Forecast: How much consumption can be pulled

At the end of December last year, the Boston Consulting Group (BCG) and the Ali Research Institute jointly released the “China Consumer Trends Report”. It is estimated that the Chinese consumer market will have an increase of US$2.3 trillion in the next five years, which is equivalent to the current scale of the German or British consumer market. 1.3 times. Despite the slowdown in China's economy, the growth rate of China's consumer market is still expected to remain the world's leading level. It is precisely because of this that one of the report's authors, BCG partner Jeff Walters, said: "Consumer goods companies must continue to pay attention to the Chinese market and China will remain one of the countries with the greatest global growth opportunities."

Under such a forecast, will home textiles, one of the consumer products, usher in a new round of sales spring?

During the communication between the old and new years, a reporter from China Textile News interviewed Yang Zhaohua, president of the China National Textile Association. He said that although in recent years, the domestic textile industry has experienced a slowdown in domestic sales growth and the decline in foreign trade is obvious, the industry is in favor of 2016. Development still has confidence that whether or not spring sales can be achieved also hopes to make efforts in various ways.
Is there a fall in income and rising consumption?

Talking about the development of the home textile industry in 2015, Yang Zhaohua said: “At present, the statistical data for the whole year have not yet come out completely. From January to October 2015, the main business of the home textile enterprises increased by 0.2% year-on-year, and the year-round statistics are still unchanged. It is not easy to say that there are changes, but the slowdown in growth is certain."

It is understood that despite the severe economic situation at home and abroad in 2015, the production situation of home textile companies is not bad, the development is relatively stable, and the output growth is about 3%. However, the biggest problem faced by the home textile industry is the lack of market consumption capacity for end products. Yang Zhaohua said: “In 2015, the domestic market has seen slow growth in the consumption of home textile products, and the price of home textile end products has not kept up.”

According to industry insiders, the demand for home textiles is more responsive to residents' income. Consumer demand for home textile products largely depends on changes in income.

Is the slow growth of Chinese consumers’ income leading to insufficient spending power? According to data from the National Bureau of Statistics, China’s per capita disposable income of urban and rural residents in the first three quarters of 2015 was 16,367 yuan, a nominal increase of 9.2% year-on-year, and an actual increase of 7.7% after deducting price factors. Among them, the per capita disposable income of urban residents was 23,512 yuan, an increase of 8.4% over the same period of the previous year, and an actual increase of 6.8% after deducting price factors.

As we all know, in recent years, China's labor costs have been rising. The relatively large increase in employee salaries has caused manufacturers to clamor again and again, and it is precisely because of this that many textile companies, including home textiles, have turned to Southeast Asian countries to find cost.

Then, when the income of these people who are both laborers and consumers grows, why does the consumption of home textile products decline? In this regard, Yang Zhaohua explained: "After rising income, consumer spending also has a priority ranking order. It can be seen that home textile products are not the preferred category for most consumers to improve their lives and increase their spending."

How did the “Urbanized Pies” eat?

As most people think, urbanization will certainly drive growth in consumption, but the area of ​​home textile consumption has not seen results quickly. The current urbanization rate of permanent residents in China has reached 55%. According to the “Thirteenth Five-Year Plan”, the urbanization rate of permanent residents by 60% will reach 60% by 2020. This requires the annual urbanization rate to increase by more than 1 percentage point, involving more than 10 million. people. Yang Zhaohua said that more than this: "In the 13th Five-Year Plan period, our country must resolve three '100 million people', and 100 million people have already entered the city. We must increase citizen treatment. There are still 100 million people in the Midwest to enter the city. In addition, there are 100 million people involved in the transformation of Chengzhong Village, and urbanization will surely create enormous demand. Over the past two years, it has been said that urbanization is the main growth point of the home textile industry. Theoretically speaking, this is not wrong. When theory and practice are combined, it will be much more complicated if we want to further increase home textiles consumption. We cannot wait for the pies to fall, but we must actively open up the market.”

According to the “China Consumer Trends Report”, the number of upper-middle-income and affluent consumers with an annual income of more than US$24,000 in China is increasing day by day. It is expected that 81% of urban China’s increase in urban consumption will come from upper-middle-class and affluent consumers.

In this regard, Yang Zhaohua also made the same judgment: “Consumer habits are of utmost importance. If consumers want to upgrade, they must begin to continuously educate consumers from relatively affluent areas such as coastal cities. This is what we have been doing for years. In doing things, such as solving the problem of consumer misuse of towels and the backward use of towels, the association has adopted various measures such as the publication of the Guidelines for the consumption of home textiles, the promotion of the use of towels and the promotion of public welfare for public welfare, etc. According to statistics, there are more than 10 million people who have received education on scientific consumption towels. If each person can consume one more towel per month, the increase in the market for towels will be unpredictable."

"Production service type" wide supply prospects

"In addition to how we can use more than two towels, we also do locust testing on core products and use scientific data to urge consumers to frequently change towels, covers, and even curtain products. The purpose of doing so is to tap potential consumption space. ."

This year, the China National Textile Association focused on consumer education in the field of curtains. Yang Zhaohua said: "According to the survey, now China's consumers replace curtains once every seven years, and cleaning is rarely done during this period, not because consumers are not willing to clean, but are usually women who are responsible for housework at home. The problem of height and suspension causes the curtains to be washed and disassembled to be inconvenient.If the washing is convenient and convenient, consumers are likely to increase the frequency of cleaning, then the frequency of replacement of curtain products can also be increased to every 3 to 5 years. The industry's production capacity will increase by 50%."

“Therefore, manufacturers and distributors should not place too much emphasis on the market, but also look for the reasons from their own to see if they have provided enough good services.” He said that this is also the industry encourages home textile companies from production enterprises to production. The important reason for the transformation of service-oriented enterprises. "It is essential to do a good job of products and services. Only by continuously improving services and guiding consumption can we really promote consumption upgrades."

In recent years, the concept of “Internet Plus” has developed rapidly. Too many companies have thought too much about how to use the Internet to promote and expand sales, while ignoring the essence of business—the best-selling products are inexpensive. “The purpose of consumer education is to increase spending power and thereby increase the sales volume of home textile products. After the volume comes up, companies should also lower their prices and provide the best products at the best price. Consumers will therefore increase consumption and consumption will increase. Industrial development, such a good circulatory system is our ideal home textile industry development model." Said Yang Zhaohua. 2016 home textile market forecast: How much consumption can be pulled?