The peak season is here! These home products will be hot sellers

In March, home furnishings such as garden tools, outdoor furniture, home textiles and home decorations ushered in the peak sales season. Taking outdoor furniture as an example, the demand for this category has always been high in Europe and the United States. March to July is the peak period for outdoor furniture searches on Amazon US.

Home products have long been a popular category. Amazon data shows that online sales of home products will grow by 31.1% in 2022 and are expected to grow by 37.4% in 2024. Home sellers are facing a good sales opportunity. At the same time, e-commerce platforms provide guidance on high-potential home products, so sellers can make targeted layouts.

The overseas expansion of home furnishing products is broad, including multiple subcategories such as garden tools, outdoor home furnishings, indoor furniture, home textiles and home furnishings, and storage. More and more home furnishing companies are starting to expand overseas and focus on cross-border e-commerce business. Competition in the industry continues to heat up.

Home demand is rising, and high-potential products are coming

During the epidemic in the past few years, many home furnishing companies have experienced explosive growth. For example , in 2020, the cross-border e-commerce business of Henglin Co., Ltd., the largest exporter of office chairs in China, grew more than 60 times; from January to May 2020, when the epidemic was the most severe, the sales revenue of outdoor home furnishing brand Outer increased 21 times.

However, this highlight period also overdrawn the demand for home furnishing products. In addition, people returned to offline shopping after the epidemic, and many companies faced the problem of "destocking". In recent months, the overseas consumption situation has improved, and home furnishing sellers may enter a rising period again.

Taking home decoration as an example, Statista data shows that the global home decoration market revenue will reach a staggering $128.7 billion in 2024, with a compound annual growth rate of 5.33% from 2024 to 2028. Among them, the US market has the highest revenue, which will reach $33.39 billion this year.

With the arrival of spring, the European and American markets have entered the peak season for home furnishing sales in March, and overseas consumers have begun to take care of their gardens and replace their home furnishings. Recently, eBay has taken stock of high-potential products in major home furnishing categories, which will also be the focus of the layout of sellers in this category this year.

After the weather warms up, people start to repair their gardens first. Rakes, small shovels, and watering cans have become hot-selling items. Outdoor power tools have become an important product selection category this year. High-potential products include lawn mowers, chainsaws, high-pressure washers, grass trimmers, leaf blowers, hedge trimmers, wood splitters, tillers, crushers, and ground drills.

Spring is bright and pleasant, and as people spend more time outdoors, they will also rearrange their gardens, and the demand for outdoor furniture will rise accordingly. Garden furniture sets, awnings, pavilions, storage sheds /tool ​​rooms, terrace chairs, car roofs, fence screens, etc. are all high-potential products.

Indoors, furniture covers different scenes such as living room, dining room, bedroom, etc., with a wide variety. According to the scene, sofas and single chairs, leisure chairs, TV cabinets and entertainment centers, coffee tables, sofa tea tables, dining room sets, dining tables, dining chairs, benches, bar stools in living room furniture , mattresses, beds and bed frames, bedroom furniture sets, dressing tables and drawers, bedside tables in bedroom furniture, desks, chairs, bookcases and bookshelves in office furniture, screens and room partitions, and filing cabinets are all high-potential products at present.

Changing home decoration is an essential part of the change of seasons, and the demand for home textiles has increased significantly. Among them, area rugs, blinds and blackout curtains, curtains, pillows, blankets, quilts and sets are all high-potential products.

There are many types of home decoration and storage products, and decals and vinyl art, posters and prints, clocks, floral decorations, mirrors, candles, photo frames, home fragrances, signs, greeting cards and invitations have high potential. Shoe storage boxes, hooks and hangers, storage racks, party tableware, holiday and seasonal decorations are also key demand products.

The basis for the hot sales of potential products is that home furnishing exports have shown a growth momentum. Huatai Securities analyzed that in the short term, the demand for replenishment of overseas channels has emerged, and the year-on-year growth rate of furniture and parts exports has turned positive . The demand for wooden frame sofas, mattresses and other categories has recovered rapidly, while the demand for bathroom and other categories still needs time . The orders of home furnishing export companies have gradually recovered since the third quarter of last year . In addition , in the medium term, the United States is expected to usher in a cycle of interest rate cuts, which will be conducive to the bottom improvement of real estate sales and may drive the recovery of home consumption demand.

From the perspective of consumption trends, the general direction of omni-channel home furnishing shopping will not change in 2024, but as online products have better cost-effectiveness and online shopping consumption habits continue to deepen, the overall online sales of home furnishings will steadily increase. In terms of product materials, the global home furnishing market is surging in demand for sustainable and environmentally friendly products , and European and American markets such as Germany are leading in this regard.

