The European economic crisis has significantly impacted the global outdoor furniture market, leading to a contraction in consumer demand. At the 29th Guangzhou (International) Outdoor Leisure Furniture Exhibition, there was a noticeable decline, with a 20% reduction in the number of buyers compared to previous years. Transaction volumes and buyer numbers both dropped, signaling that the foreign outdoor furniture market is currently in a buyer’s market. This has resulted in fierce price competition, pushing manufacturers into an era of thin margins. Most Chinese outdoor furniture companies are export-oriented, but as Vietnam and Indonesia begin to gain ground in the export market, they face increasing challenges. To survive and grow, these companies must look for new sales channels and expand their reach.
As the domestic market evolves, so do the opportunities. The demand for outdoor furniture in China is rising, extending beyond commercial and professional use to become more common in households. This shift has prompted many foreign trade-oriented enterprises to explore the potential of the domestic market. Industry experts and company leaders believe that domestic sales will soon become a key trend, and the distribution channels for outdoor furniture will also diversify.
Traditional sales channels remain dominant in the industry. The standard approach involves identifying dealers through exhibitions, where dealers then operate stores to sell the products. This model typically works by having the dealer manage the product on behalf of the manufacturer. The process usually starts at major trade shows, such as the numerous domestic furniture exhibitions in China, or international events in France, the U.S., Italy, and Germany. Companies meet with potential agents and distributors, negotiate terms, and sign agreements. In return, the agents gain the right to manage and sell the products, while the manufacturers gain access to new markets.
There are differences between agency and distribution models. Under an agency agreement, the agent acts on behalf of the company without purchasing the products. Instead, the manufacturer offers them preferential treatment, and the goods remain the property of the manufacturer until sold. Distribution, on the other hand, involves the distributor purchasing the products directly from the manufacturer and reselling them. Distributors typically buy the products with their own capital and take ownership before selling them. Many Shenzhen-based furniture companies rely on this model.
In recent years, self-built sales channels have gained momentum. To reduce costs and increase control, well-funded manufacturers are moving away from traditional retail stores and establishing their own branded outlets. This strategy has been used successfully in the civilian furniture sector for years. For example, some brands now operate dozens of direct retail stores, while others like Fuzhidao have over 1,600 stores, and the Federation operates more than 1,000 chain locations across 300 cities. Other companies, such as Dynasty Chain and All-Friends, have also expanded rapidly. Additionally, the Shenzhen Furniture Association has led efforts to create a low-cost channel expansion by bringing together over 100 local companies to open a shared retail space in Nanming’s Minsk Home Square. This initiative aims to leverage the “Shenzhen Furniture†regional brand to enhance market presence.
Self-built channels can be either direct or franchised. Direct stores allow manufacturers to fully showcase their brand identity, market positioning, and corporate values, but they require significant investment in funds and human resources, making growth slower. Franchise models, however, offer lower capital pressure and faster market entry. By leveraging the dealer's existing network, companies can quickly establish themselves in new regions, although this often means sharing a portion of their profits.
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