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In 2012, real estate regulations were more stringent than expected. This year, furniture stores faced significant challenges, with rising rents and increasing pressure on store operations. The industry experienced a period of transformation and uncertainty. However, looking back at 2012, some traditional furniture stores managed to achieve remarkable growth and thrive despite the difficult conditions.
During the first half of 2012, the furniture market was under immense pressure. The central government continued to emphasize the need for strict real estate regulation, aiming to curb speculation and investment demand. This policy shift significantly impacted traditional furniture stores, as reduced housing demand led to lower sales. Additionally, factors such as the European and U.S. economic crisis and fluctuations in the RMB exchange rate worsened export performance, leading to further instability in the home building materials sector.
One notable example was Beijing's Bafanglong Lighting City, which had operated for 12 years before closing on March 31, 2012. It later transformed into a specialized market for aquariums, calligraphy, and paintings—an unusual move in the industry.
The trend of store closures continued throughout the year. Stores like Blue Oriental Lishuiqiao, Jimei Home Wanjia City, and new outlets in Hangzhou faced significant difficulties. Even Home Depot shut down its remaining seven stores in China by September 2012. This period saw a wave of bankruptcies and exits from the market.
According to industry data, sales of large-scale enterprises in the building materials sector reached 2.5 trillion yuan in the first half of 2012, showing a 16% year-on-year increase, but the growth rate dropped by 25.2 percentage points. Sales in furniture and building materials stores fell by 7.66% during the same period—marking the first decline in five years. Despite these challenges, many stores remained committed to their development strategies and began exploring new opportunities in the second half of the year.
In the second half of 2012, some furniture stores turned their attention to second- and third-tier cities, where demand was more stable. They launched promotional activities and even explored e-commerce platforms to reach new customers. The transformation to online sales, however, was not without challenges. Issues such as delivery, installation, and after-sales service initially hindered progress. But as companies adapted, they found success. For instance, Melaleuca, an online furniture brand, expanded its presence by opening offline experience centers in major cities, creating a seamless blend of online and offline shopping experiences.
Sales data during the Golden Week holiday showed a significant increase compared to the previous year, and the "Double 11" shopping festival also demonstrated strong performance. This breakthrough in furniture e-commerce brought new hope to traditional stores. Surveys revealed that younger consumers, especially those born in the 1980s, were increasingly turning to online furniture shopping due to the variety of options and improved user experiences. Many online furniture stores now offer offline experience centers, ensuring better customer satisfaction and reliable after-sales support.
As first-tier cities struggled under property market regulations, second- and third-tier cities became a promising market. These areas were driven by basic housing demand, and their purchasing power for furniture products grew steadily. Major brands like Yifeng Furniture and Fuzhidao started expanding into these regions, hoping to tap into this growing market. Government policies also supported the development of these cities, aiming to boost domestic demand and create a favorable environment for traditional stores.
While traditional furniture stores will continue to face regulatory constraints, the future looks promising. Consumers are becoming more rational in their purchases, and store operations may evolve accordingly. No matter the direction of change, finding a suitable development path is essential for long-term success.