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, the number of buyers dropped by 20% compared to previous years, with both transaction volumes and buyer numbers declining. The foreign outdoor furniture market is currently in a "buyer's market" phase, where price competition is rampant, resulting in an era of "small profits" for manufacturers. Most Chinese outdoor furniture companies are export-oriented, and while they have learned from foreign trade practices, countries like Vietnam and Indonesia are beginning to gain competitive advantages in this sector, presenting new challenges. To continue growing, Chinese outdoor furniture companies must explore more sales channels.
As traditional markets face difficulties, many companies are now turning their attention to the domestic market. The demand for outdoor furniture is rising, expanding beyond commercial and professional sectors into households. This shift has attracted the interest of foreign trade enterprises, who see great potential in the local market. Industry experts and company leaders believe that domestic sales will become an inevitable trend, and the distribution channels for outdoor furniture will also diversify in the coming years.
Traditional sales channels still play a major role in China's outdoor furniture industry. The conventional method involves finding dealers through exhibitions, where dealers operate as the main sales force, selling products on behalf of the manufacturer. The process typically begins at industry events, where companies meet with potential agents and distributors. These events, such as the numerous domestic furniture exhibitions in China and large international shows in France, the U.S., Italy, and Germany, serve as key platforms for business negotiations. Through these meetings, companies sign agreements, granting agents the right to manage and sell products, while the manufacturers retain ownership of the goods.
There are differences between agency and distribution models. In an agency arrangement, the agent acts on behalf of the company, not purchasing the products outright but receiving certain discounts or benefits. The goods remain the property of the manufacturer, who then distributes them to the market. On the other hand, distributors purchase products directly from the company and resell them. They take ownership of the goods and act independently. Many Shenzhen-based furniture companies prefer the distributor model due to its flexibility and lower risk.
In recent years, self-built sales channels have been gaining momentum. To reduce costs and increase control, well-funded manufacturers are moving away from relying on third-party furniture stores and instead establishing their own retail outlets. This strategy has long been used in the civilian furniture industry, with brands like Fuzhidao, Federation, and Dynasty setting up thousands of stores nationwide. For example, Fuzhidao has over 1,600 stores, while the Federation operates more than 1,000 chain locations across 300 cities. Other companies, such as All-Friends and Pocket Pearl, have also expanded rapidly.
Some manufacturers are exploring innovative ways to build their own channels. For instance, the Shenzhen Furniture Association has leveraged the regional brand advantage of "Shenzhen Furniture" to bring together over 100 local furniture and jewelry companies to enter the Nanming "Minsk" home square, creating a low-cost expansion strategy for Shenzhen furniture businesses.
Self-built channels can be either direct sales or franchise-based. Direct sales allow manufacturers to fully control their brand image and market positioning, but require significant investment in capital and human resources. Franchise models, on the other hand, offer lower financial pressure and faster market entry, though they involve sharing profits with franchisees. Both approaches have their own advantages and challenges, shaping the evolving landscape of the outdoor furniture industry.
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