The wallpaper industry in China has experienced a rollercoaster journey over the past two decades. In 2000, it entered a bull market, and by 2009, there were over 40 production companies nationwide. This number grew to more than 90 in 2010, and by 2011, there were around 230 manufacturers. While the industry seemed to be booming on the surface, beneath the surface lay serious challenges—overcapacity and fierce competition.
According to data, the current domestic demand for wallpaper is only 160 million rolls, while the total capacity exceeds 900 million rolls. This imbalance suggests that many companies are struggling to stay afloat. The market has become highly saturated, leading to aggressive price wars and cutthroat competition. As a result, some companies have found it difficult to sustain themselves, and the industry's future remains uncertain.
Understanding the channel hierarchy is crucial for analyzing the industry’s dynamics. Typically, products move from manufacturers to dealers, then to retail terminals before reaching consumers. Along this chain, companies often rely on sales promotions and brand awareness to drive purchases. However, many firms in the wallpaper industry focus only on expanding their dealer networks, without considering long-term strategies or terminal-level operations.
A significant issue is the sheer number of brands. With over 1,000 brands among just 230 manufacturers, many companies create multiple brands to attract different dealers. This strategy, however, doesn't necessarily lead to differentiated consumer experiences or strong brand identities. Instead, it reflects a short-term approach aimed at maximizing distribution rather than building lasting value.
The low entry barrier in the industry is another concern. While some see it as an opportunity, others argue that it leads to market instability. Companies that control more nodes in the channel chain—such as managing retail terminals or offering direct services—can create higher barriers for new entrants. Those who only operate as manufacturers face greater risks due to the lack of control over downstream operations.
As the market matures, the importance of the terminal becomes more evident. Manufacturers are now realizing that controlling the retail end can give them a competitive edge. Some are investing in franchise models, direct-operated stores, and terminal management systems. These efforts help build brand loyalty and improve customer satisfaction, which are essential for long-term success.
Despite these developments, the industry still faces challenges. Consumer demand remains limited, with many viewing wallpaper as a luxury rather than a necessity. High prices, inconsistent quality, and poor after-sales service continue to deter potential buyers. Additionally, the complexity of installation and maintenance further complicates the consumer experience.
To overcome these obstacles, companies must focus on improving product quality, reducing costs, and enhancing customer service. Building strong consumer brands is also key. Unlike other home improvement sectors, the wallpaper industry lacks clear consumer recognition. Brands need to communicate their values and unique selling propositions effectively to gain trust and loyalty.
In addition, digital platforms offer new opportunities. E-commerce, social media, and online content marketing can help reach a wider audience and build brand awareness. Companies should invest in interactive websites, design tools, and customer engagement initiatives to create a more immersive shopping experience.
Ultimately, the future of the wallpaper industry depends on its ability to meet consumer needs and adapt to changing market conditions. With the right strategies, the industry can grow and thrive, even in a competitive environment. The key lies in innovation, customer-centric approaches, and long-term vision.
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