Timber Industry in China
Market Size
According
to the Deeply Research and Development Analysis Report for the Chinese
Anticorrosive Timber Industry in 2014 – 2018, supposed by CIRN, the consumption
in China has already been up to 500 million cubic meters, with almost 40%
imported. By 2020, the demand of timber in China will amount to 800 million
cubic meters, and the external dependence will increase to 50% more or less.
Consumer Behavior
In the modern
market economic condition, in order to establish and develop long-term exchange
relationship with customers, the enterprises must pay attention to the consumer
behavior, therefore, not only to have knowledge about how consumers access to
products and services, but also need to understand how consumers consume and
deal with the products.
The main body of Chinese consumers
Under the
influence of globalization and consumerism culture, a new consumer culture is
formed in China. The middle class, whose income between 60,000 Yuan and 500,000
Yuan annually, become the main body in the development and guidance of the new
consumer culture. And by 2013, the population of the middle class has reached
to 1.197 million, almost 60% of which are between 30 years old and 50 years
old.
The globalization and localization of global consumption
trend of Chinese consumer behavior
Ø
Global
consumption trend
1.
Pursue
consumption convenience: one-stop shopping, fine decoration property
2.
Pay
more attention to the value-oriented rational consumption: both quality and
value count
3.
Pay
more attention to themselves, seeking both physical and mental health and
satisfaction: environmentally friendly consumption
Ø
Chinese
characteristic consumer behavior
1. Relative to amount of consumers with large target market
2.
Not sensitive to the price as restriction of the income is low
3.
Separation
of buyers and users, pay more attention to the package than the practical usage
4.
Holiday
consumption
5.
The
consumption trend of follow suit due to the doctrine of the mean
Electronic business in the timber industry
In the timber
industry, the consumers access to products and services mostly by the
electronic business, especially the public websites, such as the www.wood-china.com. Otherwise, the enterprise also should
be aware of consumers purchase decisions, to know well about the roles of each
participantplays in the decision-making processes.
Ø
The initiator: first thought or proposal to buy a
product or service
Ø
The influencer: whose views or opinions have directly or
indirectly impact on the final decision.
Ø
The decision maker: to be able to buy the product or
service, and partly or finally decide what to buy, how much to buy, when to buy
and where to buy.
Ø
The buyer: The actual purchase.
Ø
The user: Direct consumption; use the purchased products or
services.
Competitor Analysis - SWOT Analysis
Strength
1.
Along with the
increasing regional tariff, the customs clearance costs have risen sharply.
Part of
the timber cannot be exported in the form of logs,the wood needs more
processing in the exported countries, which will increase the operation costs,
relative to the domestic producers. Otherwise, along with the increasing labor
costs, the wood developers will have to pay more in the procurement costs, which
will influence the price of timber and make the domestic producers have the
advantage of price.
2.
The foreign
governments continue to increase the control on the production and material
policy.
In the
foreign countries, more and more governments start to strengthen their timber
management policies, including a ban on work-in-process timber being exported.
Moreover, the future policies of timber exportation will be more rigorous and
frequent, directly affect China’s import volume, and contribute to the development
of domestic producers.
Weakness
1.
The effective
supply of China’s forests is limited.
2.
Limited by the
geographical position. E.g. Most of the tropical hardwood lumbers and the
needle logs can only rely on imports in order to meet the domestic demands.
3.
The negative
impact on Chinese market from the international market.
4. The
appreciation of the RMB, make the export situation difficult.
Opportunity
1. The
development of the real estate industry, which makes the demand of timber in
China continue to rise.
2. China’s
urbanization speeds up, which promotes the demand of timber in China and
contributes to the development of timber industry.
3. As
a result of the 18th National Congress of the Communist Party of China, the state
will continue to implement the macro-control policies, which is followed by
stabling growth, adjusting structure, and increasing efficiency.
Threat
1. Continuing
market regulation policies for the real estate industry.E.g. The Notice about
Continuing to Do a Good Job in the Real Estate Market Regulation, which has
been put forward when the Five was still in its high time, clearly stipulates
the time schedule for the control of target house price, the scope of
implementation for the restrictions and the second-hand housing taxes and fees.
It also highlighted that 20% income tax would be required when selling personal
ownership of his/her own house.
2. In
2014, as the demands in American market trend to cold, better return can be
gained in the Chinese market, thus the foreign timber flooded into China recently.
During the first quarter, the import of logs and lumber has been increased by
31.67% and 18.46% respectively. However, the fact was that the Chinese real
estate projects have been postponed, thus the demands in Chinese domestic
market didn’t catch up with the volume imported, which resulted in the huge
inventory of logs, more than doubled. As the demands of lumber in American
market was still weak, the inventory of lumber in Chinese market continued
rising up to now.
3. The
slowing demand for hardwood in Europe is going to have a negative impact on
Chinese demands for hardwood, as the exportation reduced.
4. The
world economic crisis is still working.
