The wallpaper and wall covering industry is in a period of rapid transformation.

Introduction to Da Zhuang: He Huilin, Chief of the Copyright Section of the Economic Development Bureau of Gaogang High-tech Zone, and part-time deputy secretary-general of the China Wallpaper and Wall Covering Association.

One of the aftertaste of the 2019 Beijing Exhibition

The Beijing Wallpaper Exhibition and Shenzhen Fabric Art Exhibition have ended. Our Taizhou wallpaper group has discussed the prospects of the wallpaper and wall covering industry several times. Many CEOs are both observant and thoughtful, and have expressed many opinions. An old friend in the group asked to see Da Zhuang’s thoughts on the exhibition. In fact, when Da Zhuang went to Beijing to take a look around, he didn't see anything interesting. Since my friends wanted to see it, I just came up with a topic to talk about.

1. The confusion of wallpaper people (the most deserted wallpaper exhibition)

After Da Zhuang visited the exhibition on his first day, the first word he expressed in his circle of friends was deserted. Da Zhuang has been to Shanghai Everbright to attend wallpaper exhibitions since 2009. Among them, he only missed the 2013 Shanghai exhibition. He can be regarded as a seasoned spectator. However, this time the Beijing Wallpaper Exhibition has fewer booths and fewer visitors. I borrowed the news from my boss Xu. : Compared with 2018, there were 9,000 fewer people on the first day of the Beijing exhibition and 7,000 fewer people on the second day. Da Zhuang once again mentioned the old saying that it is time to implement a wallpaper exhibition once a year. Is it still meaningful to have two exhibitions a year?

Every year when visiting Da Zhuang, we have to go to the booths of Taizhou local companies. This year, only the Taizhou team Yueran Paper Shang (which owns the world’s only high-speed digital wallpaper production line) has a booth in Hall W1 of the New National Exhibition. Others only opened a room at the Crown Hotel, or even no rooms at all. Each factory participating in the exhibition opened few new editions (an average of 1-2 new editions). The popularity of the Crown Hotel is not as bad as usual. The usual queues to get in the elevator have completely disappeared. The market is bleak and the situation is grim. Wallpaper bosses no longer dare to invest as before.

Da Zhuang also did a simple survey. It is said that there are almost a hundred wallpaper wholesalers in Xuzhuang Street, Gaogang. In the past, they all wholesale wallpaper, but now they all wholesale wallpaper + seamless wall coverings, and wall coverings Cloth shipments have already far exceeded wallpaper. In 2018, Taizhou Elegant launched the 3N seamless wall covering (Huangshi Jingwei 2.8-meter rotary mesh equipment) project, which seems to be the only big investment in Taizhou’s wallpaper industry. After consulting local wallpaper stores in Taizhou, wall covering shipments accounted for about 90%. According to information from the China Wallpaper and Wall Cloth Industry Annual Conference, the supply of domestic non-woven paper base dropped by 27% in 2018, the non-woven paper market fell by nearly one-third, and the output of textile wallpaper (cloth) increased significantly by three times. Seamless Wall coverings are soaring, and 2018 is a great year for wall covering people.

In 2018, industry benchmarks Yakinuo and Xinwang have already taken the initiative to reduce production of narrow widths and expand production of wide widths. The booths in the E1E2 main hall of this exhibition are all companies vying for brand names in the industry. At the booths in the main aisle, even if it is a factory that started out as wallpaper, almost all seamless wall covering versions exceed the wallpaper version. The mainstream of the wallpaper and wall covering market is wide and seamless, which is an indisputable fact.

Promotional theme of Yaqinuo booth in Beijing Exhibition (wall covering arrangement is the key point)

Stars in the dark night or dawn? Beijing Zhan Da Zhuang also visited Mr. Yao of Xinyuan Wallpaper (focusing on solid colors and opened 9 new books), Mr. Su and Dong Niu of Luoyang Yujing (opened 4 new books), and Mr. Guo of Bauhinia (opened 4 new books). 6 wallpaper books, 9 wall cloth books, a wall panel book with five materials on the surface), as well as the above-mentioned Yueran Paper Shang (developed 8 new books), the investment effect of this year’s Beijing exhibition is all Exceeded expectations. Is it because they were willing to invest when the wallpaper people were hesitating and gained the first advantage? Or is product development positioning accurate? It’s worth discussing (at least the industry needs a new version of wallpaper).

2. Transformation and Upgrading of Branded Wallpaper Stores and Imported Wallpaper Dealers

During this Beijing exhibition, I had the honor to visit the Rouran headquarters and communicate with Mr. Ye and Mr. Zhang, gaining a lot of insights. , although Rouran has a deep attachment to wallpapers and the entire team also has a deep inertial thinking, but from their conversations, it feels that due to market changes, Rouran is accelerating the upgrade of its specialty stores (rich products: seamless Wall coverings + curtain fabrics + wallpapers and murals, Rouran has also established a digital operation center). I think the rapid development of seamless wall covering brand stores has posed a threat to them. On the eve of the Beijing wallpaper curtain, Rouran held a franchisee conference in Beijing with the theme "Bubu Wins".