Leading player Zhiou Home Furnishing believes that the European and American online markets will still be on a growth trend in 2024 , which can be specifically explained from three aspects : First, the U.S. non-store retail sales will increase from US$109.9 billion in January 2023 to US$120.5 billion in December 2023, maintaining a year-on-year growth rate of 7%-8% ; Second , the sales of offline furniture and home decoration in the United States will basically show negative growth of 4%-6% in 2023. Affected by prices and inflation, consumption scenarios will shift to online channels ; Third , Amazon's third-party seller revenue will maintain a growth rate of about 19% in a single quarter in 2023.

With the steady growth of online sales, more and more home furnishing companies are eyeing the cross-border expansion track.

Increasing cross-border e-commerce, home furnishing companies are "going overseas"

Benefiting from factors such as a complete supply chain, production process advantages, and export policy dividends, China is the world's leading home furnishing exporter. From a regional perspective, developed countries such as the United States, Japan, and Europe are the key export destinations for China's home furnishings. According to the General Administration of Customs of China, in the first half of 2023, the top four countries and regions for China's home furnishing and other products exports were the United States, the European Union, Japan, and the United Kingdom, accounting for a total of more than 50.0%. Among them, the United States is still China's largest trading partner for home furnishing exports, accounting for 25.44%.

A large number of home furnishing products are entering overseas markets through foreign trade. In recent years, the more flexible cross-border e-commerce model has gained popularity, and many home furnishing companies have begun to deploy this model, and even regard it as the focus of their business, seeking new growth outside the traditional business model. There are many players in categories such as garden tools, outdoor home furnishings, home textiles and home furnishings, and furniture, and the competition is becoming increasingly fierce.

Garden Tools

European and American homes often have courtyards, and garden tools are an evergreen category of demand. Wickers, Giant Star Technology, and Greebo are all leading companies.

In the 2023 BrandZ Top 50 Chinese Global Brands list released by Google and Kantar , Worx ranked 24th, up 21 places from 2022, and topped the home gardening category.

Wickers is a professional power tool brand under the Positec Group. Positec has a global R&D team of more than 600 people. The company integrates R&D, production and sales. Its products cover professional power tools, gardening tools, automotive products, and home DIY tools. The brand has now covered major markets in Europe, America, Australia, and Asia.

Worx has built a comprehensive sales network, including independent websites, third-party online platforms such as Amazon, large retailers, and physical stores such as home improvement chains. The independent website has received over one million visits, and one of its portable workbench products has won the Best Seller in the Amazon category. According to the latest GfK report in 2023, Worx smart lawn mower robots have ranked first in the global omni-channel market share, becoming a leader in the garden tool category.

Giant Star Technology is a leading tool company. The company owns many well-known brands including ARROW, PONY&JORGENSEN, Goldblatt, BeA, shop.vac, SK, etc. Its products cover hand tools, power tools, pneumatic fastening tools, laser measuring tools, lidar, tool cabinets, industrial storage cabinets, industrial vacuum cleaners, etc.

Among them, WORKPRO is the first comprehensive tool brand independently created by Giant Star Technology, and its products are sold well in the European and American markets. The brand has more than 4,000 different products, covering hand tools, lighting fixtures, laser measurement, power tools, garden tools, pneumatic tools, mechanical equipment, labor protection products, electric accessories and other categories, providing full-domain tool solutions for DIY consumers and professional users.

In the first half of last year, the sales revenue of brands such as WORKPRO grew rapidly year-on-year, and the sales revenue of Giant Star Technology's own brands was close to 50%, with an increase in gross profit margin . The company's sales revenue declined in the first three quarters, but the overall sales situation improved in the second half of the year. Due to the improvement in order conditions, the increase in the share of own brands, and the opportunity of the US Christmas promotion season, the company finally achieved considerable results.

In 2023, Giant Technology achieved double growth in revenue and net profit. It is expected that the net profit attributable to shareholders of the listed company in 2023 will be 1.65 billion yuan to 1.85 billion yuan, a year-on-year increase of 16.23% to 30.32%, which is the best year for profit in history.

Greebo is known as the "first A-share new energy garden machinery stock". It is mainly engaged in the research and development and production of new energy garden machinery, of which new energy garden machinery accounts for about 70% of the revenue. Its products mainly include lawn mowers, grass trimmers, smart lawn mowing robots, smart riding lawn mowers, etc. The company's customers include large supermarkets and well-known brands such as Lowe's and Walmart. In recent years, Greebo has successively established brands such as Greenworks and POWERWORKS. Greenworks is well-known in North America and Europe. The brand's lawn mowers, hair dryers and other products are always among the best sellers on the Amazon platform.

