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Home improvement is a growing trend on the mainland (photo: Xinhua News Agency)
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More than ever, middle-income mainlanders are embracing hearth and home with pride and their pocketbooks.
That’s the message from a survey commissioned by the Hong Kong Trade Development Council (HKTDC), conducted from April through May in 10 mainland cities.
Some 73 per cent of respondents said they agreed or highly agreed with the idea that they’re more willing than before to spend money on purchasing or replacing home decoration products. The consumption trend is even more marked among groups earning higher incomes.
Apart from being more willing to spend, 74 per cent of respondents agreed that when purchasing home decoration products, trends are far more important than a few years ago.
Despite furniture demand flattening during the lacklustre property market of 2008, the past five years have shown a scorching 30 per cent annual growth rate for furniture sales. That dropped from January to May this year to a creditable 27 per cent growth. Even bedding showed an average annual growth rate of 15.3 per cent in the five years to 2007.
Home Economics
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Mainland consumers
prefer unique decorative items (photo: Xinhua
News Agency)
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Of the survey respondents who moved into self-owned, new homes in the past year, 90 per cent carried out decorations when they moved in; of those, 93 per cent had full-scale decoration work done.
The prospect of moving into a home without having it decorated is more usually found in second-tier cities, with most of these homes being second hand and decorated properties anyway.
In the surveyed cities, the average spent on decorating a new home was Rmb61,121 (US$8,950), about twice the average spent Rmb31,795 for decorating an old residence.
As to why existing householders decorated their “old” homes, 56 per cent of respondents indicated that they wanted to make their places more trendy, while 55 per cent pointed out that their homes were getting old and looking worn out – hence the upgrade.
This tendency was even more apparent with the purchase of household products. Some 73 per cent of respondents agreed or highly agreed that when they bought such functional products as clocks, they attached more importance than before to decorative elements. Design was increasingly important, a conceptual change that may prove advantageous to Hong Kong companies with an edge for design.
Different not Bizarre
The move towards trendiness in home design hasn’t been at the expense of practicality. In fact, 80 per cent of interviewees opted for furniture design that could make the best use of their space.
Some 50 per cent said they were interested in household layouts and display design services. Another 34 per cent indicated that they were “highly” interested in such services. Consumers in Hangzhou, Shanghai, Beijing, Shenyang, Chengdu and Guangzhou, in particular, were attracted to these services.
Most consumers also looked for furniture that was durable. They chose items with pronounced design elements or styles. They wanted to be different but not bizarre.
These shoppers opted for avant-garde designs when buying decorative products, such as clocks and small objects, because these were relatively inexpensive and easily replaceable.
In other words, the difference was in the detail. Examples included wardrobes with the same external design but custom-made or with adjustable internal compartments, or upholstered sofas complete with an extra set of covers for changing and creating a different style.
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Respondents say they believe in "value for money," meaning the higher the price, the better
the quality
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Among respondents who had just moved into new homes, 44 per cent intended to replace all their furniture, while 34 per cent said they would replace most of their furniture.
By comparison, only seven per cent of those living in their existing homes replaced all their furniture and 23 per cent replaced most. For those moving into new homes, the younger respondents were more willing to replace all their furniture.
People noted that the sitting room and the bedroom were the rooms that best expressed their personal tastes, so superior-quality sofas and beds were the items they were most willing to spend money on.
Among upholstered products, curtains and bedding were mentioned as accounting for 71 per cent and 70 per cent respectively of new purchases.
Big Spenders
The average total spent on furniture was Rmb12,406 and up to Rmb16,550 for people moving into new homes, double that of people living in old homes.
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Brand Hong Kong
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While brand is not the most important consideration for consumers in their purchase of furniture or upholstery, people in general attach great importance to quality. Hence, factors that can help increase consumers’ confidence in product quality are useful in winning in the mainland market.
According to the survey findings, nearly 60 per cent of respondents agreed, or highly agreed, that they were confident with the quality assurance of Hong Kong-brand home decoration products.
Although awareness of Hong Kong home-decoration product brands was not high, consumers had greater confidence in, and preference, for Hong Kong brands.
According to analysis of the respondents’ demographic data, people who prefer Hong Kong brands are consumers with stronger purchasing power. This provides a better market base for the entry of Hong Kong brands into the mainland’s medium-to-high-end market.
Compared with their mainland peers, Hong Kong manufacturers are in a better position to supply fashionable and high-quality products. Many consumers agree that Hong Kong is an international metropolis “aligning with the international market, integrating eastern and western cultures, and leading market trends.”
In fact, 64 per cent of respondents agreed that “the home decoration products designed by Hong Kong follow international trends more closely than mainland products,” while 61 per cent agreed that “Hong Kong is the pathfinder for mainland household decoration trends, disseminating information on world trends to the mainland.”
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Of the surveyed cities, the average spent in Shanghai was the highest, with people moving into new homes spending an average of Rmb26,891, almost three times as much as that spent by people living in old homes.
When selecting furniture, respondents placed emphasis on quality and style. And mainland consumers are becoming increasingly brand conscious.
As for furniture consumption, the importance of branding was not that high. This is probably because the purchase of home decoration products is mostly a short-term, highly focused transaction.
People only considered interior design when they wanted new products, which is why they had little knowledge about products or brands. Neither did they particularly care where the product was made, assuming that the mainland produces good quality.
Survey findings showed that 76 per cent of respondents believed in “value-for-money, meaning the higher the price the better the quality.” In the medium-to-high-end market, pricing has to be set at the right level.
Green Furnishing
Although eco-friendliness/safety ranked only fifth among considerations, the findings reflected requirements for quality. When asked what factors would increase their interest in choosing a certain item, 92 per cent of respondents indicated that they were interested, or even highly interested, in buying items using green materials. People were also more willing to pay an average premium of 14 per cent to buy products made from green materials.
Although consumers were relatively less brand-conscious where furniture was concerned, separate focus group feedback revealed that they were familiar and comfortable in the malls in which the brands were offered.
In fact, home centres were the main source from which consumers obtained the relevant product and trend information. To a certain extent, they expected sales channels to exercise quality control and provide them with confidence and assurance.
From focus-group discussions, home centres have become sales venues for different grades and characteristics. Generally, consumers believe that the quality of products sold by high-end furniture marts is more comprehensively guaranteed.
For more details, see the forthcoming HKTDC Research report “Consumer Survey of Home Furnishing on the Mainland,” which can be ordered at http://www.hktdc.com/bookshop.
