Question 1: How far can e-commerce go?

E-commerce is growing rapidly, but its limitations are becoming more apparent. It's not a solution for every business challenge. A large e-commerce company cannot possibly replace all traditional distributors across the country. In industries with low market concentration and high growth potential, like furniture, e-commerce is developing in a decentralized and multi-center way, leveraging its unique strengths. While e-commerce does pose a threat to traditional models, the impact is not as severe or fast as many people believe. The transition will be gradual, allowing time for adaptation.

The best approach to counter this challenge is to give equal importance to both traditional and digital methods. This isn't as complex as it sounds. E-commerce is just a tool that any business can use effectively.

Question 2: Where are the main sources of retail profits?

Retail profit margins in the furniture industry are shrinking. So where will the main sources of profit come from in 2015?

The key areas include premium pricing for high-end design products, brand value, and service-based revenue.

High-end design products can command higher prices due to their uniqueness. Consumers often don’t negotiate on price because they value the exclusivity and quality. For example, some uniquely designed items on the market are sold confidently at premium rates.

Brand equity plays a big role too. Not many brands in China can fully capitalize on brand value, but those that resonate with consumers can. Some may not be widely known, but if their quality, craftsmanship, and after-sales support meet market demands, they can still gain a loyal customer base and charge more. Others have invested heavily in branding and awareness, which also helps them capture a premium.

Service-driven profits are another important source. Selling basic products offers limited returns, so businesses need to explore new service markets. High-end furniture often requires specialized maintenance, and affluent customers tend to rely on such services. Retailers should start offering paid after-sales services early, building trust and loyalty. These services might include moving, installation, cleaning, repairs, and replacing parts.

Question 3: Will the size of retailers expand or shrink?

Overall, the size of retailers won’t shrink; instead, it will grow. However, the number of physical stores is likely to decrease as online retail takes over some roles. That means 2015 will still be a tough year for brick-and-mortar stores. But the transformation won’t happen overnight. The market will change slowly and smoothly.

The ones who survive will depend on how well each business adapts. Those that combine the strengths of physical and digital channels will be the winners.

Question 4: Which brands can survive?

2014 was a difficult year for panel furniture companies, with many going out of business. However, some managed to thrive by focusing on design, efficient production, and strong sales. These companies not only survived but grew stronger.

In 2015, solid wood and mahogany furniture brands will also face a reshuffle. Consumers are gradually returning to rational purchasing behaviors when it comes to panel furniture.

Brands that can succeed in 2015 will likely share several traits: a strong focus on design, quality, brand promotion, quick responsiveness to market changes, and a commitment to high-end positioning.

Question 5: How do dealers profit from the Internet?

There are multiple ways to monetize the web. The most effective and cost-efficient method is to leverage the internet’s information-sharing capabilities. Businesses can use online platforms to broadcast sales messages widely. Another strategy is to build proper channels and maintain communication with customers, using existing clients to attract new ones. Lastly, creating an independent online presence helps build credibility and leave a positive impression on consumers.

Question 6: What are the new characteristics of the new generation of consumer psychology?

According to census data, 227 million young people born between 1986 and 1995 are replacing older consumers at a rate of over 20 million per year. The consumer market is clearly getting younger. So what are the main psychological traits of this new generation?

They value authenticity, seek experiences, and are more informed and selective. They’re tech-savvy, prefer personalized services, and are influenced by social media. Their purchasing decisions are often based on trust, quality, and brand reputation rather than just price. Understanding these trends is crucial for businesses looking to stay relevant in the evolving market.