In 2021, the sales revenue of Greebo's own-brand products accounted for 56.97%, becoming the main component of the company's business revenue. In 2021, the company achieved operating income of 5 billion yuan.

Greebo's revenue grew in the three years before its listing , but its performance changed dramatically last year. According to Greebo, the company expects its operating income in 2023 to be 4.6 billion yuan to 4.7 billion yuan, a year-on-year decrease of 9.8% to 11.7%; and it expects a loss of 370 million yuan to 430 million yuan, a year-on-year decrease of 239.1% to 261.7%.

Greebo explained the reasons for the dramatic change in performance. Affected by the destocking of downstream retailers, the company's operating income decreased by 9.8%-11.7% year-on-year; secondly, due to the increase in promotional deductions and the digestion of inventory at the end of 2022, the gross profit margin in 2023 decreased year-on-year, and the combined decline in revenue affected the company's gross profit by 190 million to 210 million yuan year-on-year; the cost investment in 2023 was large, and the total sales expenses, administrative expenses, and R&D expenses increased by about 270 million to 290 million yuan year-on-year; in addition, affected by the sharp decrease in exchange gains in 2023, the company's financial expenses increased by about 130 million yuan year-on-year. The Shenzhen Stock Exchange issued a letter of concern, asking it to further explain the rationality of the decline in gross profit margin.

Home Furniture

In the home furnishing field, Zhiou Technology has a wide product line, covering most scenes of home life, from the home furnishing brand SONGMICS, the stylish furniture brand VASAGLE to the pet home furnishing brand Feandrea, and its products have entered more than 60 countries and regions in Europe, North America, Central America, Asia, etc.

Among them, VASAGLE mainly provides furniture products that combine the complex functions of modern furniture and trendy aesthetics to create a modern home living space for consumers; SONGMICS product main categories include home storage, home decoration, outdoor garden supplies, leisure and sports supplies, etc.; Feandrea brand main categories include pet rest, pet travel and pet play, as well as pet cleaning, etc.

In 2021 and 2022, Zhiou Technology's operating income exceeded 5.4 billion yuan, with a rapid growth momentum. The compound growth rate of R&D investment was 87.75%, adhering to "long-termism".

The 2023 performance forecast released by Zhiou shows that the company expects to achieve operating income of 6.02 billion yuan to 6.10 billion yuan in 2023, an increase of 10.35% to 11.82% over the same period last year; the net profit attributable to shareholders of the listed company is expected to be 400 million yuan to 420 million yuan, an increase of 59.93% to 67.92% over the same period last year; the net profit after deducting non-recurring gains and losses is 420 million yuan to 440 million yuan, an increase of 67.10% to 75.06% over the same period last year.

Last year, cross-border sellers generally complained that it was "difficult" to significantly increase profits. Zhiou explained that since the second half of 2022, shipping costs have dropped significantly, and the impact of procurement cost reduction has reduced the cost of main business; the exchange rates of the euro, the US dollar and the RMB have appreciated compared with the same period last year; the accelerated inventory turnover has saved storage fees, and the combined effect has achieved profit growth.

Previously, Zhiou focused more on the European market. In recent years, it has begun to expand its business in the United States . Due to its short development time in the US market, its business and profit conditions are not as good as those in Europe. However, considering the large overall market size of the United States, the United States is the focus of Zhiou's long-term development. In terms of products, Zhiou's product development is aimed at both the US and European markets, and it has increased its resource allocation to the United States, optimized its warehouse layout in the United States, and shortened delivery time and costs. In terms of sales, it still focuses on Amazon, pays more attention to Amazon's VC channels, and increases the layout of other platforms.

Leggett Holdings is another home furnishing giant. In comparison, its product line is more vertical, focusing mainly on smart homes. Its main products include smart lifting tables, smart electric beds, smart study tables, smart lifting platforms, fitness chairs, etc.

In 2023, Lechuang expects the net profit attributable to shareholders of the listed company to be between RMB 610 million and RMB 650 million, an increase of 178.88% to 197.17% over the same period last year. The net profit after deducting non-recurring gains and losses is expected to be between RMB 230 million and RMB 250 million, an increase of 121.26% to 140.50% over the same period last year.

Leckey's profit has grown rapidly thanks to the dual-wheel drive of smart home and overseas warehouse business.