Imported wallpaper brands such as Marburg, Ax, Brewster, Sofron, etc. have also been captured by seamless wall coverings, and have added (seamless) wall coverings and fabrics to their channels. Upgraded to a soft furnishings store, it seems that the only one that insists on only making wallpapers is Italian Bolton.

Old wallpaper people must have a wallpaper complex, but it is a wise choice to adjust the business direction in time to adapt to market demand. Their actions also confirmed Da Zhuang’s judgment when he visited the exhibition in Beijing last year: Upgrading wallpaper stores to soft decoration stores is the direction!

Just a quick aside. During this Beijing exhibition, Da Zhuang had a brief exchange with Mr. Yang from Wanhu. Wanhu insists on only doing wallpaper wholesale (porters) and never touches wall coverings (very rare). There should be no dispute that Wanhu’s online wholesale wallpaper efficiency is number one, but I’ve never understood why they don’t touch wall coverings. Mr. Yang and I made an analogy: a businessman who originally wholesaled liquor had a very prosperous life. Later he got beer, and then rice wine, red wine, sake, etc., all circulated through the same channel. If there is market demand, he will continue to add products. That is, it will always be very moisturizing. If you have a liquor complex, if you don’t make other alcoholic products, it probably won’t be moisturizing. The bottom line for liquor wholesalers is not to sell fake liquor, not not to sell other liquors. Wanhu's bottom line is not to wholesale fake and inferior products, but not to avoid contamination with other categories of products. But Mr. Yang remained unmoved and made Da Zhuang admire his perseverance. Let’s make another complaint. Wanhu’s version has not been removed from the shelves for three years. Do you think that classics are eternal?

It is a general trend for brand wallpaper stores to upgrade to overall soft decoration stores. Real estate has continued to decline for many years, coupled with changes in finely decorated houses, overall home decoration, overall soft decoration and other business formats, the concept of decoration consumption has invaded the minds of consumers. After the mobile Internet has become the infrastructure, it has changed consumers' consumption habits. , it became inevitable for the earlier wallpaper stores to transform and upgrade to overall soft furnishings. Currently, there are four types of forces developing in the direction of overall soft furnishings (brand stores). One is the early wallpaper brand chain stores (such as Rouran, Grammy, Ruibao, Marburg, Ax, etc.), which are good at terminal channels. Construction and operation; second, the wallpaper factory builds its own terminal brand stores (Jacino, Wallaife, Topli·Yinhejia, Magnolia, etc.). They have been immersed in wallpaper products for many years and have strong product design and manufacturing capabilities; third They are cutting-edge wall covering companies (Lingxiu, Aishi, Ruby, Keloya, etc.). At present, most of them are building brand wall covering stores (it seems that only a few such as Yilong Wall Covering are doing overall soft decoration). They are very interested in fabric art. He knows the product process well, has a strong brand awareness, is good at creating hype, and operates brand chain stores with ease, and his development speed exceeds the imagination of old wallpaper people (there are nearly 500 Ruby stores and more than 300 Croya stores); fourth, he comes from across the border. With great strength, cross-industry brands such as Oppein in the overall home decoration industry and Ruyu Deshui in the curtain industry have many offline stores. If they cross-industry, they will make waves in the industry.

Xiuwojia and Suoyan Soft Decoration, which Da Zhuang is familiar with, are small cross-border companies from the Internet. Xiuwojia has its own original soft decoration sales and display software, although without them, it has not yet launched an overall soft decoration. It is a brand of decoration, but they provide wallpapers, curtains, and murals to merchants, and use software service features to develop offline high-end physical stores; Suoyan Soft Decoration is good at training and sharing, and has unique skills in helping store traffic (the entire network Drainage), he has created a lot of practical software. The founder Luo Haoyuan is an Internet celebrity in the wallpaper circle and has a considerable number of fans in offline stores. The partners have done a good job in product selection and quality control. The investment response of the two companies at the Beijing Exhibition exceeded expectations. I couldn't hide my excitement when communicating with Da Zhuang. Da Zhuang believed that although they are small, they are a force that cannot be underestimated.

There is a question worth thinking about. Finely decorated houses have cut off the market share of stores. The market capacity of soft decoration stores will definitely be reduced. Adjustment from the incremental new house market to the existing house market is a must choice. Isn’t it time to implement the “wall-pasting” PK “wall-refreshing” initiative proposed by Dazhuang?

