Lixil CEO: Home furnishing sector poised for boom

The introduction of measures in the property market to further improve the living conditions of the Chinese will in turn create more long-term benefits for the home furnishing industry, Tao Jiang, CEO of Lixil Water Technology Greater China, told China Daily during the China International Import Expo.

Public information shows that 352 regulations were introduced in the first seven months of this year to rein in the housing segment's potential for uncontrolled growth.

These regulations, which have since resulted in a moderate contraction of the transaction volume in China's residential sector and slowed down the sales of new residential housing, will eventually drive the sustained development of downstream industries such as home furnishing, explained Tao.

She noted that the demand for household consumption will likely grow as more living spaces will be provided during the 14th Five-Year Plan (2021-25) period to improve the lives of Chinese citizens.

Furthermore, decorated commercial housing has been more widely promoted in first and second-tier Chinese cities. The demand for secondhand housing has also increased steadily. Consumers will thus pay more attention to the quality of their living spaces and be more inclined to choose comprehensive furnishing and customized services, according to Tao.

Changes in the macro-environment and the sophistication of consumers have compelled Lixil to transform itself from a traditional product supplier to a solution provider that integrates products and services.

In late March, the company launched a new service in 10 Chinese cities including Shanghai, Beijing, Guangzhou and Suzhou that guarantees the completion of toilet renovations within 24 hours. Customers are also able to see what their renovated toilets would look like through an application powered by virtual technology.

In late May, Lixil launched an experience center in Shanghai that features all its brands including Grohe, American Standard and Inax. The aim of the center is to provide online and offline experiences to consumers.

"In the next five to 10 years, Lixil plans to completely divert its focus from sales in physical stores to providing services. Like all its dealers, Lixil will provide decoration and maintenance services to more end users. With an extensive brand portfolio, we would like to reach consumers in lower tier cities whose purchasing power will certainly increase over time," she said.