Urbanization Brings New Opportunities for Paint Industry

The Asia Pacific region remains the world’s largest paint consumer market, ranking first in 2012 with 42% of production. China accounted for more than half of the consumption in Asia, but the rapid expansion of the momentum slowed down. With both coatings costs and selling prices rising, the Chinese coatings industry began to face adversity.

The paint industry has entered the era of meager profits. The domestic paint industry is now very polarized. On the one hand, big brands have strong influence, high customer loyalty, and strong profitability. In addition, they have accumulated abundant resources and have not lost the opportunity to launch the “big sweeping” strong expansion strategy of “opening large stores and opening many stores”. On the other hand, small and medium-sized paint brands can only use their small scale, low cost features, big price wars, use of small profits but quick sales strategy, occupy a lot of share in the paint market, but these paints often face quality problems, Under the pick-and-roll of the business sector, it often does not last long.

Global Coating Prices Rise China's Coatings Industry's Adversity Seeking Breakthroughs There are also some paint companies that have walked between big brands and no-name brands. Now that they have a difficult position, they do not have the influence of big brands, and the reasons for scale and cost, as well as quality The request also made it impossible for them to fight a low price war.

Under the current situation of the international coating industry, profitability is now generally weaker for both big brands and motley brands. With the ever-increasing market competition and the pressure of rising raw material prices, the paint industry's current market environment is getting tighter. Industry sources told reporters that the current coating market "entering - leaving" rate remained high, different brands "in and out" continue, in the market pressure can not guarantee the volume of the market can not stick to the brand eventually choose to leave, at the same time, new The brand's dealers have entered the paint market against the flow of water.

According to the Xiaozheng Building Materials Group, paint production costs mainly include plant rents, workers' wages, and raw materials. Dealers' cost pressures are mostly due to mall rental, sales staff salaries, and operating expenses. As long as there is a link cost increase, it will Cause the increase of channel costs. And nowadays, the market conditions are that the cost is calculated as an additive value, so the price of paint will continue to rise. However, the way to absorb costs by increasing prices is obviously not acceptable to consumers, so the market will shrink more and more, and profits will become increasingly weak.

Urbanization brings new opportunities The rapid development of the global construction industry is one of the key factors in the growth of the coatings market, and new environmental protection coatings for new urban buildings will also become a new trend of development.

In recent years, the market share of waterborne and industrial coatings in the paint market has been maintained at more than 65%. However, due to the impact of energy crisis in some countries, the prices of chemical materials and other raw materials have continued to rise, affecting the output of paint companies. Some companies began to look for new alternative raw materials. With the thinning of profits and lower market share, a single product structure has been unable to meet market demand. Under the new circumstances, paint companies need to adjust their product mix, implement multi-category operations, and increase profitability.

With the improvement of people's living standards, green consumption has become a mainstream consumer concept, and paint companies can only win more consumers by making efforts in the environmental performance of their products. "Green" and "low carbon" are the key words in the research and development of coatings companies.

In recent years, the impact of the construction industry on China’s national economy has been increasing. Although the state has introduced a series of restrictions on purchases and loans, the real estate development rate has not slowed down at the same time. At the same time, the construction of a large number of affordable housing will also bring new growth points to the paint industry. In 2012, the total number of affordable housing projects completed in China was 4 million units, and this number will increase year by year. There is no doubt that in addition to traditional real estate companies, the construction of affordable housing will drive rigid demand for the entire paint market. growth of.

In addition, the accelerating policy of urbanization put forward by *** provides a new opportunity for the paint industry. The acceleration of urbanization will inevitably lead to an increase in the use of paint. A paint company official told reporters that the next few years is the development opportunity of the domestic paint market. "The existence of rigid demand and the construction of domestic urbanization will bring great market opportunities to the paint industry. How to handle it depends on the merits."

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