Chinese tile industry analysis
2008-08-13

                                                                                                                                                                                   Tile information                                                                                                                                                         Chapter twelve- Chinese tile industry analysis

Tiles are decorative materials that leading the fashion trend. In recent years, with the real estate market development, Chinese tile’s production and consumption have been increased by big margins. Chinese tile not only has various patterns, large quantities and full varieties, but also the price is affordable. Many of the world's countries and regions favor Chinese products, the export volume is also growing. With infrastructure rehabilitation and construction of residential housing, domestic demand has been increasing. But the road of this industry is not always flat. The first half of 2008 data shows that the CPI climbed all the way, various prices continued to rise, the appreciation of the RMB, tile industry has greater pressure. Which direction will the Chinese tile industry take, what measures need to be taken, are the focuses of these issues. 

Industry conditions in Detail Production condition In the first quarter of 2008, the output of tiles was 1.03 billion square meters, an increase of 10 percent. Compare to the same period last year, the growth rate dropped 10 percentage points. In the main producing areas of tiles, with the exception of tiles production down in Shandong, Fujian and Sichuan tile production grew faster, compared with the same period last year, up 15.3 percent and 12.2 percent. In the first quarter, export volume of Chinese tiles rose 19.5 percent, exports grew by 36.3 percent. Although the tile industry has many brands, but market concentration is very low, any brand’s market share is not over 5%, reflecting the low level marketing as a whole. Enterprises generally lack economies of scale, lack leading brands and enterprises to lead the market.

Consumption condition Tiles are consumer durable goods which closely associating with the property, so it will show a very typical fixed characteristics when consuming. In other words, once a general consumer interest formed, if not a last resort, is often not easily replaced. In the factors affecting the purchase, price and pattern are the first elements; secondly, the evaluation from other people is also a certain effect. China's consumption structure of the tiles have been a pyramid-shaped: the proportion of mid-range is 30 to 40 percent, low-end market share is more than half, and the high-end market accounts for about 10 percent. However, with the increase in consumers’ income and taste, the expansion of high-end market trend has become increasingly apparent, especially in some of the frontline cities, its high-end market has reached more than 20 percent. In future, there will be more high-end consumption. While import brands known for luxury and elegant, and this cater to consumers’ mentalities. Domestic brands for tiles want to occupy the initiative, they must pay more thought in quality and style. 

The pressure from import tiles In the first quarter of 2008, China's imports of glazing ceramic paste brick, pavement bricks, mosaics and similar products are to the amount of 129765.00 m2 / kg, with the 4264019.00 U.S. dollars. Import brands’ biggest advantages are design and process handling, each pattern almost comes from brand-name designer’s hand. These personally designed by the designer of tiles, when the extravagant and elegant appearance demonstrated in front of consumers, bring the top foreign fashion of tiles. To Italy as an example, the Italian tile culture goes back to ancient time, in a modern home in Italy, the use of tiles have gone beyond the protection of their traditional role, more focused on the effectiveness of decoration. Italy's tile designers to create artistic vision to the tiles are breathtaking. These import tiles cause pressure on the China-made tiles. They have exquisite design and high processing techniques, satisfy the tastes of the pursuit of individual consumer confidence. Their brands have a long history and rich cultural connotations.

The pressure from the Environment With the rising prices of raw materials, tile industry has to face the pressure of price hike, when they can not afford this kind of pressure they must transfer to the consumers, which will make the whole industry face recession. Mainstream environment requires tiles meeting environmental protection standards so that the tile industry encounters turbulence. AQSIQ data shows that large and medium-sized enterprises’ sample pass rate was 100 per cent, small business products pass rate was 72.5 percent. There are many problems in product quality, individual products with excessive radionuclide will damage human health. The quality problems of tile products have aroused extensive attention from all sectors of society with a high degree of vigilance. As the voice of the environmental high, the tile industry must improve. Looking back on the first half of 2008, hope that the tile industry in the future has rapid development. When enterprises targeting high-end market, stressing that adjust the product structure and increasing the value-added products, not only consider their own interests, should take into account the overall interests of industry. To strive to raise the technological content of products, increase independent innovation, and cultivate independent brands and other measures, the industry can achieve sustainable development.