By Matthew Spieler
SHANGHAI—Massive earthquakes. Powerful hurricanes. Countries struggling to survive economic collapse. Many would say the world is turning upside down. This is certainly so in the world of flooring— but unlike world events, it is for the betterment of everyone, it seems.

While China remains the most important sourcing market for all kinds of products (73% of the country’s exports end up in the U.S.), flooring including, there is an interesting trend that was played out among the 8.5 football field-sized halls that made up the 12th annual Domotex asia/ChinaFloor (DACF) here last month. Western-based manufacturers continue to see mainland China as a major opportunity for sales of products bearing their brand, while Chinese mills that have set up shop in the U.S. have seen their market share grow as retailers and distributors look for alternatives in this tough economy.

With both sides seeing favorable situations as the world’s economy overall seems headed in the right direction for the first time in three years, DACF once again became the center of attention as visitors from approximately 80 countries flooded the gates on opening day and continued to pour in throughout the three-day event.

Official figures were not available at press time, but show officials said nearly 20,000 attendees including many from the U.S.—from mills to distributors and importers—were present on the first day to see approximately 1,000 exhibitors that made up the more than 1 million square feet of exhibiting space.

Thurain Aye, DACF’s director, said “While pre-registration was up from last year, no one was prepared for the flood of people on the first morning. And overall, the show exceeded all expectations. It has become much more global in its attendance which is one of management’s objectives.”

One of the things attracting this global attention was the inaugural World Flooring Forum (WFF), an all-day conference that took place on DACF’s first day. Focusing on “Low Carbon Economies and Global Opportunities,” the event attracted over 500 people and included speakers from North and South America, Europe, India, and Africa.

“This was just a start,” Aye said in referring to WFF. “Overall, the meeting was considered a huge success, but there is a great deal of information that can be exchanged which will help the wood flooring industry and the world. We will most likely expand our topics for next year.”

Coming here

As noted, China remains a hotbed of sourcing for many companies. But it is no longer considered the place for low-end commodities, as mills have invested in technology and equipment that allow them to compete with products offering a higher value by combining unique looks and performance.

Philippe Erramuzpe, COO of USFloors, was not only meeting with current suppliers, he was searching the market for products with high looks “but without compromising quality. We need to fight the war and this is a good market to look for new ammunition.”

Aaron Priner, owner of CAP Carpet in Wichita, Kan., called his first trip to DACF “amazing. I loved the energy I felt in its halls. There was a huge assortment and rich variety of products available for purchase.”

While the struggling U.S. economy has taken its toll on companies throughout the selling chain, executives from the U.S. divisions of Chinese owned mills said the recession has actually helped them grow.

“The crisis has been good for us,” said Perry Coker, president of Lamett, North America. “The status quo is no longer accepted and it’s helped us gain share.”

Thomas Baert, president of parent company Chinafloors, added the manufacturer sold 1,500 displays just at Surfaces and expects to have national distribution before year’s end. “The economy opened people to new ideas; they realized they have to try different things. But you still have to make sure you supply them with quality products and help educate their salespeople to understand they can make more money on our products.”

Ira Lefkowitz, president of Ark, the U.S. division of A&W Group, one of China’s largest wood manufacturers, said continual investment into North America has allowed the company to build market share. “In this bad economy, people are looking for value and because we are a vertically integrated company, we can offer quality and price.”

With five warehouse/distribution facilities around the U.S., he added, Ark is positioned to help American retailers earn more profits. The company will be expanding on its success in the wood market and will soon introduce a comprehensive laminate line, Tru-Craft. It will have about 30SKUs in 8mm and 12mm constructions and feature the Uniclic locking system.

Pete Ciganovich, executive vice president and co-owner of Lamipro, said the company is up 28%, which is why DACF is important. “The purpose here is not so much for us to meet with customers—we use Surfaces to work with our dealer network— rather it is to improve our business structure in order to ensure we help our retailers turn a profit.”

As such, he said DACF allows the company “to reset our styling and broaden the base of our product line. We want to bring additional value to our aligned dealers and make them extremely competitive with the Lamipro label. If they make money, then we make money.”

Going there

Last year, FCNews called attention to the fact a growing number of Western manufacturers have started to aggressively turn to mainland China as an opportunity for sales. This was further emphasized this year as China’s market—actually most of Asia—has not felt the full brunt of the recession as much as other parts of the world.

“The Asian market is not down like the rest of the world,” Aye noted. “While disappointing to the Chinese, their 10% growth in GDP this year is the envy of other countries. The growing domestic market in China has shifted some of the focus from being a low cost supplier and exporter to the world to the largest opportunity for global manufacturers to supply. This change will continue over the next five years with the continued growth of China’s consuming middle class.”

He is not just touting PR rhetoric. By China’s economic standards, there are 350 million people now considered middle class status. Plus, in the next decade, 325 million people are expected to migrate from rural areas into cities. And many of them will be wanting to decorate their new surroundings. (By comparison, the U.S. population in 2008 was estimated to be just over 304 million.)

One of the companies making headway in the Chinese, and Asian market as a whole, is Mannington. Mike Chappell, international manager for the commercial division, said the strength of the company’s overall package of products and services is what allows it to be successful. “Our certifications, from CRI to LEED, are recognized as leading indicators of quality and environmental friendliness, even in India. Many companies in this region can produce great products, but doing so with all the bells and whistles is second nature to us.”

On the residential side, the company has partnered with Elegant Living, one of the country’s leading wood brands, to sell the Mannington brand in its stores. The Chinese mill dedicated a large swath of its booth to Mannington branded products.

“Elegant is doing a very nice job with our brand,” noted Ed Duncan, Mannington’s senior vice president of residential marketing.

While Beaulieu of America chose not to exhibit at DACF, the company, which already has a presence in high end retail outlets in 44 of China’s cities, set up shop 10 minutes from the event at the Parkview Hotel with a tailor-made display and product line under its successful Bliss brand.

Christopher Champlin, international regional manager, said the company expected to have about 100 of the units out in the market, with each one holding 700 SKUS in 44 Bliss products. “The Bliss image translates the same here and with the way this country is growing, both economically and in design sophistication, we expect the brand to be a success like it has in the U.S.”

Part of the reason is that “what we learned from already being in stores in China, led to the design of the display and how the products are named and presented.”

Joe Williams, Beaulieu’s vice president of international and distributor sales, summed up the view of many U.S. manufacturers now selling in China: “We are taking a long-term view to grow our brand and image. Housing is going to continue to grow as more people migrate to the cities. With so many people wanting to create a better future for themselves, the opportunities are currently endless.”