In the three years from 2009 to 2011, the average monthly wage of workers in Guangdong's furniture industry increased significantly, rising from 1,600 yuan to over 3,000 yuan. Meanwhile, technicians' salaries jumped from 4,000 yuan to nearly 10,000 yuan per month. However, the industry has faced growing challenges in recent years. Global timber resources have become increasingly scarce, leading to a sharp rise in the price of imported wood. Imports from North America, for instance, have surged by at least 30%. At the same time, the ongoing debt crisis in Europe and the U.S. has hit furniture OEMs hard, with many companies experiencing a sharp decline in profits. Some firms now report net profit margins below 3%, and the number of loss-making enterprises is on the rise.
Amid these difficulties, some furniture companies have fallen into traps caused by blind expansion. This includes non-related diversification, investing in unrelated sectors like sports or launching new brands without proper planning. Many companies are adopting a "wait-and-see" approach, focusing more on short-term gains than long-term sustainability. The pressure to rapidly expand retail outlets to generate quick profits has become a top priority. But this strategy comes with risks. Companies must find ways to innovate their marketing approaches, ensuring that dealers aren't just seen as cash machines. The old practice of neglecting after-sales service—like the saying "throwing away corn cobs while holding onto the next"—is no longer acceptable in today’s more competitive and demanding market.
Rao Runping, a prominent industry expert, highlights that effective marketing involves two dimensions: physical and human. It’s not just about product market share but also about brand popularity. Unfortunately, many companies focus only on product sales, neglecting the emotional and psychological connection with consumers. This imbalance leads to weak brand resilience, making it difficult to sustain growth. A good example is Da Vinci, which enjoyed strong product market presence but failed to build real consumer loyalty. When faced with negative media attention, the brand quickly lost its momentum.
This reflects a rigid dualistic mindset common in Western thinking, where people and nature, or consumers and distributors, are often treated as separate entities. Products are viewed merely as commodities rather than as tools to meet human needs. Rao argues that if this trend continues, the future of the furniture industry could look very bleak.
In contrast, Chinese traditional culture emphasizes "people-oriented" values and the harmony between humans and nature. By integrating these principles into modern marketing strategies, furniture companies can create more meaningful connections with consumers. Marketing should focus on people’s emotions, motivations, and aspirations, not just products. The goal should be to win both the market share of products and the hearts of people.
While the furniture industry is still in its early stages, product market share has grown faster than brand popularity. This is a temporary strategy adapted to China’s unique market conditions. However, as the industry matures and faces broader economic challenges, companies that shift their focus toward building strong brand equity will gain a significant advantage. By investing more in brand development and aligning with the evolving needs of dealers and consumers, they can outperform competitors and achieve sustainable growth.
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