2018 New Year speech titled Giving Full Imagination to Our • Home: 100 elites of the home industry, 3 major themes and 1 concern.

How time flies! Now, the countdown to 2018 has begun. This has been a hard year for most enterprises of the home industry. This year, macroscopic environment has been complicated, while trade wars have occurred between China and the United States; upstream real estate industries have been sluggish and enterprises have been subject to a great lack of financial resources in their capital chains. With the promulgation of new rules on environmental protection, a good many small, medium-sized and large-scale enterprises of the home industries have suspended and limited their productions. As a result, customer flow has declined in traditional markets. Meanwhile, new noticeable retail actions are taken in 2018 when e-commerce giants cooperate with markets. Reconstruction of sales scenarios and overall customization are acknowledged to be trends of the home industry. At the end of 2018, KUKA organized the 2019 New Year Speech titled “Giving Full Play to Imagining Our • Home”, where discussions were performed regarding how the home industry should go through winter days, its ways of M&A and trends of future lifestyles.

Hosted by China Furniture & Decoration Chamber of Commerce (CFDCC) and Zhejiang Modern Capital & Industry Institute with the support of KUKA and FURNITURE Today (Chinese Edition). Furthermore, representatives from top enterprises of the home industry, industry experts, famous designers, domestic and overseas well-known media were specially invited to discuss the future of this industry based on its “general trends”.

Renjiang Zhang (Secretary-General of China Furniture & Decoration Chamber of Commerce), Haichen Zhou (Chief Analyst of SWS Research), Rocky Chan (founder of a HK design studio), Guo’an Qu (Deputy President of KUKA) and Dandan (Editor-in-Chief of FURNITURE Today (Chinese Edition) attended the New Year speech.

Renjiang Zhang, Secretary-General of China Furniture & Decoration Chamber of Commerce, specially mentioned how the home industry should go through the winter in the speech. In his words, “We should live in the present, summarize the past and lead the future. Private enterprises have no choice but prosper and enter broader stages. On one hand, we have to develop new technologies, new processes, new materials, and new products; on the other hand, enterprises have to improve quality and strive for better development through transformations.”

He also pointed out that, “In the future, overall high-quality development will be inevitable for the home industry, which shall be upgraded in terms of services, marketing and logistics and so on. Moreover, it is necessary to build platforms for integrated innovations; organize, get involved in and promote drafting, promulgation and implementation of technological industry standards; promptly know about heartfelt wishes of enterprises; strengthen external cooperation; continuously enhance/expand enterprise influences; organize halls of fame and brand days for the Chinese home industry; and execute the talent training plan for the home industry.”

At last, he summarized his speech: First of all, more policy support should be offered to private enterprises since their economic position is recognized. Secondly, enterprises ought to follow trends, transform and upgrade themselves for high-quality development. Judging by how seriously and attentively the audience were listening, we could know how wonderful his speech was.

Haichen Zhou, Vice General Manager of SWS Research, made a speech focusing on “ways of M&A for the home industry”, where he pointed out, “Although current home industry is impacted by the later cycle of real estate and retail growth is slowed down in the home industry, we can strengthen marketing by celebrity endorsement, expand front-end channels through designers, and realize precision marketing via big data.”

In addition, he highlighted that since 2018, merger, acquisition and integration have been relatively frequent in the home industry. From cases of Midea, Little Swan and Euro Kitchen, opportunity of M&A, price of M&A and how to draw lessons after M&A should be our concerns. For instance, private brands and absolute majority are critical. It is easier for companies to expand their scale if they sell a great variety of products through different channels. Companies ought to expand their scale steadily and build a good word-of-mouth in a long term. Control the business cycle and carry out multi-category management. Build brand awareness.

At the end of his speech, Haichen Zhou stated that in 2018, the big home industry will facilitate its integration and coordinated development. In the future, M&A will be prevalent for companies with a great variety of products. It is easy for these companies to achieve a scale as high as 100 billion.

Rocky Chan, the founder of Rocky Design, made a speech on “lifestyle trends”, where he mentioned that “Chinese home lifestyles had slowly returned to nature, and home life will inevitably become intelligent.”

Mainstream style in 2016 - Oriental elements firstly show up in new Chinese styles; mainstream style in 2017 - affordable luxury has been more inclined to contemporary lifestyle; mainstream style in 2018 - minimalism has extended previous color match. The colors prevalent in 2019 will place great emphasis upon senses of people born in 1990s. Most of them will be joyous and lively.

Rocky Chan will bring us an Oriental aesthetic visual feast ranging from colors to costumes, automobiles, life supplies and furniture.

Renjiang Zhang (Secretary-General of China Furniture & Decoration Chamber of Commerce), Haichen Zhou (Vice General Manager of SWS Research), Rocky Chen (founder of Rocky Design), Dandan Gao (Editor-in-Chief of FURNITURE Today (Chinese Edition), and Guo’an Qu (Vice President of KUKA with a French Ph.D. Degree) had a roundtable discussion with respect to “how should enterprises of the home industry go through winter”.

Haichen Zhou, Vice General Manager of SWS Research, considered that the function of a capital market was to optimize resource allocation. This year, the home industry is in depression for two reasons as follows: On one hand, its operations have been really impacted by real estate; on the other hand, exports are under pressure from US-China trade. It is in this period that enterprises must give full play to their unique capabilities.

Renjiang Zhang, Secretary-General of China Furniture & Decoration Chamber of Commerce, stated in his speech that despite sluggishness of the industry, it would constantly go through ups and downs with changing circumstances, and innovation is the key for this process. Apart from studying markets and consumers, the enterprises also have to learn how to lower costs.

As a famous designer in HK, Rocky Chan also pointed out that research and development of new materials were inadequate in the Chinese home industry, where plans weren’t appropriately made for scale estimation in advance. Furthermore, only sustainable designs in great demands are good.

Dandan Gao, Editor-in-Chief of FURNITURE Today (Chinese edition), highlighted in the roundtable discussions that, “in the whole market, small and medium-sized enterprises are under more harsh conditions than KUKA. We have to improve the supply chain of this industry to solve problems regarding goods preparation and logistics, and to change our ideas on manufacturing.

In the future, the home industry will still have great potential for development in consumptions. The 2019 speech on “Giving Full Play to our Imaging Our • Home” has smoothly come to an end with audiences’ applause.