Boston, MA -- (SBWIRE) -- 08/12/2014 -- Despite the ongoing introduction of tighter policies with regard to real estate, which restricted demand for speculations within the industry, residential houses maintained double-digit growth in 2013. According to the National Bureau of Statistics of China (NBSC), total sales of residential real estate achieved 18% growth in sq m in 2013, which in turn also bolstered sales of home improvement. In addition, trading up demand among consumers, especially in floor tiles to more expensive wooden flooring, also contributed to the buoyant growth in home improvement in 2013.

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Competitive Landscape:

Hangzhou Nabel Group was the strongest player in this category with sales of CNY7 billion in 2013. Competing in the leading categories, such as floor covering and wall covering, the company established an extensive distribution network in China, which covered 58 franchised sub-companies and more than 500 specialist outlets at the end of 2013. Moreover, its sponsorship of local football team, Hangzhou Greentown Football Club, as well as its first move advantage in exploiting the internet as a retailing channel, also contributed to its growing brand awareness. This helped it achieve a 25% growth rate in 2013 while simultaneously strengthened its leading position.

Industry Prospects:

Growing demand for more sophisticated decorated homes is expected to be the most significant negative influence on the category during the forecast period. Faster-paced lifestyles, as well as high energy demand and costs, will need to be considered when developing and buying home improvement products. Moreover, a focus on service prices will drive demand for more sophisticated home decoration, which is also more convenient and time-saving. As a result, players in this category will also gradually look forward to cooperating with real estate developers. For example, Vanke, the leading player in real estate, established a strategic cooperation with players, such as Nippon, Dulux, Power Dekor and Simons, in home improvement, in order to launch a variety of more refined decorated homes and cater to this new demand from consumers. As a result, the total retail sales of this category will be negatively affected, leading to lower growth over the forecast period than was seen over the previous five years.