Year 2007, which is going to pass away soon, is a tempest-tossed year for China’s wood flooring industry: the failure in the 337 patent infringement action, the ongoing ITC 332 wood flooring and hardwood plywood investigation, the readjustments of export rebates, the appreciation of RMB, the cost hikes, just to name a few. But we can also see the progress of China’s wood flooring manufacturers in tempests; some have stood more firmly though some fallen down. In the 2007 China wood flooring market, there were five distinct phenomena, according to Yuan Yide, Manager General of Wellux Flooring.

In 2007, some solid wood flooring manufacturers included laminate flooring into their business while some laminate flooring oriented producers entered the field of engineered flooring in a high-profile manner. For instance, Guangdong Nature Group, a leading solid wood flooring and engineered flooring manufacturer in China, announced its large-scale entry into the domestic laminate flooring market this July by coming out with a new brand—“Nature First Space”; Power Dekor Group, a pioneer and leader in China’s laminate flooring field, is now moving towards “a comprehensive wood flooring manufacturer” by carrying out a “troika strategy”—laminate flooring, multilayer engineered flooring and 3-layer engineered flooring—through the cooperation with Sweden Kährs Wood Flooring.

 

As a matter of fact, raw materials always play a key role in solid wood flooring industry. However, the timber supply for solid wood flooring production can not be guaranteed with the price having kept surging since last year. Consequently, the business of solid wood flooring seems harder and harder to do and there may be only a few customers who can afford the product in the future. Besides, since the consumption capacity in medium and small cities is much weaker, it will be necessary to diversify the products if a manufacturer wants them to be sold across the whole country. In fact, laminate flooring is just such a good choice, for its price is much lower compared with solid wood flooring. By analogy, some companies mainly manufacturing laminate flooring in the first place, have begun to produce 3-layer or multi-layer engineered flooring to replenish their profits due to competition. Thereby a conclusion can be reached that laminate flooring will be intended for popular consumption; engineered flooring for the middle class; and solid wood flooring for the wealthy at least in the next three to five years.  

 

Franchise distribution once was popular in China several years ago, when the competition was much less intense and there were not so many brands in the market. But with years’ development of China’s wood flooring industry, some market conditions, environment, and competition all have changed. The inputs of some provincial franchisees can no longer meet the demand of the rapid development. Given they have enough funds, they may be afraid of possible risks involved in investment, but, on the other hand, the business can hardly gain ground without sufficient inputs of fund. As a result, this ambivalence will distort the actual performances of the franchisees.

 

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