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Breakthrough Road in the recoating market of architectural coatings: follow the trend

Breakthrough Road in the recoating market of architectural coatings: follow the trend

September 27, 2016

[China paint information]

the architectural coatings industry has faced many challenges in the past two years, both from the recession on the demand side and from the industry's own adjustment

2. The main engine adopts double support columns

on the one hand, the real estate market has gone through a golden decade and began to enter the silver era. Architectural coatings, as a supporting industry in the real estate market, is also difficult to survive alone, and is subject to both sales and profits

on the other hand, the coating industry is also accelerating the integration and redefining the extension of architectural coatings. Leading by Nippon coatings to realize this technology, the industry giants have strengthened the integration of extension industries such as flooring, auxiliary materials and thermal insulation, reshuffled the industry pattern and set up new competition barriers

if we talk about the future of China's architectural coatings market, many peers in the industry must think of the recoating market. In the next few articles, the author will discuss with you my views on the recoating market of architectural coatings

only by following the trend can we take advantage of the wind. The author will start with "one: follow the trend". Before discussing the main topic, let's make a simple definition. The repainting market mentioned in this paper is mainly for the civil construction field, excluding the maintenance of the industrial market and the repair and repainting of the professional market. According to the author's experience, the recoating market of architectural coatings can generally be divided into retail recoating and engineering recoating according to the channel division. This division method is consistent with the channel division of many mainstream architectural coating enterprises, such as nippon, Dulux, and sankeshu

following the trend, the repainting market is an inevitable product of the development of the construction market to a certain stage.

China has implemented the dual track system reform of housing supply main body since 2003 to encourage real estate investment and market-oriented development. The market-oriented real estate development enterprises have led the process of China's real estate marketization and promoted the super intensive development of China's housing construction market for more than ten years. In 2013, the completed housing area of real estate development enterprises exceeded a record 1billion square meters, pushing the madness of China's real estate marketization to a new climax. It can be said that the popularity of the marketization of architectural coatings in the past mainly came from the golden decade of the marketization of real estate. As for the correlation between the building coating market and the real estate market, the author described it in the Sina blog "2011 review of China's building coating industry"

now that the high tide is at hand, we should prepare for the ebb tide. The state's macro-control policies and high housing inventory have made the winter theory of real estate marketization a reality

it is difficult for the architectural coating market to be independent. According to the author's research and judgment, the organic growth of the building coating market has reached a peak around 2013, but the building coating market found a new growth power before the recession, delaying the recession curve of the building coating market. (regarding the driving force of the building coating market, the author will launch it in another blog post. Please pay attention.) let's take a look at the completion area, the most direct factor affecting the building coating market. According to the statistical announcement of 2015, the completed area of real estate enterprises in 2015 was 1billion square meters, a year-on-year decrease of 6.9%, which will be the first year that the completed area of real estate has decreased in recent decades. In the next few years, this situation is still not optimistic. Another leading indicator is that the new construction area will comply with the development needs of the domestic automobile industry. The new construction area dropped sharply from 2billion square meters at the peak in 2013 to 1.54 billion square meters in 2015. At the same time, the completion rate of the construction area has been showing a monotonous downward trend, and the extension of the project turnover cycle has also amplified the market risk

the market naturally has a balance between yin and Yang, with one ebbing and the other ebbing. The essence lies in following the trend rather than going upstream. Since the growth factors of the architectural coating market driven by real estate development enterprises are decreasing, new growth drivers will be brewed based on the stock market. The over ten years of intensive market development have accumulated a large amount of stock area. It is estimated that the completed area of real estate development investment since this century has reached nearly 10billion square meters, and the stock of housing area in the whole society is conservatively estimated at more than 20billion square meters. If it is simply calculated according to the ten-year repainting cycle, the completed area since the beginning of this century has gradually entered the demand release period of repainting (secondary decoration)

at the same time, the Chinese government is also increasing the reform of the commercialized housing market. In recent years, the restrictive policies of second - and third tier cities have been abolished one after another. The tax reform of housing transactions is also under way to encourage the trading behavior of housing as a commodity attribute. We have clearly felt the popularity of the second-hand housing market in the first tier cities, and this trend will spread to the second and third tier cities in the future. The second-hand housing transaction market not only brings the popularity of the decoration market, but also brings diversified options to the decoration market. This diversified choice has also become the initial growth soil for the retail repainting business market to some extent

the repainting market relies on business model innovation or more specific transaction scenario Innovation. The demand for second-hand house renovation and repainting provides the possibility for architectural coating enterprises to integrate the value chain as the upper leader of the value chain, making the coating enterprises closer to customers. At the same time, this market development also makes our coating peers have to think about a topic that they have been afraid to express. As a commodity, what are the important technical parameters of architectural coatings? Durable goods or FMCG? Is it rational choice or emotional impulse

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