                                                                      • Welcome to the era of e-commerce
                                                                        • Figure 39: Purchase channel for home retail products, August 2018
                                                                        • Figure 40: E-commerce and supermarkets/hypermarkets as purchase channel for home retail products, by age, August 2018
                                                                      • Stores specialising in home retail are less competitive
                                                                        • Figure 41: Different channels used for purchasing furniture, August 2018
                                                                      • Fast fashion retailers have their best chance in decorative homeware
                                                                        • Figure 42: Decorative home retail products purchased cross-channels and at fast fashion retailers, August 2018
                                                                      • Variety stores are favoured by female consumers under 30
                                                                      • Sources of Information

                                                                        • Consumers use both offline and online sources for ideas and inspirations
                                                                          • Figure 43: Source of information for home retail products, August 2018
                                                                        • Consumers with higher income would like to get information from more sources
                                                                          • Figure 44: Repertoire analysis of information sources, by household income level, August 2018
                                                                        • Lifestyle content impacts consumers aged 25-29 most
                                                                          • Figure 45: Lifestyle content as information for home retail products, by age, August 2018
                                                                      • Meet the Mintropolitans

                                                                        • Mintropolitans enjoy lifestyle content more
                                                                          • Figure 46: Selected source of information for home retail products, by consumer classification, August 2018
                                                                        • Mintropolitans seek more eco-friendly home retail products
                                                                          • Figure 47: Selected factors influencing choices home retail products – eco-friendly, by consumer classification, August 2018
                                                                      • Appendix – Market Segmentation

                                                                          • Figure 48: Total value sales of home retail market, by segment, China, 2013-23
                                                                      • Appendix – Methodology and Abbreviations

                                                                        • Methodology
                                                                          • Fan chart forecast
                                                                            • Abbreviations

                                                                            Home Retailing - China - December 2018

                                                                            US $4,460.00 (Excl.Tax)