At the beginning of each year, China household industry will almost blow up a “rise in price”. By the end of last year’s market policy, the market seemed to have appeared in the market at the end of last year. And this year whether the industry will be a general price, the incentive of price rise has become a special concern for the industry and consumers.
The reason for the price rise
In the new stage of economic development, the requirements for home building materials industry will be more stringent. To meet the requirements of production and to adapt to the market policy has become a necessary condition for the furniture manufacturing enterprises, at the same time, it will also accelerate the deep shuffling of the furniture industry.
“From February 1st this year, there will be a small increase in the price of 5%-8%.” Zhang Yan, general manager of TATA wooden doors, said that the increase is fairly stable compared with the past years, and the reasons for the price increase are mainly three aspects: the rising cost of raw materials, the increase of logistics cost and the adjustment and renewal of process equipment.
He Fajian, President of Beijing Furniture Industry Association, told reporters that as a resource intensive industry, the sustainable development of the household industry is usually closely related to the upstream raw materials. “Especially in recent years, prices of wood, steel, sponge, leather, adhesives, and hardware and other raw materials and packaging materials have risen all the way, and transportation costs have also climbed steadily.” He said that the continuous promotion of human cost has brought a direct impact on the furniture manufacturing industry. “In the market policy and the rise of the price of raw and auxiliary materials and other factors, Chinese furniture has entered the age of shuffling.” He said the furniture industry would have to face a series of upgrades and transitions.
Specifically, this year there is a shortage of timber, timber prices have increased 5%-10%; domestic wood-based panel price from 2015 all the way up, experienced a substantial price adjustment up to 4 times; the furniture leather, the biggest increase last year reached the highest point of 30%; textile fabrics increase is relatively small, is about 5-10%; the paint and adhesive prices also go up 5%-10%.
Will the cost of the rise be passed on to the consumer?
The increase in the price of the raw and auxiliary materials and the increase in the cost of transportation are the unlimited increase of the cost of each enterprise. In general, the consumer is more concerned about whether the cost of a firm’s rise will be passed on to itself from the price of the product.
“The current home industry is in the key period of transition to high value-added manufacturing and intelligent manufacturing, and it needs a strong capital accumulation to support it.” He said that although the profit margins of enterprises are smaller and the transformation is also facing severe challenges, if we can coordinate them reasonably and actively, we will largely eliminate the effects of price increases on businesses and consumers.
In fact, every year in December, the domestic clothing industry usually has a price rise. It is understood that many home improvement companies recently released the enterprise price adjustment letter, the existing products on the basis of the original price of a small increase, some product prices remain unchanged.
A decoration company official said: “the rising of price is inevitable, and all elements of the decoration sector are rising, so the price of home decoration products will naturally increase accordingly. But the real price adjustment will generally in late December and after the new year, for consumers, although the overall price is slightly improved, but the enterprise in the policy under the influence, will actively update and upgrade its own production equipment, the concept of environmental protection will be more applied to the products, so that consumers use in the process of home decoration products it will be more environmentally friendly and safe.
Insiders suggested a renovation plan for consumers to take time for “tertiary industry”, the first pay the deposit, locked in advance of the wood and furniture prices; at the same time, in the choice of brand, but also to choose the strength of the brand, it will be more secure in the subsequent construction, customer service service.
In addition to the price, consumers should also pay more attention to the supply period of furniture products. Affected by last year’s related policies, some enterprises also have a “pain point” in the supply period, and there are no lack of “money but lack of goods” in the market. “Last year, the production cycle of the new skin series products is 15 days, plus logistics time, general control in 25-35 days to the goods.” Zhang Yan, deputy general manager of TATA, said that although the supply cycle of the enterprise had been affected last year, it is now basically back on the right track.
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