Article Number : 4487 |
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| Date | 5/18/2009 10:07:27 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4487 |
| Abstract | By Matthew Spieler SHANGHAI—For more than a decade China has been the go-to place for sourcing products. And while the country remains the No. 1 market for U.S. companies to import from, the recession has forced businesses to... |
| Article | By Matthew Spieler SHANGHAI—For more than a decade China has been the go-to place for sourcing products. And while the country remains the No. 1 market for U.S. companies to import from, the recession has forced businesses to alter their strategies and seek new opportunities to grow. This was clearly the case at the 11th annual Domotex asia/ChinaFloor (DACF) as manufacturers started to aggressively turn to mainland China as an opportunity for sales. The reason? Despite a worldwide economic slowdown, China is still projected to grow 9% over last year. While down from its double-digit growth rates of previous years, Wolfgang Lenarz, senior vice president of DACF co-owner Deutsche Messe, said the fact remains that the country “still presents a great opportunity. Doing business in China is still a worthwhile endeavor.” The battle to gain sales from Chinese consumers was seen from both foreign manufacturers— large and small—and domestic suppliers that historically exported all their products to the U.S. and Europe. Along with China’s projected growth rate presenting an opportunity, the average Chinese consumer is actively seeking Western brands. It started with clothing, jewelry and other fashion items, but as worker income continues to rise and more people enter middle class status, consumers are looking to spruce up their indoor living environments with “famous, well-known brands.” Joe Williams, vice president of international and distributor sales for Beaulieu of America, pointed out, “Branding means a great deal to the Chinese.” While the company does business in 75 countries, he noted the carpet mill is expanding its presence in mainland China. “We now have 15 cities covered where our product is represented and we’re growing. Our residential line is starting to make meaningful penetration as consumers here tend to want better-end goods.” Mike Chappell, Mannington’s international manager, concurred, noting the company’s moniker is more known in the region “than one would think.” At DACF, “We are hearing many good things about our products with people walking into the booth asking us to show them what new things we have.” He added the show is “a great opportunity” for the company to see all its Asian customers and partners in a single location. “Otherwise, we’d have to fly around the world to everyone. So this is a good platform to get it all done in one shot.” Greg Gottlieb, Armstrong’s Asia Pacific senior vice president/managing director, said the company’s strong brand name kept the mill’s spacious booth busy. “We’ve had a great deal of interest, especially from Chinese distributors and retailers who are wanting to carry our products.” He noted Armstrong “just started” penetrating the Chinese market with 25 franchised stores (Editor’s note: In China, retailers typically carry products from one manufacturer, similar to car dealerships in the U.S., and work hand-in-hand with mills in terms of store design and layout) With the current stock of retailers enjoying positive results, Gottlieb said Armstrong plans to grow its network to a couple of hundred in the medium term. “This is our first foray and, right now, it is mostly with wood and a little laminate.” Even small companies are eyeing the Chinese market more. Rug maker Amici International announced the opening of its first permanent showroom here. The 1,300-square-foot, “to-the-trade only showroom” will target the commercial and residential development currently under way in cities throughout Asia, said Jeff DeSantis, president. “Our business continues to grow rapidly in this part of Asia, and we needed this showroom to better serve our customers here in China.” And, recognizing the slowing down of business in other parts of the world, companies such as Chinafloors have, for the first time, started looking to the domestic market for sales. The maker of Lamett wood and laminate flooring recently purchased the Marryland name, a well-known brand in China, to allow it to begin selling products to the Chinese consumer. Starting out with 600 storefronts, the company plans to quickly expand to 1,000. “Our business remains strong in the U.S. and Europe,” explained Thomas Baert, president of Chinafloors, “but we also believe in the local market. Brands are very important in China. The Chinese are willing to pay more for a product that has a story and a known brand.” While manufacturers look to gain a greater presence in China, DACF also provided an opportunity for buyers. In fact, the market once again proved its value in this area. Even though overall attendance was down nearly 6.4%, more than 13.5% of 36,986 trade visitors came from a foreign country with the U.S. ranking not only in the top five but the only non-Asian country among them. For wood producer A&W, which sells under the Ark label in the U.S., DACF remains “an important show for the world market,” noted Laurie Sanfilippo, marketing manager. “Despite the economy, there are still a good number of North American customers here—and they mean business. It’s similar to Surfaces; they were there to buy not look.” L.A. Train, president of Winton Tile’s U.S. distributor, Swift-Train Co., said the U.S. remains the company’s largest of the 42 markets it serves, and that activity at the resilient maker’s booth was “busier than we anticipated.” Attributing it to the family’s business philosophy of providing the right products for each customer, he noted, “there are always opportunities—even in a down market. You just have to capitalize on them when they get presented to you.” |