Home and Garden Specialist Retailers in China

PROSPECTS

Homeowners trade up while smart homes offer strong potential

Home and garden specialist retailers continued to see healthy growth in 2019, driven in part by consumers trading up. Not only are the younger generation of consumers looking for better solutions for decorating their houses, but manufacturers are also moving away from low-end to middle- and high-end production.

One-stop shopping concept takes hold

The new generation of Chinese consumers aspire towards improved living conditions with a unified decoration style. Instead of shopping for different elements at different stores, consumers are increasingly purchasing all the products they want for the whole home in one store.

Third- and fourth-tier cities offer strong potential

Demographic factors are likely to influence sales in the channel over the forecast period. For example, second-tier cities such as Chengdu, Xi’an and Wuhan have seen an influx of new middle-class consumers which should lead to a boom in home improvement sales.

COMPETITIVE LANDSCAPE

IKEA forms strategic cooperation with Xiaomi

IKEA (China) Investment Co Ltd maintained its lead in home and garden specialist retailers in 2019 with it not only providing a one-stop shopping solution for the home, but it is also perceived to represent good value. In addition to opening new stores the company is also looking to collaborate with local tech giants to help capture the younger generation of consumers in China.

Easyhome benefiting from Alibaba backing

The Easyhome chain of home improvement and gardening stores is backed by online giant Alibaba. The chain developed a digital platform with the backing of Alibaba through which consumers can buy products and order services, with this platform now linked to 284 Easyhome stores.

Local player Markor utilising multi-brand strategy to expand its reach

Markor International Home Furnishings Co Ltd is a local homewares and home furnishings retailer that saw robust growth over the review period. This group is expanding its store network across 100 cities as part of a multi-brand strategy.

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