Nowadays, with the economic development of urbanization, people living and working in first- and second-tier cities are under increased pressure, and they are burdened with mortgage payments, living expenses and other heavy pressures. As a result, a large portion of the spending power has not yet been released. In the sinking market, people live under relatively less pressure, and consumers have abundant consumption power, upgraded aesthetic concepts, and are faced with an information explosion. Against this backdrop, consumers can easily access and recognize more quality products and concepts. The emerging young group is highly educated, quick to accept new things, and has an increasing demand for quality products.

However, the sinking market with low product concentration and dominated by low-recognition brands does not match the growing lifestyle demands of consumers. High-value, high-service and high-quality products and brands can hardly be found in this market, which contains huge growth potential. As a result, headline brands such as Kinhom have also carried out a downward layout.

The sinking market is becoming the "big cake" targeted by the head brand, and the home giants have locked their eyes on the sinking market. The traffic war between enterprises set off unstoppable.

During the 23rd INTERNATIONAL FURNITURE FAIR CHENGDU ("IFFC"), which will be held on June 15-18 this year. Kinhom Furniture will bring its new insights into the market while displaying its brand and product strength.As the second quarter of 2023 will soon come to an end, how will Kinhom open a new layout in the sinking market in the era of inventory? We interviewed Mr. Zhai Qizhi, General Manager of Kinhom Furniture Group, and shared his insights on the home furnishing industry.

In the post-epidemic era of 2023, the market showed signs of rebound in the first quarter. However,in the second quarter, as affected by real estate, the turnover of primary and second-hand houses was not optimistic, and traditional home brands faced a severe test in terms of traffic. The incremental market dominated the real estate market in the past golden 20 years, but now the competition in the stock market is increasingly fierce.

Mr. Zhai said that according to the data of Kinhom in the first quarter, the incremental volume of second to fifth-tier cities is very large, and the sinking market has become a growth point this year.From a cross-industry perspective, many up-and-coming brands in the catering industry have shown strong competitiveness in the sinking market, which proves that the market demand exists, only that it has not yet been met.But being in the sinking market does not mean offering cheap products and engaging in price wars.

In addition, e-commerce has experienced a decade of golden high-speed development, and has entered a highly competitive red sea market. More and more merchants are stationed on e-commerce platforms, and the structural cost of traffic size is getting higher and higher. At present, various platforms such as Tiktok, tmall, jingdong, etc. are engaged in price wars, and consumers are downgrading their consumption under the pressure of the existing economic environment. Therefore, for the sinking market, cost-effective products are the direction of current efforts.

Looking back at the history of brand development, Kinhom Furniture was founded in 1984, is one of the earliest private home furnishing enterprises in China. The company is subordinate to the Xiangjiang Group. relying on the group's resources, Kinhom quickly occupy a leading position in the domestic furniture industry, with nearly 80,000 square meters of modern factories. With modern standardization of the furniture production line, its annual production capacity of mattresses reached more than 1 million. The sales network of Kinhom covers nearly 300 cities across the country, and its has provided quality sleep products for 30 million home users.

KINHOM Factory

In the current context of many companies in the development of all categories, customization of the whole package, Kinhom prefers to focus on the field of upholstery."The soft body industry can be both fine water and deep plowing.In the past two years, in the context of the real estate winter, the most affected is the building materials industry, followed by customized furniture. And I think there is still room for 4-5 times growth in China's mattress market in the future."

With the rise of the younger generation, people's demands for the appearance and comfort of furniture are increasing. With the increasing acceptance of mattress products in the existing sinking market, the consumption concept of mattresses is gradually changing. Mr. Zhai believes that focusing can create a better reputation.

In the past, although many brands adopted a variety of models such as traditional stores and independent stores, there were price divisions and product differences between online and offline to ensure the survival of dealers. The new retail brands have broken the curse of traditional brands that it is difficult to achieve the unification of online and offline prices.

