Building on ‘Scandinavian Style’

Scandinavian furnishers ride on Chinese popularity in booming property market

China’s home furnishing business, dominated by “Eurostyle”, is set to ride on the country’s booming property market.

Chinese homeowners’ preference for European furnishings, ranging from furniture, toilet fixtures and kitchen systems, is creating huge opportunities for European producers and suppliers, with many European brands such as Ikea, Gaggenau and Hansgrohe becoming household names.

Home designers say European home furnishing manufacturers will also step up their presence in China as their home markets are depressed by the constraints of government austerity programs. So far, more than 200 European furniture brands have established branches in China. Of these, 20 or so are well-established brands in their home markets. These include Republic of Fritz Hansen from Denmark, Vitra from Switzerland and B&B from Italy.

These European high-end furniture companies are welcomed in first-tier Chinese cities including Shanghai and Beijing. They are also gaining popularity in second-tier cities in prosperous coastal provinces including Hangzhou in Zhejiang province and Qingdao in Shandong province.

In a furniture exhibition in Ningbo, Zhejiang, a lotus-shaped dining table that received the golden award in the 2007 Milan Furniture Fair was sold within 30 minutes after the opening of the exhibition, for a stunning price of 750,000 yuan (85,327 euros).

Despite the promise of brisk sales and fat profits, European furniture companies are known to take a rather “leisurely” approach in entering the Chinese market. After opening its first outlet in Shanghai in 2000, Avarte, a leading Finnish furniture company, spent the following five years in the research and development of new products for Chinese consumers.

“Actually, our company was not making much profit here during the six years starting from 2000, the year we first entered the Chinese market. But sales have been growing significantly since 2005. We sold a total of 60,000 chairs in 2010, six times the sales we made in 2005,” says Avarte China marketing manager Ni Shuangquan, who has been working with the company for more than six years.

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