Italy decided to boost its export of design and furniture products towards the Chinese market, with an official trade promotion programme “La Cina Arreda Italiano” organised by the Italian Trade Commission and the main industrial associations (Federlegno/Arredo – COSMIT, Confartigianato, CNA). The programme focuses on interior design products, one of the traditional Made in Italy excellence segments, together with automotive, food & wine and fashion.
The programme started in February with a Media Tour through the industrial districts in central and northern Italy (Piemonte, Lombardia, Marche), with more than 25 Chinese media representatives (CCTV, Dragon TV, Domus, Furniture Today, Interior Design China, and others). A trip through major Italian brands (Gessi, Serralunga, Poliform, Missoni, Scavolini) to understand the quality key factors of top design products: tradition, excellence, quality.
A few days ago (March 6-8), the trade promotion programme was introduced to more than 200 Italian companies, media and design professionals, with a focused forum in Milan and Florence.
It’s been a unique opportunity to compare the challenges perceived by the exporting companies and the expertise of Chinese leaders deeply focused on the market habits. Top businessmen and professionals like Noble House (a major retailer of international brands) and Dong Yi Ri Sheng Decoration Group, as well as chief editors of the main design magazines (Domus China, China Real Estate, Furniture Today) were in attendance.
The speakers highlighted the strong role of Chinese furniture producers: China is the leading global manufacturer with an overall supply value of USD183 billion, and an annual average increase of 16% during the last five years (Italian Trade Commission figures).
Local supply focuses on medium and bottom level products, whilst spreading a growing competition in the internal market due to the lack of export chances and the slow-down in global demand.
Therefore international brands face good opportunities and fierce competition in the luxury segment, representing almost 3% of the overall market value, with top companies from Italy, Germany, Spain and USA.
Chinese leaders explained how market access channels are determined for the luxury segment, mainly focusing on:
- Multi-brand stores (Easy Home, Macalline, Da Vinci) that manage both foreign brands and top-level Chinese ones
- Mono-brand stores and showrooms (Natuzzi, Ligne Roset, Bo Concept), mostly for long-term marketing strategies, and strongest brands
- Luxury shopping malls (Shanghai Jibai City Plaza, Beijing Cofco Plaza, Hangzhou Tower, Chengdu Hongda)
Contract channelling is also an interesting way to access the Chinese market, with growing opportunities mostly connected with public infrastructures like airports and train terminals. These venues are typically frequented by high level consumers (especially in VIP lounges). These transport hubs are also in the middle of ambitious development and refurbishment plans: in China there are 192 airports at present, expected to become 244 by 2020. The main train stations also will be refurbished, involving cities like Xi’ani, Xiamen, Fuzhou, Harbin and Shenzhen.
Noble House then introduced a very interesting market research that involved more than 1600 high level consumers in China, that expressed the following key strategy factors:
- Average life of interior design products is below 7-8 years (5 years for sofas and related products)
- Purchasing process lasts 4 months
- Over 70% of consumers visit 4 different stores during the process
- Both ladies and gentlemen are relevant decision makers
Purchasing key causes are mostly connected with new home interior designs, and the main information source is the opinion of relatives, friends and other trusted consumers (in deep connection with Chinese culture and tradition). Other information sources such as magazines and in-store info are less relevant, especially in second level cities.
The trade promotion programme reported a widespread media coverage in Italy, involving top newspapers and televisions (RAI, Il Sole 24 Ore, ADNKronos, La Nazione) and will continue with direct promotional actions in China. The main target is to promote Made in Italy excellence focusing on technology, quality and R&D achievements, and to tackle old-fashioned and partial perceptions of an Italian product mostly connected with classical styles.
- The Italian fashion capital being led by the Chinese (bbc.co.uk)
- China consumer: driven by social media, but not westernized – Tom Doctoroff (chinaherald.net)
- Volvo appoints new interior design chief (caradvice.com.au)
- Renault’s growing share of emerging markets shows that low-end cars still need solid brands (qz.com)
- MARC FABER: Investors Should Be Worried About China’s ‘Colossal Credit Bubble’ (businessinsider.com)
- Marc-Michaels Interior Design, Inc. Presents Central Florida’s 2013 New Home Design Trends (prweb.com)
- Eight ways China is changing your world (chinadailymail.com)