"We held a conference with our dealers this year, and the focus this year remains on supporting offline business, while online is more about providing empowerment and conducting activities such as branding, live streaming and online attraction."Currently, many young people's view of consumption is to buy first and try later, but after conducting a lot of market research,we found that Kinhom's target consumer group is more focused on the sense of experience, so the company will continue to deepen and lay out its offline outlets this year.

However, the products in the sinking market is not a copy of the original products in the first and second tier markets, but has its own unique consumption and use scenarios. In view of the above considerations, companies need to deeply understand consumers, continue to product innovation, and improve the local service, optimize the consumer experience, so as to improve brand loyalty and grasp the opportunity.

Mr. Zhai said that Kinhom will also launch a new retail model, pursue the same price in dual channels, and cooperate with local like-minded dealers to develop new product series for the sinking market.In addition to this, Kinhom will also open up the product line to solve the problem of differences between online and offline from the root.

From the very beginning of its establishment, Kinhom has taken "creating a cozy home" as its core concept, and with its innovative product structure and quality assurance, it is committed to creating a better sleep culture and home environment, so that everyone can embrace a quality life."As a national brand, our goal is to meet the rigid demand of the majority of the population. Good products need to meet the following conditions: strong usability, high value, and affordable price. Many up-and-coming brands are able to perform well in the market because their product experience and design match the consumption view of young people."

Furthermore, consumers are not only concerned about price and appearance, but also focus on the comprehensive dimension.Therefore, brands need to form a brand "pull" in the comprehensive dimensions of product power, value, cost-effectiveness and service. At the terminal, it should ensure that store decoration and product appearance meet aesthetic, practical and functional needs and are affordable to consumers.In short, it has to provide a good one-stop service from pre-sale to after-sale to become a better brand that consumers would like to choose.

In the market research, Kinhom found that the community will be a huge market in the future. "This market has been cultivated under the influence of the COVID-19 in the past three years. But now, the relationship between properties and owners has become closer, and owners have become more dependent on their properties."

Meanwhile, with the development of community group purchase and community stores, consumers have higher requirements for the convenience of the path to the physical store.Kinhom has discovered this trend and experimented with two sales modes in the community: one is the traditional community store, opening an experience store of about 100 square meters and constantly updating the products; the other mode is carry out in-depth cooperation with the property to achieve joint marketing and improve the service experience, and no longer take the traditional marketing model of property soliciting - store transformation.

Mr. Zhai stated that the feasible mode explored by Kinhom is the in-depth cooperation between the brand and the property, providing the owners with services such as furniture replacement, cleaning and maintenance, etc. Through the implantation of pre-service, consumers first experience the quality of the service and attitude of the brand, so that consumers have a certain degree of awareness of the brand, and then recommend packages or products according to the actual needs of consumers.

Kinhom also sets up front warehouses in properties to provide products such as student desks and chairs, dining tables and chairs, etc..It offers 7-10 days of free trial, and only when consumers are satisfied with them will they make purchases.We organize targeted activities with properties every month or every week, such as spinal care for teenagers, sleep care for the elderly, and knowledge training for students, which has yielded good results.

In Mr. Zhai's opinion, consumers nowadays have their own cognition and viewpoints. As they are highly educated and have been exposed to high-quality products, they have the ability to judge what is good and what is professional, and they don't need any brand's "market education". Therefore, if Kinhom displays its products in an objective and professional way, and serves them in a sincere manner, consumers will be more willing to accept and trust this brand, and naturally choose Kinhom on their own initiative.

This year, Kinhom will participate in the 23rd INTERNATIONAL FURNITURE FAIR CHENGDU, and will also focus on the development of the southwest region, the layout of Sichuan, Guizhou and Yunnan and other places. Mr. Zhai believes that Chengdu has a pleasant climate and rhythm of life, and the people in Chengdu and its surrounding areas are active in accepting new things. In these regions, the demand for homes is very large and the market is thriving, with more market potential than in Eastern China. "I believe that the southwest region will be an incremental market with great potential!"