Furniture to the countryside drives concept stocks up

For example, during the period from 2007 to 2013, my country's home appliances to the countryside policy was promoted nationwide, and the cumulative amount of subsidies was as high as 90 billion yuan, which drove the retail sales of my country's furniture market to continue to rise during the period from 2008 to 2011. Due to factors such as low product coverage and changes in the real estate market, the policy of home appliances going to the countryside from 2019 to 2020 has a limited effect on driving market consumption, but the growth rate of retail sales in the market improved significantly in 2019.

The home appliance and furniture subsidy policy is based on the high penetration rate of home appliance furniture in rural areas in China, and more to support consumers to "update" and "replace" furniture. Last month, the policy proposed to promote the consumption of home appliances and furniture, and encourage qualified areas to provide subsidies for the elimination of old home appliances and furniture and the purchase of green smart home appliances and environmentally friendly furniture. In addition, in February this year, the "Opinions on Comprehensively Promoting Rural Revitalization and Accelerating Agricultural and Rural Modernization" mentioned that "promoting the upgrading of rural residents' durable consumer goods" and "meeting the consumption upgrade needs of rural residents and attracting urban residents to go to the countryside for consumption".

In 2020, the domestic furniture market is in a downturn due to the impact of the epidemic. This action of furniture and home improvement to the countryside will, on the one hand, play a positive role in promoting consumption upgrades in the vast rural areas, and on the other hand will help stimulate the market that has been suppressed in the past two years. consumer demand.

In other words, times have changed, and policies have also changed the direction of consumption stimulation in the furniture market. Those furniture products that are more environmentally friendly, more personalized and functional may become the "vanguard" of this furniture-to-rural action, which is expected to drive the overall Growth in retail sales of furniture market.

Leading companies recover strongly, low valuation opportunities still exist

In the past few years, although the growth of the domestic furniture market has been far from the booming momentum of a decade ago. But for those companies with brand power, R&D strength and channel advantages, the domestic furniture industry still has "mines" to dig.

There are two main ways for these leading companies to grab market share:

1. The business is extended to more subdivided and complete products, and a line of integration of multi-category and large home furnishing that is in line with its own advantages is formulated.

The transformation of this model is mainly to meet the market demand for whole-house customization brought by the great wave of domestic urbanization. The improvement of the product portfolio is more conducive to expanding the one-stop home service demand for the post-80s and post-90s as the main consumer groups.

For example, the current product matrix of OPPEIN has covered household products such as the whole kitchen, the whole wardrobe, the whole bathroom and furniture accessories, while the Gujia Home Furnishing is evolving towards the path of "single product-space-whole house-lifestyle", both of which can Providing one-stop service for consumers, the comprehensive competitiveness has been significantly improved.

2. Maintain high-frequency innovation and make products more refined. For leading companies, continuous high investment can not only increase the added value of products, squeeze small and medium-sized enterprises with insufficient R&D capabilities, but also capture the "hearts" of young consumer groups with upgraded products.

Leading companies such as Oppai, Gujia and Sofia (002572.SZ) have increased their R&D investment in recent years, and more personalized and healthy mid-to-high-end products have continued to expand, supplemented by brand promotion that is closer to market trends. , driving the growth of new product sales.

Judging from the third quarterly report, the upgrade of products and the expansion of categories have driven the high growth of the performance of leading furniture companies, and the performance is more significant than before the epidemic.