3. Wall covering people, please slow down your momentum

2018 is the brand year of many wall covering companies. Da Zhuang works in Taizhou and has little contact with the CEOs of wall covering companies, but he always pays attention to their developments. Last year, Da Zhuang expressed his appreciation for the wall covering industry's move to build a terminal brand in an article. At first, I saw companies such as Yakino, Ruby, and Croya spending huge sums of money to hire big-name spokespersons, and I still admired the courage of the Zhejiang boss.

Probably because of the herd effect, there are many people following the trend. At present, it seems that more than 30 wall covering companies have hired spokespersons. To put it bluntly, some of them have never been heard of by Da Zhuang. The audience of the spokesperson should be her fans. I wonder if the products of these companies are positioned for them? When Da Zhuang had a private chat with some friends, they all thought that many companies would lose more than they gained, and many people would pay tuition.

On the first day of the exhibition, Sina Home Furnishing held a press conference for the "White Paper on China's Wallpaper and Wall Cloth Industry" at the New China National Exhibition Center. Da Zhuang was fortunate enough to be present and listen to an exciting speech. Regarding the sales of wallpaper and wall coverings, there are data and forecasts in the figure below. Professional organizations predict that wall covering sales will exceed wallpaper in 2019, which is good news for wall covering companies. However, a report released by the China Wallpaper and Wall Covering Industry Annual Conference said that “the wall covering industry has entered a stage of low-price competition, and overall profits have dropped by 30%. ". Mr. Luo of Meike said a classic saying: "The price competitiveness of products in the wallpaper and wall covering industry is far greater than that of brands."

(The picture is quoted from the white paper on China's wallpaper and wall covering industry)

When communicating with the bosses during the Beijing exhibition, Da Zhuang believed that brand public relations, products and services are indispensable. Recruiting a spokesperson is just public relations, and the products and services have no characteristics, so hiring a spokesperson should be in vain.

Yesterday, the business manager of the wall covering company communicated with Da Zhuang and said that his company is also planning to hire spokespersons. I suggested that they wait. More than 30 people have already hired spokespersons. What he said is simple, Then more than 30 people come to fight to see who can survive. Oh My God? He actually thought so. Musi International (wall covering) did not hire a spokesperson. Mr. Hua told Da Zhuang that it is their positioning to be sophisticated but not big. I think he is so clear-headed!

4. Integration of wallpaper, wall coverings and wall coverings

There are only wallpaper manufacturers in Taizhou, and there are four channels for wallpaper products: engineering (finely decorated houses are popular and have become the main channels), domestic sales, Export, e-commerce. Most wallpaper companies in Taizhou only sell domestically. Except for Aishe, which has self-operated exports and a dedicated engineering department, the export and engineering business of other companies rely entirely on relationships. A few e-commerce companies gave up after trying it. The wallpaper industry has been having a hard time since 2015. After wall coverings became popular, many companies in Taizhou also tried to organize original wall coverings, but to no avail. Friends often ask Da Zhuang, what should the wallpaper company do? It's such a big topic, let me be quiet for a moment.

Da Zhuang is born in the 1960s and has experienced consumption upgrades such as buying fabrics from cloth stores and asking tailors to make new clothes, buying ready-made clothes from the clothing counters of department stores, and buying suits in clothing stores. The wallpaper and wall covering industry is currently in the transformation period from selling fabrics to selling clothing stores. However, most wallpaper and wall covering factories do not have the ability to upgrade and can only be integrated objects. If the products have characteristics, they may become suppliers of the overall soft decoration store (brand store), and life will be a little smooth; if the products have no characteristics, they can only become the main road. The store's suppliers live a hard life. Wallpaper is only one of the wall decoration materials. The habit of focusing on products and neglecting services over the years has resulted in the store, manufacturer, and craftsmen quarreling with each other when problems arise on the wallpaper (such as color difference, seams, warping, mildew, etc.) , the consequences of consumer disappointment. Only brand stores can eradicate the stubborn problem of short service in the wallpaper and wall covering industry.

Da Zhuang first knew that Septwolves were just jackets in the clothing cabinets of department stores. Later, there were counters, and then there were specialty stores, ranging from jackets to all-season clothing, and even leather shoes, bags and accessories. Wallpapers, wall coverings, curtains, murals and paintings are equivalent to the whole season in soft furnishing stores, and they will definitely appear harmoniously on the walls of thousands of households. When the price war for wall coverings meant that the profits from a single wall covering were not enough to support branded wall covering stores, Da Zhuang guessed that they would naturally increase their categories and upgrade to overall soft furnishings. Thinking from the perspective of the diversity of wall decoration materials, multiple categories are an inevitable trend.

Finally, let me mention two key words: store training and digitalization. These are the hurdles that must be overcome on the road to branding.

Da Zhuang 2019.3.21

Note: At the request of President Xinyuan, Da Zhuang wrote this article in a hurry. Thank you to all the industry bosses for your help. This article represents only my personal views and criticisms and corrections are welcome.