China Bathroom Study 2014

China Bathroom Study 2014 A Multi-Client Study By Chris Chu

China Bathroom Study A Multi - Client study Contract: 6614003 Date: October 2014 Issued by: BSRIA Limited Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH, UK Telephone: +44 (0)1344 465600 Fax: +44 (0)1344 465626 E: bsria@bsria.co.uk; W: www.bsria.co.uk Compiled by: Name: Chris Chu Approved by: Name: Angela Yu This report must not be reproduced except in full without the written approval of an executive director of BSRIA. It is only intended to be used within the context described in the text. BSRIA Page 3 of 58 Report 6612001

EXECUTIVE SUMMARY The bathroom industry was facing a problem of oversupply in 2013. Affecting by the restriction policies of real estate market and rising raw material price, parts of small and medium sized enterprises with poor management level or lack of technical innovation reduced their production or even shut down, in additional, the updated National standards also become an insurmountable obstacle for a lot of small enterprises, but for other powerful brands, this is a good opportunity for expanding business and merger and acquisition. The reshuffle of bathroom industry is accelerating. Although the growth of bathroom industry was not very stable in past few years due to the fluctuation of the real estate market, China s urbanization process has been going gradually and China s economy has entered a new period of stable growing, these factors would definitely provide great supports for bathroom industry in a long term. The 2013 total market size for all bathroom products included in this report was RMB 66,185 million at 11.6% YOY growth, which covered taps and mixers, sanitary wares, shower enclosures, bathtubs and bathroom cabinets. After a downturn of bathroom industry in 2012, the market rebounded in 2013. In the first half of 2014, the sales of real estate market fell sharply compared to the same period of 2013. The bathroom industry was affected by the decline of real estate accordingly, thus most key manufacturers had lowered their growth target for 2014, and some manufacturers who lack of management and innovation ability, even began to shrink. The YOY growth of bathroom industry in 2014 was expected to be at around 5%. Generally, in the low end market, price was still the most important factor when consumers choosing products. In the mid end market, there was a trend that consumers tended to buy a bathroom solution which meant they preferred to buy products in package. But in the high end and premium market, consumers preferred to choose products individually, namely they preferred to buy their favorite brand from each product category. With the improvement of people s living standard, the proportion of middle-income population increased year by year. Bathroom products were also on the process of shifting from the low end to the mid-high end. Some powerful domestic brands were very keen on entering into the mid-high market, while many foreign brands had been expanding in mid end market as well. So the competition is expected to be much more fierce than before. The world economy was on the process of recovery from the financial crisis. As China s important export destinations, the United States, Europe, Japan all recovered more or less. Therefore, China s export value of bathroom products continued to grow. Foreign brands concentrate in tier 1 and tier 2 cities where the market has already been saturated. Many key players are entering into the market in tier 3 and tier 4 cities where occupied by lots of unknown brands. BSRIA Page 4 of 58 Report 6611002