In the home furnishing sector, the self-owned brand business maintained growth, benefiting from the increased market penetration of height-adjustable tables and the long-term accumulation of self-owned brands, and the brand dividend was evident; in the overseas warehouse business, with the continuous increase in the penetration rate of US e-commerce and the continuous strengthening of the trend of Chinese cross-border e-commerce brands going overseas, the demand for overseas warehouses increased significantly, resulting in high growth in the overseas warehouse business. In addition, low shipping costs and exchange rate factors are also conducive to profit growth.

Henglin Home Furnishing is another big player in the furniture industry. The company integrates research, production and sales, focusing on healthy seating and civilian furniture products such as office chairs, sofas, massage chairs, etc. As one of the largest office chair manufacturers and exporters in China, Henglin Home Furnishing has been the top exporter in the office chair industry for 13 consecutive years, with annual sales of approximately 6.5 billion yuan.

In the first half of last year, Henglin Home Furnishing achieved operating income of 3.643 billion yuan, a year-on-year increase of 23.41%, and realized a net profit of 262 million yuan attributable to the parent company, a year-on-year increase of 23.57%; non-net profit increased by 11.05% year-on-year, and the performance continued to grow at a high rate. Among them, overseas business income reached 2.847 billion yuan, a year-on-year increase of 26.04%, and the scale of overseas expansion has been expanding year by year.

Home Textiles and Home Decor

Home textile is one of China's advantageous export industries, with many exporting companies. Recently, both Jessica and Mingyuan Creative have announced the launch of IPO coaching, entering the "reserve team" of home textile listed companies.

Jessia focuses on the manufacturing of home textile products and home furnishings, and then transforms into a cross-border Internet home furnishing company, while still retaining traditional trade business. The company owns several self-owned brands such as Fourteen Carats and Hulala Tranquility Home, and has covered many well-known North American e-commerce platforms such as Wayfair, Amazon, Homedepot, Overstock, etc., and has now become the top 3 seller on the Wayfair platform. In 2023, the company's sales will exceed US$100 million.

Last November, Jessica signed a listing guidance agreement with CICC to start the A-share IPO process.

Another textile company, Mingyuan Creative, has also entered the IPO counseling stage. Founded in February 2008, Mingyuan Creative is a supplier of fashionable home textiles that integrates R&D, design, production and sales. The company has created multiple brands including PHF, David's home, David's kids, Davis, Youmian Yaju, Yilantu, Bosifeike, Zaobuji, etc. Its products are positioned in the mid-to-high-end market, and its pure cotton bedding exports have ranked first in the country for many years.

In 2022, Mingyuan Creative's sales were nearly 1.2 billion yuan. In the first half of 2023, it achieved operating income of 611 million yuan, a year-on-year increase of 15.38%, and net profit of 40.9809 million yuan, a year-on-year increase of 69.85%. In November last year, Mingyuan Creative's IPO listing guidance filing materials on the Beijing Stock Exchange were accepted by the Shandong Securities Regulatory Bureau, and the company officially entered the guidance stage.

Meizhigao is an expert in home storage . The company focuses on DIY space storage racks and provides services for industrial, commercial and home customers. It has gradually formed a series of storage products for space scenes such as kitchens, living rooms, bedrooms, balconies, study rooms, entrance spaces, bathrooms and single apartments.

In 2021, Meizhigao was listed on the Beijing Stock Exchange. Last year, Meizhigao achieved operating income of 425 million yuan, a year-on-year decrease of 15.61%; net profit attributable to shareholders of listed companies was 19.6911 million yuan, a year-on-year decrease of 24.21%. Foreign trade is still the focus of the company, but its business structure is gradually changing.

Meizhigao said that the current overseas business is mainly to expand product categories on the basis of stabilizing the sales scale of existing major overseas customers, providing storage products made of various materials such as rattan, wood, and plastic to increase business stickiness, and also actively expand new foreign customers and cross-border e-commerce business. The company has established an overseas online independent brand team and set up a self-operated store on Amazon. In the future, it will focus on the online market with platforms such as Amazon, eBay , and Pinduoduo Overseas T emu. In 2024, the company will vigorously develop cross-border e-commerce and open up new growth points for foreign trade . This is the development path of many foreign trade home furnishing companies.

However, with the increasing number of home furnishing companies going overseas, the industry competition is becoming increasingly fierce. Zhiou mentioned that Chinese sellers on mainstream sites such as the United States are estimated to be around 50%-60%, especially this year, the involvement of similar platforms such as China's Temu has exacerbated the uncertainty of the industry's competitive landscape. But in the final analysis, the advantages of top sellers will become more and more obvious.