In recent years, I've had the opportunity to interact with furniture dealers from various regions. Each of them operates in different categories and has varying levels of financial strength, but they all share a common sentiment: "running a business is tough," and the underlying message is that "every dealer is taking a risk."
Furniture manufacturers, on the other hand, are also struggling. They complain about rising production costs, uncertain shipment volumes, and the possibility that their final profits might not even match those of the dealers. Meanwhile, retailers often express frustration, pointing fingers at the "shortsightedness" of the dealers.
It seems as though the surface of the furniture industry is full of superficiality, giving people the feeling of "laughing on stage, crying behind the curtain." Beyond mutual blame, the challenges facing the entire industry are real, and internal adjustments are being made amid contradictions and complexities. Whether or not we're ready, major changes are inevitable.
As someone who has been closely following the furniture industry for many years, I’d like to explore what the future of this sector might look like, and how today’s players could shape it.
**Furniture Manufacturers: Becoming Brand Suppliers**
It's unlikely that manufacturers will completely abandon manufacturing in the future. However, the industry will definitely see a significant reduction in the number of companies—perhaps from 80,000 or 50,000 down to just a few. The law of survival of the fittest will apply here.
Manufacturers can be broadly categorized into two types. The first is branded companies. These enterprises have their own brand identity, and their products are labeled accordingly. While many brands exist today, only a few will survive in the long run. These future brands will have established reputations, diverse channel models (such as direct stores, franchises, or wholesale), and may either produce in-house or outsource through foundries. Their success will rely on strong positioning, design innovation, or mass-market appeal.
The second category is unbranded manufacturers, essentially current foundries. Though they lack brand value, they still hold a place in the global economy. Due to rising costs, many domestic foundries may move to Southeast Asia or even Africa, while a few will remain in remote areas, though their numbers will shrink significantly.
**Furniture Retailers: Building Their Own Brands**
For years, many furniture dealers have admired foreign retail models, believing that true channel power lies with the retailers. While China's furniture industry is expected to evolve toward more advanced models, only a select few dealers will succeed in this transformation.
The first type of successful retailer will be self-sufficient, operating in a model similar to current ones but with fewer players. They may become exclusive regional retailers for certain brands, open franchise stores, or sell authorized products.
The second type is private-label retailers. Many dealers dream of building their own brands. After accumulating capital, some may choose to partner with foundries, produce their own products, and sell them through their own channels—mirroring the European and American market model.
**Distributors: Shifting Toward Brand Retailers**
Furniture distributors play a key role in the current supply chain. However, as the number of brands decreases, traditional store-based models will struggle to sustain themselves. With stronger brand recognition, many manufacturers will opt for direct sales channels, reducing their reliance on third-party distributors.
Chain stores, in particular, have the potential to transition into brand retailers. Leveraging their accumulated brand influence, they can purchase products and resell them under their own brand, smoothly shifting from a distribution model to a platform-based one.
**The Future of Furniture Retailers**
In the coming years, manufacturers will focus on brand development, either producing themselves or outsourcing to foundries. Dealers will evolve into multi-functional retailers, and those who adapt well will become the big winners.
While predictions always carry risks, the goal here is to spark discussion among industry leaders. By sharing insights and ideas, we can better navigate the future.
For more updates on the Chinese furniture industry, visit the official website of Xianghe Furniture City.
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