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The development of the cabinet industry is not a smooth road, transformation is the first priority

by:Hench Hardware     2021-08-26
As we all know, the cabinet industry is an industry that relies on the development of the property market. In recent years, the real estate policy has been frequently regulated, and the cabinet industry, which is the downstream of the industrial chain, has naturally been greatly affected. Especially in the context of the decline in the transaction volume of the commercial housing market, the sales volume of the cabinet industry has also declined, and many cabinet companies have fallen into a development dilemma.

   Relying on the development of real estate, the cabinet industry is affected

  In the cabinet industry, companies backed by large real estate development projects are ubiquitous in the market. In the past few years, the boom in real estate has led to the development of a large number of cabinet companies. Cabinet companies have made a lot of money by providing mid-to-high-end decoration services for these large projects. But now, due to policy adjustments, real estate investment demand has been suppressed, high-end residential projects are facing severe situations, and some large projects have even been forced to suspend. This will undoubtedly have a huge impact on the cabinet industry relying on real estate development.

  The production cost of cabinets keeps rising, and profits decrease accordingly

   But at present, production costs have increased, while profits have decreased. The bigwigs of many cabinet companies have obviously felt a kind of production pressure of 'not paying the bills'. In recent years, with the rapid rise in prices, the cost of raw materials and labor for production have also risen, and cabinet companies are facing huge expenses and pressure.

   Some cabinet companies said that with the introduction of the minimum wage standard, workers’ wages have been rising from transportation, handling to installation, and at the same time the prices of raw materials have been rising. The price of the product will naturally be high, but the distributors engaged in the cabinet industry will face the question of whether the selling price will rise. If it does not increase, there will be no profit margin or even 'unprofitable'. If it increases, it is likely to face the problem of reduced sales. After all, cabinet products are not necessities of life, and consumers have the right to choose whether to buy or not. Therefore, it is a dilemma for dealers to increase or not to increase prices.

  Intensive competition in the cabinet industry, enterprises need to accelerate transformation

   'Siege' said: 'People in the city want to go out, people outside the city want to come in.' It was originally used to describe marriage, but it also applies to the cabinet market today. Many laymen see that the 'meat' of the cabinet industry is very fat and want to eat a bite, so they all invest to join the cabinet industry. People in the industry are thinking about changing careers, but they want to wait for opportunities. This has led to more and more people coming, but those who want to leave can't walk with peace of mind. Overcrowded, natural competition has intensified, but consumer demand has not increased, causing companies to fall into the embarrassment of overcapacity and oversupply. In this situation, cabinet companies are bound to accelerate their transformation, otherwise they will only get deeper and deeper.
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