Overall, home and garden experienced declining current value sales in 2020 as a result of the pandemic due to closures of store-based specialists, a lockdown in Q1 2020 which restricted consumers’ movement outside of the home, and increasing price sensitivity as a result of decreasing disposable incomes which forced many consumers to prioritise their expenditure. The halt of the construction industry and consumers’ major renovation projects during the initial lockdown due to social distancing measures also subdued demand for big-ticket items, particularly within home improvement where bathroom and sanitaryware, floor covering, and kitchen sinks tend to require the installation services of professionals.
There was a strict lockdown imposed in Hubei province in China from 23 January to 8 April, while other provinces imposed different social distancing policies and partial lockdowns. Movement in and out of the worst-hit provinces was banned until 4 February, with 14 days quarantine required for those moving between provinces.
Home and garden remained a highly fragmented competitive landscape where smaller players under “others” continued to dominate value sales in 2020, due to the low barriers to entry and low levels of consumer brand-awareness in several categories, which supported the presence of a large number of small local players. However, a trend which had already started to emerge towards the end of the review period was strengthened during the pandemic; the further consolidation of leading players, including IKEA (China) Investment Co Ltd, Oppein Home Group Inc, Jason Furniture (Hangzhou) Co Ltd, Man Wah Holdings Ltd and Alishunlin Furniture Co Ltd, with the latter three continuing to record impressive double-digit current value growth.
Store closures for the dominant distribution channel of home and garden specialist retailers deemed to be non-essential during the initial stages of lockdown in addition to social distancing measures heavily hampered consumer traffic and sales in Q1 2020. As home and garden in China is heavily reliant on offline channels due to the in-store experience with many consumers appreciating both the advice of sales assistants and preferring to physically see and touch certain products to gauge quality prior to making a purchasing decision, e-commerce was unable to offset the huge decline in sales for many categories during lockdown such as furniture, bathroom and sanitaryware, and floor covering.
Home and garden is predicted to make a full early recovery over the forecast period, with value sales (at constant 2020 prices) set to surpass pre-pandemic levels by 2022. Products which suffered significant declines in 2020 due to store closures, and the postponement of major home renovations which required professional installation services are predicted to quickly recover, as restrictions are further relaxed, including home improvement categories such as bathroom and sanitaryware, kitchen sinks, home paint and floor covering which are set to record particularly impressive growth rates over 2021.
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