China's Bedroom Furniture Makers Keep Growing with Branding

Focusing on R&D is a shared strategy among makers

Mirroring the steaming growths in the luxury goods and new car segments in China, the nation's furniture industry has recorded average year-on-year growth of 22.2% in the last 30 years, turning China into the world's largest furniture manufacturing base with annual output accounting for about one-fourth of global volume, with reports of China's furniture output to very likely reach 2.4 trillion renminbi (RMB) or about US$343 billion by 2015.

China's bedroom furniture market was sluggish in the first two months of 2011, but posted sharp annual growth of 51.6% in the third month, then slowed in the following two months, regained strength in June, July and August, to decline again by 33.3% in September, according to online statistics on the furniture sector in China.

Cao Hongfu, director of China Furniture Committee and also the brand operation director of Foshan Junye Furniture Development Co., Ltd., says that China's furniture industry has grown over the past three decades from fledgling to nearly mature, but will not fully mature until 2015.

China's furniture makers cluster in several well-developed areas, including the Pearl River delta in the south, the central Yangtze River delta, and northeastern interior Bohai region.

Lion's Share
A reliable source discloses that manufacturers on the Pearl River delta, mainly in Guangdong Province, produce the lion's share of about 50% of the nation's total furniture output, and those on the Yangtze River delta, mainly in Zhejiang Province, accounts for 15%, while those in the Bohai area, northeastern China, and inland Sichuan, turn out 8-10%, 15% and 10%, respectively.

Taking a similar path as many evolving manufacturing industries, most of China's furniture makers initially filled OEM orders for overseas clients, then gradually upgraded to turn out ODM products to supply markets both at home and abroad.

Despite China being the largest furniture manufacturing hub globally, Cao points out that the nation's furniture still can't hold a candle to international brands in terms of design and price, mainly due to not having yet built high-profile reputation.

The Chinese authorities' credit tightening policies to cool the overheated realty market have had an undesirable ripple effect recently on the nation's small- and medium-sized enterprises as furniture makers, who have a tougher time arranging financing with banks. The furniture business has been further impacted by the uncertain global economic outlook, particularly in 2011 with the European debt crisis, still anemic growth of the U.S. economy, not to mention soaring manufacturing cost due to ballooning wages and prices of raw materials at home, Cao says.

To cope with more challenging times, many export-driven furniture manufacturers in China have either downsized operations or pumped more capital into R&D and streamlined manufacturing processes and management to enhance efficiency. Generally, many furniture manufacturers in China survived with thinner profits last year but expect a better business climate this year.

Cao emphasizes that transformation and improvement are key to staying competitive, which is achieved by solidifying R&D and encouraging employees to innovate and be creative.

Foshan Junye
Founded in 1995 in Foshan, Guangdong, Foshan Junye makes and sells solid wood furniture as well as being a solution provider. “We market products globally and also offer packaged service to clients at home. Most of our furniture are officially certified at home and abroad; while our company has been chosen as a top-10 furniture brand in China,” says Cao.

“Forshan Junye has consistently emphasized R&D over the past 16 years, sparing no effort to enhance product quality. We have established a strong R&D team and brand operating center as the backbone of our OBM (original brand manufacturing) that turns out high-end products for clients in China and many countries globally,” notes Ding Quanzhi, the general manager.

“The branding center is in charge of product design, improvement of manufacturing technologies, and building marketing channels. Our staff-friendly management helps to groom conscientious, efficient and skilled workers, and we offer in-house training and outside learning to upgrade skills, as well as leisure activities and sightseeing tours as perks,” says Ding.

Foshan Lixing Furniture
With a history of nearly two decades, Foshan Lixing Furniture Industrial Co., Ltd. is also in Foshan, Guangdong, turning out products mainly on the OEM basis and exporting to more than 30 countries in addition to China.

Currently the company is promoting two bedroom furniture brands—Junxing and Somenice. The former is offered in various simple, trendy and graceful styles that are easily color coordinated depending on needs of customers; while the latter combines neoclassic and postmodern styles to present understated luxury.

Taking ergonomics, esthetics and structure into consideration, Foshan Lixing crafts high-end furniture featuring comfort, elegance, individuality and variety. “We prioritize quality in making beds which have won praise from clients and are highly recommended in the market,” states Wang Ling, the marketing manager.

Offering a variety of beds, this maker has gained popularity with younger buyers with its line of Forma-branded beds that feature simple and avant-garde design.

“To guarantee quality, we carefully chose materials including the wood, foam, upholstery and lacquer. For instance, the permeable foam we use for mattress is comfortable and health-enhancing for users. We know long-term business must be built on offering top quality, which is the most important value of products,” says Wang.

To meet increasingly high demand of customers, Foshan Lixing emphasizes R&D and strives to develop innovative models. “Compared to people in the high-tech industry, employees in the furniture industry mostly have lower educational background, so we invest more in staff education and training. Also we pay attention to enhancing operating efficiency to lower manufacturing cost,” says Wang.