2010 Inventory of Sanitary Ceramics Industry

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  The sanitary ceramics industry in China has gone through a whirlwind of ups and downs. Sales performances of sanitary ceramics enterprises have gone towards two different worlds.
  In 2010, sales performance in sanitary ceramics industry varies in the major producing areas. The high-end brands still enjoy an optimistic developing trend, while the small and medium enterprises, lack of competitiveness and brand recognition, are far from satisfaction. It has become more obvious that enterprises are taking the brand style.
  
  Expansion in Distribution Channel for Engineering Purposes
  
  In the second half of 2010, the competition in retail market is fierce. The price wars and frequent promotions in stores have become a daily phenomenon. However, in the terminal retail market, price cuts and promotions are particularly prominent, especially during the second half. In many markets, the advertising for toilet at a low price is everywhere.
  "This brand is a top one in sanitary ceramics industry, but many patterns of toilet are sold less than 500 yuan ( 75US $ ). How do the common brands respond to that? "A sales manager in charge of the sale operations in Southwest China frankly said. In the second half, there are frequent low-price promotions in high intensity. The products of these enterprises seize the market with low prices, particularly imposing the impact on small and medium brands whose sales are plummeting. The main reason is that these products, with incomplete product line and limited support from manufacturers for dealers, have no brand advantage and are not able to compete with those who have a certain brand influence. Second, the distribution channels of small and medium enterprises are simple. Once the retail markets get affected, they are not able to improve the sales in any other channel, which results significantly sales decrease. The top brands and enterprises with tremendous strength usually make up their loss in retail market by sales in other channels.
  "The market demand is always the same, but consumers spend in different ways, which will change the way of selling." Wang, sales manager in a sanitary enterprise in Foshan told the reporter his understanding of the fierce competition in retail market in the second half year. Due to such changes in the market, the sales for engineering purposes grow rapidly this year in Wang’s enterprise. According to Wang’s analysis, in 2011, the sales for engineering purpose are very probable to continue its growth. In metropolitans, many real estate developers have introduced hardcover apartments. This developing trend is expanding to smaller cities. Hardcover apartments have always been the main consumers of sanitary ceramics in distribution channel for engineering purpose.
  
  Foreign Brands: Expanding Distribution Channel VS. Domestic Brands: Squeezed
  
  A sales manager in charge of Shenzhen market told reporter, “In 2010, foreign brands suppressed domestic brands in a powerful way. They pressed their price very low, and with extensive product line, they have products for taking market share, products for making profits and those for representing the brand image. Domestic enterprises do not have such market strategy and product line, just competing by price war. This is detrimental to the entire industry.” In metropolitan market, foreign brands have had strong advantages. Along with their optimization on distribution channel, they have improved the cost for domestic brands to enter these channels and intensified competition.
  Foreign brands have also expanded to markets in smaller cities. In 2010, Kohler carried out an activity, in which a car pulling the latest products for exposition in smaller cities. They would like to show consumers their latest style and expend the their brand influence to these smaller markets. Industry personage analyzed that there is no major difference in quality between foreign and domestic brands. Even a large part of products in foreign brands are “Made in China”, but in marketing details and brand influence, there still exists a quite wide gap, which is reflected by various prices.
  
  Foshan: Steady Sales Growth of Top Brands
  
  Since 2010, April, the government has adjusted the policies on property to suppress prices, which has a large influence on architectural ceramic market. What is the influence for sanitary ceramics enterprises in Foshan? The reporter has investigated some famous brands in Foshan such as Hegii, Faenza, CRW Shower Equipment, ABM, Eago, Gold, Aosman, etc. and Foshan Shagang Ceramics Wholesale Market, Casa Ceramics & Sanitarywares Mall and other sanitary ceramics enterprises. It is known that sanitary ceramics enterprises in Foshan have a better sales performance in 2010 than last year, and most top brands keep a steady growth in sales.
  Tan Dexian, marketing manager in Gold Sanitary Ware Co., Ltd. said, "For those enterprises which have laid a solid foundation, the sales performance is certainly not bad. The suppression of property industry is sure to impose a certain influence on sanitary ceramics industry, but it is only short-term. Whatever changes in real estate policies, the mass are still in need of sanitary ceramics products. Generally speaking, in 2010, the sales performance in Foshan is quite satisfactory." It is known that the sales of Aosman in the first quarter of 2010 has improved 43%, compared to that in last year and now it is still keeping a sales growth by 40-50 %. Liu Jianhao, marketing director in Guangdong Hegii Sanitary Wares Limited Corporation expressed that in 2010 Hegii has kept a steady growth developing trend. Actually, there is still a large development room for sanitary ceramics in domestic market in China. In 2010, the sales performance in Foshan is generally quite good.
  
  Fujian: Substantial Growth of Top Brands
  
  Due the influence of real estate, raw materials and other factors in 2010, sanitary ceramics market in Fujian has confronted with apparent fluctuations. However, sanitary ceramic enterprises in Nan’an, Xiamen, Zhangzhou and Quanzhou in Fujian province have kept growth in different degrees. Some brands even improve by 150%, with a top growth in the whole country.
  In Xiamen, the sanitary enterprises keep a growth of 40% on average, focusing on overseas markets, where exports takes up to 70%. Hawson (Fujian) Sanitary Ware Co., Ltd. which lies in development zone in Quanzhou city, used to be export-oriented, have began to develop domestic market since 2010. Due to the excellent quality of their products, the sales keep growing and the international market also gets expanded. The sanitary manufacture zone in Nan’an city, by improvement of industrial chain, its brand impact in regions have developed obviously, especially for the 4 top brands.
  In 2010, several top brands keep a steady sales growth, especially the rising star-HHHS, whose growth is more than 150% and domestic market share get rapid increase. Its brand impact also get prompt improvement. Joyou, based on its brand impact, has improved its sales in domestic market by 100%, being top within the industry. Sunlot Sanitary Wares readjust their product structure, multiply product line and keep developing new products. That has improved their cometitiveness in the market and helps them keep a large sales growth. Huihuang Plumbing Group and Jomoo have more impact in the market, with a quietly rapid sales growth compared with last year.
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