TABLE OF 1 INTRODUCTION... 8 1.1 BACKGROUND... 8 1.2 MAJOR PRODUCT GROUPS COVERED... 8 1.3 METHODOLOGY... 8 2 MARKET BACKGROUND... 9 2.1 CHINA S GENERAL ECONOMY... 9 2.2 POPULATION...10 2.3 CONSTRUCTION...10 2.4 ENERGY CONSERVATION...14 2.5 SITUATION OF CHINESE BATHROOM INDUSTRY...14 3 MARKET SIZE... 15 3.1 OVERVIEW...15 3.2 MARKET SIZE OF TAP AND MIXER...16 3.3 MARKET SIZE OF SANITARY WARE...17 3.4 MARKET SIZE OF SHOWER ENCLOSURE, BATHTUB AND BATHROOM CABINET.18 4 MARKET SEGMENTATION... 20 4.1 SEGMENTATION OF TAP AND MIXER...20 4.1.1 Bathing tap by type... 20 4.2 SEGMENTATION OF SANITARY WARE...21 4.2.1 Basin by type... 21 4.2.2 WC by type... 21 4.2.3 WC & urinal by flushing type... 22 4.2.4 WC by water quantity... 23 4.3 SEGMENTATION OF SHOWER ENCLOSURE...24 4.3.1 Shower enclosure by door s type... 24 4.3.2 Shower enclosure by shape... 25 4.4 SEGMENTATION OF BATHTUB...25 4.4.1 Bathtub by type... 25 4.4.2 Bathtub by function... 26 4.4.3 Bathtub by material... 27 4.5 SEGMENTATION OF BATHROOM CABINET...28 4.5.1 Bathroom cabinet by material... 28 5 PRICE BAND ANALYSIS... 29 5.1 OVERVIEW...29 5.2 PRICE BAND OF BASIN TAP...29 5.3 PRICE BAND OF WC...30 6 DOMESTIC VERSUS OVERSEAS TRADE... 31 7 PRE-DECORATED DWELLING... 33 8 DISTRIBUTION... 34 8.1 FIRST POINT OF DISTRIBUTION...34 8.2 PROJECT VERSUS RETAIL...34 8.3 SALES CHANNEL...35 9 NEWLY-BUILT VERSUS REFURBISHMENT... 37 10 SALES REGION... 38 11 MARKET SIZE FORECAST... 39 11.1 MARKET SIZE FORECAST OF TAP AND MIXER...39 11.2 MARKET SIZE FORECAST OF SANITARY WARE...39 11.3 MARKET SIZE FORECAST OF SHOWER ENCLOSURE, BATHTUB, BATHROOM CABINET...40 BSRIA Page 5 of 58 Report 6612001

12 MARKET SHARE OF KEY PLAYER... 41 12.1 BATHROOM PRODUCT...41 12.2 TAP AND MIXER...42 12.3 SANITARY WARE...42 12.4 SHOWER ENCLOSURE...43 12.5 BATHTUB...44 12.6 BATHROOM CABINET...45 APPENDICES APPENDIX: A - KEY CHINESE SANITARY WARE, TAPS & MIXERS AND BATHTUB COMPANIES 47 APPENDIX: B - TYPICAL SANITARYWARE, TAP & MIXER, BATHTUB PRODUCS SOLD IN CHINA 50 TABLES Table 1 Key Products covered in the 2014 China bathroom report... 8 Table 2 China s Main Economic Indicators... 9 Table 3 Building Indicators for real estate development in 2011-2013 & 2014 H1... 10 Table 4 Buildings sold by enterprises for real estate development by region in 2013... 11 Table 5 Basic Statistics on Tap Water Supply in Cities by Region in 2012... 12 Table 6 Market size of bathroom product in value, 2013... 15 Table 7 Market size of tap & mixer in value & volume, 2013... 16 Table 8 Market size of sanitary ware in value & volume, 2013... 17 Table 9 Market size of shower enclosure, bathtub and bathroom cabinet in value & volume, 2013... 18 Table 10 Segmentation of bathing tap by type in value & volume, 2013... 20 Table 11 Segmentation of basin by type in value & volume, 2013... 21 Table 12 Segmentation of WC by type in value & volume, 2013... 22 Table 13 Segmentation of WC and urinal by flushing type in value & volume, 2013... 22 Table 14 Segmentation of cistern type WC by water quantity in value & volume, 2013... 23 Table 15 Segmentation of shower enclosure by door s type in value & volume, 2013... 24 Table 16 Segmentation of shower enclosure by shape in value & volume, 2013... 25 Table 17 Segmentation of bathtub by type in value & volume, 2013... 26 Table 18 Segmentation of bathtub by function in value & volume, 2013... 26 Table 19 Segmentation of bathtub by material in value & volume, 2013... 27 Table 20 Segmentation of bathroom cabinet by material in value & volume, 2013... 28 Table 21 Retail price segmentation of basin tap in volume, 2013... 29 Table 22 Retail price segmentation of WC in volume, 2013... 30 Table 23 Imports, Exports of taps and mixers, sanitary ware, bathtub in value, 2013... 31 Table 24 Imports, Exports of tap and mixer in volume, 2013... 31 Table 25 Imports, Exports of sanitary ware and bathtub in weight, 2013... 32 Table 26 First Point of Distribution of bathroom product in value, 2013... 34 Table 27 Project and retail sales of bathroom products in value, 2013... 35 Table 28 Sales channel of bathroom product in value, 2013... 36 Table 29 Newly-built versus refurbishment of bathroom product in value, 2013... 37 Table 30 Sales regions of bathroom product in value, 2013... 38 Table 31 Market forecast of tap and mixer in value, 2014-2018... 39 Table 32 Market forecast of sanitary ware in value, 2014-2018... 39 Table 33 Market forecast of shower enclosure, bathtub, bathroom cabinet in value, 2014-2018... 40 Table 34 Market share of key player in bathroom product market in value, 2013... 41 Table 35 Market share of key player in tap and mixer market in value, 2013... 42 Table 36 Market share of key player in sanitary ware market in value, 2013... 42 Table 37 Market share of key player in shower enclosure market in value, 2013... 43 Table 38 Market share of key players in bathtub market in value, 2013... 44 Table 39 Market share of key player in bathroom cabinet market in value, 2013... 45 BSRIA Page 6 of 58 Report 6611002

