The Chinese flooring market is huge. In 2011 alone, US market research organisation Catalina Research estimated that total sales throughout China amounted to 3.9 billion m2. The high-end segment of this market offers growing potential for European-made quality laminate flooring, and the EPLF (Association of European Producers of Laminate Flooring) believes that the Chinese market is once again offering good opportunities for its members.
Tiles are still by far the most popular option in the Chinese flooring market. According to Catalina Research, tiles represented 75% (2.93 billion m2) of all flooring products sold in China in 2011, followed at a distance by carpets and rugs with 9% (351 million m2) and elastic floors with 5% (195 million m2). Laminate flooring made up just 4% of the market (156 million m2), with solid wood and bamboo floors accounting for 4% (156 million m2) and stone floors 3% (117 million m2). The market share occupied by wooden flooring has risen in recent years, says Catalina Research. And as a result of the anticipated growth in the urban population between now and 2025, it is estimated that demand for new floors will increase by 149 to 177 million m2 per year.
European products in demand in the premium segment
European manufacturers have the potential to regain a lot of ground in China. The opportunities are certainly there. Several years ago laminate flooring began to be manufactured in China, causing the import market for EPLF members to collapse, but in 2012 a certain amount of rollback was seen. In 2012, imports of high-quality, specialist brand-name goods manufactured by EPLF in China and Hong Kong once again exceeded 3 million m², after having fallen to 2.3 million m2 in 2011. This is a positive sign, especially in view of the fact that in 2012 China produced 28% of the world's laminate flooring, moving into the top spot for the first time (with Germany accounting for 27%).
Western tastes set the standard
Some EPLF members, such as Pergo, Skema and Unilin, are already active on the Chinese market, and they could soon be joined by other names. Volkmar Halbe, Chairman of the EPLF's Market and Image Committee, has high hopes for the new Far East markets for European manufacturers: "Our new slogan, 'Quality and Innovation made in Europe', sums up the unique selling points with which EPLF members can promote their certified products in China. It's important that European manufacturers position themselves unambiguously in the premium segment." Chinese customers want a slice of the 'Western' lifestyle - which is excellent news for European-made products.
Italian manufacturer Skema has found that interior designers for commercial premises and affluent private clients often play a key role as decision-makers. They suggest specific products to the client and can have a significant influence in the final choice. Raffaele Ferrara, Project Marketing and Communication Manager, explains: "Interior designers are focusing on Western style and importing European tastes into the Chinese market. Grey and beige decors, which have been in vogue in Europe for the past couple of years, are also doing very well in Chinese cities. In general, light and mid tones are very popular, while walnut and smoked oak are the dark decors of choice. Recently we have also seen a rise in demand for high-quality synchro-pore finishes. Formats are changing too: in addition to standard boards the Chinese market is slowly but steadily acquiring a taste for long board and tile formats."
Maintaining technology leadership
The excellent reputation enjoyed by European products on the Chinese market is not only due to elegance in design. The quality of European laminate flooring is also measured by whether the products were actually manufactured in the home country of the brand name. „European-made products are highly sought after in China, and this means important opportunities for the European laminate flooring industry with its enormous potential for innovation. Because genuine European-made flooring exported to China is subject to strict EU norms, it meets very high standards of product quality, sustainability and eco-friendliness and is usually far superior to its Chinese equivalent. Because Chinese customers are increasingly demanding these qualities, Chinese manufacturers will quickly attempt to catch up. But the EPLF is convinced that European manufacturers, with their production expertise, are well positioned to maintain the lead over Chinese competitors.
Not "do it yourself" but "do it for me"
The Chinese flooring market has specific cultural factors that make it different from other regions. China is not a "do it yourself" market, but a "do it for me" market. In a country with a tradition of cheap itinerant labour, few middle-class customers would think of laying their own flooring. Laminate floors are seen as a building material rather than a home decorating product. Chinese manufacturers normally sell their products through their own stores and also offer an installation service. These points of sale are either stores that specialise in flooring or brand showrooms in multi-storey malls or shopping centres offering a wide range of building products.
There are no purchasing associations of independent flooring manufacturers in China. Some European flooring manufacturers work with established exclusive agents like HiStep Healthy Living Ltd., which operates manufacturer showrooms in shopping centres and malls specialising in building products. Another growing feature of the flooring market in China is the decorating centre, where a team of designers helps the client to design their living space for a fixed price per square metre.
Young urban customer base
E-commerce is also set to play a bigger role in Chinese consumer behaviour. Online shopping services are already seeing significant year-on-year growth. Young, well-educated Chinese are regular Internet users. The average consumer in China's new, affluent middle class lives in one of the prosperous cities with a million or more inhabitants, mostly on the east and south-east coasts. In addition to Shanghai, Beijing and Guangzhou there are numerous other metropolitan areas which are home to several million people. Consumers in this high-income group are between 21 and 40 years old – around 20 years younger than comparable target groups in the USA. For foreign manufacturers the Internet is already a very useful channel for supplying information about their products to potential customers all over China.
"China's large laminate flooring market is ripe for innovative European products," says Volkmar Halbe. "At the end of the day, every European manufacturer will have to tread their own path in the Chinese market. But at the EPLF, we'll be supporting our members with ongoing standardisation efforts and an active quality policy for European products."