2012 Coating Industry Goes Down on the Down Market

Year-on-year sales volume and price of the paint market were much lower than last year, and the top ten paint brands Xiaobian concluded that this year's fortune was discovered. The reasons for the decline in paints are probably twofold. First, the rise in building materials and the rise in the price of coatings and paints; the second is the saturation of urban demand and the stir-up of rural markets.

The continuous development of the paint industry and its reputation as a “world factory”, China’s manufacturing industry is mostly mixed. On the one hand, it affirms the importance and status of the Chinese market. On the other hand, it also means that products are mostly in the low-end area. . For China, the process of “urbanization” does not solve the problem of low peasants’ spending power. At the same time, fast-food consumption psychology has also spurred the city's low-end market, such as the cottage mobile phone, to cater for such a low-port flavor. This is why the “cottage” has been rampant in recent years, which has caused the brand's mainstream complications. At the same time, the Chinese paint industry did not escape the "low end" curse. The low price is the biggest advantage of low-end products, so it is easy to open the market and capture the hearts of consumers in the low-end market, which can help companies to open the market well and return funds in the initial stage. It can be said that the future low-end paint market is a game of risk and opportunity. With the development of the company, if it is still intoxicated in the low-end market, then it is likely to be a trap, and it may be accidentally left in the mud of the “low-end”.

Here we look at a set of data: First, the price of paint coatings has dropped dramatically. According to survey data from the National Bureau of Statistics, in 2009, the home improvement market in Hebei Province and Yinchuan City had a good momentum of sales, and the prices of most housing and decoration materials all increased compared to the previous year. Among them, the price of building houses and decoration materials in Hebei Province increased by 1.9%, while the paint dropped by 3.2%. The price of building houses and decoration materials in Yinchuan City rose by 1.9% from the previous year. However, the price of paint decreased by 1.6% over the previous year. In other words, after the collective price increase in the renovation of building materials, the paint and coating market has seen a concentration of “diving” in 2009.

Second, the low-end market, which is mainly in rural areas, was heated up. Recently, the news that “building materials go to the countryside” has been written into the “Central Document No. 1” has been reprinted by quite a number of media. Some media have stated that “building materials go to the countryside” is another step toward expanding domestic demand after “bringing home appliances to the countryside” and “cars to the countryside”. The major initiatives of many painters also believe that a broader rural market will be developed through the “going to the countryside”. Of course, when it comes to the countryside, prices naturally have to be “down”. In fact, the prices of first-line brands such as Dulux, Dufang, and Nippon's more comprehensive “net taste” and “to formaldehyde” coatings are much higher than those of the third-line brand products.

In the case of limited purchasing power in rural areas, a prominent contradiction is difficult to solve: high quality, high prices, low-end rural consumers can not accept; low-quality, low prices, paint companies can not protect the profits. Has it been appropriate for paint brands with the goal of "high-end" to move to low-end markets? Opponents are mainly worried that this will damage their high-end image for the first-line paint brands. They also worry that they will spend a lot of manpower and material resources to win some low-end market, but they will lose their dominant position in the high-end market. However, most of them agree with the opinion that wisdom is that, on the one hand, because the paint market in China is becoming popular, consumers of architectural coatings will also be concentrated in the low-end and middle-end markets. Appropriate attitudes should be lowered, and it is advisable to enter the middle and low-end market. On the other hand, for many front-line coating brands, a strong brand image and years of accumulated technology are all advantages.