FIGURES Figure 1 Map of China... 9 Figure 2 Market share of bathroom product in value, 2013... 15 Figure 3 Market share of tap & mixer in value & volume, 2013... 16 Figure 4 Market share of sanitary ware in value & volume, 2013... 17 Figure 5 Market size of shower enclosure, bathtub and bathroom cabinet in value & volume, 2013... 18 Figure 6 Segmentation of bathing tap by type in value & volume, 2013... 20 Figure 7 Segmentation of basin by type in value & volume, 2013... 21 Figure 8 Segmentation of WC by type in value & volume, 2013... 22 Figure 9 Segmentation of WC and urinal by flushing type in value & volume, 2013... 23 Figure 10 Segmentation of cistern type WC by water quantity in value & volume, 2013... 23 Figure 11 Segmentation of shower enclosure by door s type in value & volume, 2013... 24 Figure 12 Segmentation of shower enclosure by shape in value & volume, 2013... 25 Figure 13 Segmentation of bathtub by type in value & volume, 2013... 26 Figure 14 Segmentation of bathtub by function in value & volume, 2013... 26 Figure 15 Segmentation of bathtub by material in value & volume, 2013... 27 Figure 16 Segmentation of bathtub by material in value & volume, 2013... 28 Figure 17 Retail price segmentation of basin tap in volume, 2013... 29 Figure 18 Retail price segmentation of WC in volume, 2013... 30 Figure 19 Imports, Exports of taps and mixers, sanitary ware, bathtub in value, 2013... 31 Figure 20 Imports, Exports of tap and mixer in volume, 2013... 31 Figure 21 Imports, Exports of sanitary ware and bathtub in weight, 2013... 32 Figure 22 First Point of Distribution of bathroom product in value, 2013... 34 Figure 23 Project and retail sales of bathroom product in value, 2013... 35 Figure 24 Sales channel of bathroom product in value, 2013... 36 Figure 25 Newly-built versus refurbishment of bathroom product in value, 2013... 37 Figure 26 Sales regions of bathroom product in value, 2013... 38 Figure 27 Market forecast of tap and mixer in value, 2014-2018... 39 Figure 28 Market forecast of sanitary ware in value, 2014-2018... 39 Figure 29 Market forecasts of shower enclosure, bathtub, bathroom cabinet in value, 2014-2018... 40 Figure 30 Market share of key player in bathroom product market in value, 2013... 41 Figure 31 Market share of key player in tap and mixer market in value, 2013... 42 Figure 32 Market share of key player in sanitary ware market in value, 2013... 43 Figure 33 Market share of key player in shower enclosure market in value, 2013... 44 Figure 34 Market share of key player in bathtub market in value, 2013... 45 Figure 35 Market share of key player in bathroom cabinet market in value, 2013... 45 BSRIA Page 7 of 58 Report 6612001